On 17 March 2022, P&O Ferries sacked 800 of their crew members with immediate effect, many of them via video. Upon hearing the news, many dismissed workers refused to leave their ships and were later removed by the police.
From the evidence P&O boss Peter Hebblethwaite gave to MPs, it is clear that this was a calculated decision, which he indicated had been necessary to save the business. It has been reported that P&O have offered compensation packages and settlement agreements to their dismissed employees.
The action of P&O Ferries potentially exposes the company to significant legal risks, however, the detail of employees’ contracts and where the vessels they worked on are registered is not known and the company may not have breached UK legislation and therefore we are unable to comment on the specifics of the case.
Ordinarily, where a company is proposing to dismiss 20 or more employees at one establishment within a 90-day period for the reason of redundancy, the employer is obliged to engage in collective consultation with a trade union or (if no union is recognised) elected employee representatives under the Trade Union and Labour Relations (Consolidation) Act 1992 (“the Act”). In addition, a company must file a form HR1 with the Secretary of State for the Department of Business, Energy and Industrial Strategy notifying of the proposed redundancies and failure to do so is a criminal offence. The requirements of collective consultation are set out in the Act and there are a number of prescribed matters which must be covered in consultation. If over 100 employees are to be dismissed the consultation period is 45 days.
Employees who are dismissed where an employer has not engaged in collective consultation may claim unfair dismissal and a protective award. Compensation for unfair dismissal is capped at £89,493, rising to £93,878 from April 2022 and 90 days gross pay per affected employee for failure to consult.
Employees can apply for reinstatement, however this remedy is rarely awarded by the Employment Tribunals.
Employers can argue special circumstances which render it not reasonably practicable for them to comply with collective consultation obligations.
The Government has indicated that it will legislate to avoid employees being dismissed on mass in the future; however it is difficult to envisage what such legislation may look like. The current legislation already imposes penalties, in the form of compensation for employees, for companies who do not comply with the Act and unfair dismissal legislation. In effect parliament has already considered what the appropriate remedy is for employers who do not comply with their collective consultation obligations.
If you have any queries regarding this alert or any queries in general, please contact our employment team on 01228 552600 or 01524 548494.
This alert does not provide a full statement of the law and readers are advised to take legal advice before taking any action based on the information contained herein.