P&O risking reputation with possible illegal move

Categories: Salford Business School

Yesterday ferry company P&O announced to 800 staff it was to make them all redundant and replace them with agency workers. University of Salford HR expert, Dr Jonathan Lord assesses the decision and looks into the legal basis of the move.

Dr Lord said: “Can P&O lawfully force staff to be made redundant in this way? Employment Law states that you are part of a ‘collective redundancy’ if your employer is making more than 100 redundancies in one location they must consult for at least 45 days. Employers must also hold ‘group consultations’ if there is a collective redundancy, and support staff in finding alternative employment or proceed through a fair selection process for those at risk of redundancy.

“Therefore P&O would be expected to undergo this process before making any mass dismissals and based on media as well as social media reports on the 17th March, it’s not evident whether this has happened. P&O staff could bring a claim of unfair dismissal in the employment tribunals if this process is not followed, with the maximum compensation being the lower of £89,493 or 12 months' gross pay. If they were not paid their notice or a statutory redundancy payment, claims could also be brought for these.

“This could be extremely costly for P&O but in the long term could it be economically beneficial? The term ‘fire and rehire’ is a controversial method used by numerous businesses such as Weetabix, Tesco, British Airways, Heathrow and British Gas which involves sacking staff and then allowing them to apply for their old jobs on less favourable terms usually. Trade unions and many legal experts support a ban on the practice but ministers last year blocked a bill to do this even though 9% of workers were affected by such a scheme in the first year of the covid-19 pandemic. P&O are in the early stages of the process but rather than a straightforward fire and rehire, they could replace staff with agency workers and allow those made redundant to join the agencies.

“This may assist P&O financially but reputationally this could have serious consequences. There is almost certainly going to be legal challenges by the unions around this process as well as mass tribunal claims but the biggest damage for P&O could be reputationally, with questions around their morality in dealing with staff being raised. The RMT union have stated that the situation was “turning into one of the most shameful acts in the history of British industrial relations” and also one which could overshadow the 185 history of P&O.”

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