P & O Ferries redundancies – where did they go wrong?

The dismissals of 800 staff members from P & O Ferries has caused an outrage and serves as a reminder of what an employer should not do when making redundancies.

The steps taken by P&O Ferries to terminate the employment of staff members by way of a three-minute pre-recorded message was shocking, not only because it shows the employer’s lack of sympathy towards their staff but also because they failed to adhere to the protections which UK employment law legislation offers to employees at risk of redundancy.

It is not known if P&O Ferries will try to rely on exemptions that apply to marine or to offshore employment.

If they are indeed bound by normal UK laws, the following steps should have been followed:

P&O Ferries should have determined where the “establishment” was. In this  case, the “establishment” would most likely have been the port at which the crew were based. They would have  had to determine how many people they would propose to dismiss.

There would be an obligation to consult with employees for a minimum of 30 days if they were looking to dismiss 20-99 employees. If the number was over 100, that period would be 45 days.

They would also have had to lodge a form with the UK Government advising them of the number of redundancies being proposed (and it is generally a criminal offence to fail to do this). The Government can then become involved to determine whether or not there is anything that they can do to change the situation, or to help those being made redundant.

The employer has to spend the consultation period having meetings to provide information to the employee representative to consult with them about redundancies and the reasons. An employee representative can be appointed or elected by the employees to represent them in such situations.

The aim is to reach an agreement about the process.

Generally in such circumstances, no dismissal should take effect before the expiry of 45 days. Please note, notice of dismissal cannot be issued until after the consultation period has concluded.

An employer must also consider whether there are any other alternatives to dismissal and attempts to reach agreement must be meaningful and genuine by the employer.

Failure to consult can result in an award of up to 90 days’ pay for each affected employee, and this type of claim would be made as a collective claim by the employee representatives. Individual employees may also raise a claim for unfair dismissal and the employer would most likely be due to pay another award to the employee.

If covered by UK law, P&O Ferries should be arranging to pay statutory redundancy payments to any employees with more than two years’ service, as well as payments in lieu of notice (given that they did not serve them with actual notice of termination).

The mistakes made by P &O should be a lesson for all employers and to be cautious when making redundancies no matter what the number. The implications of failing to follow the rules can be costly and also (perhaps more importantly here) cause reputational damage.

Contact our Employment Solicitors

If you want to discuss any of the issues raised in this Blog, Vajiha Ali from our employment law team would be happy to help and you can contact her on vah@bbmsolicitors.co.uk or speak to her on 01955 604188.