The decision by P&O Ferries to fire its entire workforce without warning is the latest example of a brutal redundancy process that is likely to have serious repercussions.
The ferry firm made all of its 800 employees redundant with immediate effect, with some staff being given the news they had lost their jobs in a video call (1)
It was reported workers were given zero notice before being escorted off their ships. Some are said to have been removed after refusing to leave.
In a press release the RMT Union reported security guards at Dover were seeking to board ships with handcuffs to remove crew so they could be replaced with cheaper labour (2)
The RMT labelled it one ‘of the most shameful acts in the history of British industrial relations’. Protests in support of were held at ports across the UK following the announcement.
It is a move that could have serious repercussions for P&O.
Collectively redundancy law applies, and is very clear, when making 20 or more workers redundant (3)
When doing so within 90 days an employer should conduct a reasonable consultation process before any dismissals.
Where an employer does not consult its employees in a redundancy situation, any redundancies it makes will almost certainly be unfair.
In circumstances where an organisation is dismissing more than 100 workers it must notify the business secretary in writing of the proposed redundancies.
The employer should do so before it gives notice to those being made redundant, and it should be at least 45 days before the dismissals begin. It is unclear if P&O complied with this legal requirement.
There are no set rules to follow if there are fewer than 20 redundancies planned, but it is good practice to fully consult employees and their representatives.
An employee has a right to redundancy pay if they have worked for an employer for two or more years (4)
It has been reported that P&O will pay ‘enhanced severance packages’ to redundant employees to compensate them for lack of notice (5)
The packages said to have been offered are claimed to be ‘well beyond the statutory requirements and the redundancy terms’ within the collective bargaining agreement.
When a business goes bust or has to cease trading for some other unexpected reason it can be a legitimate reason for failing to follow a fair and proper redundancy process.
However, the reported plan by P&O to replace its workforce with agency staff, said to be paid a lot less, is unlikely to help it in its defense against any unfair dismissal claim.
For there to be a genuine reason for a redundancy dismissal a business must be changing what it does, doing things in a different way e.g. example using new machinery or changing location or closing down (6).
In any redundancy dismissal the employer must be able to demonstrate the employee’s job will no longer exist.
The reported actions of P&O in firing it existing staff and rehiring cheaper labour, is highly unlikely to be considered an extreme scenario that can justify the mass dismissals, or be accepted as evidence that the jobs no longer exist.
The practice of firing an entire workforce by Zoom is nothing new. Not too long ago we reported in this space how Vishal Garg, CEO of mortgage lender Better.com, was reported to have laid off 900 employees over a Zoom call (7)
Reports said in the three-minute call, staff at the US-based digital mortgage lending company were bluntly told: 'This isn't news that you're going to want to hear. If you're on this call, you are part of the unlucky group that is being laid off. Your employment here is terminated effective immediately.’
If redundancies are necessary an employer should always conduct a fair process, consult with staff, share information with them and look at and consider reasonable alternatives to dismissal.