P&O Ferries: Redundancy gone wrong
P&O Ferries have been subject to significant scrutiny and adverse publicity over the past week, after dismissing 800 employees via a three-minute pre-recorded video call with plans to replace them with cheaper workers. Members of staff were told during the call that it was their "final day of employment".
The Government has stated that such action was "wholly unacceptable", and the RMT union is threatening legal action, calling it one of the “most shameful acts in the history of British industrial relations”.
P&O reportedly noted that it was a "tough" decision, but without such changes, it would not have been a viable business.
So, what should P&O ought to have considered prior to announcing their decision?
- Firstly, P&O ought to have determined how many employees were being made redundant at a 'single establishment'. It is likely that, in this case, the establishment would be the port that the crew were based.
- Then, for each port, they should have considered how many employees they were 'proposing' to dismiss. Note that, an employer may 'propose' redundancies, whilst alternatives to redundancy are also being considered.
- Where 20 – 99 redundancies were being proposed at one port, P&O had an obligation to begin consultation with employee representatives at least 30 days prior to the first dismissal taking effect. Where the proposed number of redundancies was over 100, the period of consultation is a minimum of 45 days.
- P&O should then have lodged a form with the Government advising them of the number of redundancies being proposed, once again a minimum of 30 days prior to the first dismissal taking effect. Note that failing to do so is a criminal offence.
- During the consultation period, P&O should have held meetings to provide the employee representatives with information about the redundancies, including the reasons for such proposals. The aim of such meetings is to discuss the proposals and any potential alternatives to redundancies During this time, no dismissals should take place.
P&O's failure to follow the above consultation process may result in an award of up to 90 days' pay for each affected employee. This is in addition to any awards made by the Tribunal for unfair dismissal.
It is yet to be determined whether the exemptions in the legislation that apply to mariners are applicable in this case, but in the event that they do not apply, P&O will likely be subject to considerable financial ramifications.
We strongly advise employers to seek legal advice where they are planning on making redundancies.