· News

P&O Cruises owner flip-flops on fire and rehire

Cunard's Queen Mary 2 is among the cruise ships affected

Cruise operator Carnival UK was embroiled in a fire and rehire controversy last week (23 November), after it made legal provision to fire more than 900 UK-based crew and rehire them on less favourable conditions.

A leaked letter, allegedly from Fleet Maritime Services, a Bermuda-registered firm that employs staff for Carnival UK’s P&O and Cunard cruise lines, warned that dismissal and re-engagement would be considered if agreement could not be reached on new terms of employment.

Read more: Fire and rehire tactics surge during COVID-19

Marine worker union Nautilus International, which represents some staff on the 10 affected cruise liners, said the proposals, if true, would have meant pay cuts of up to 20% for some staff, and changes in working conditions for many others.

Consultations with staff about the changes only started on 14 November, the day before Fleet Maritime Services notified the insolvency service of its plans, according to The Guardian.

In the company’s HR1 form – required for mass redundancies – dismissal and re-engagement was mentioned explicitly as a back-up plan following negotiations over the changes in working conditions.

The cruise firm categorically denied any possibility of redundancies in a statement to press, also stating it would not dismiss and re-engage staff.

Martyn Gray, Nautiulus CEO, said: “This is a welcome move from Carnival UK and a positive indication of their commitment to engage in a meaningful consultation with us over changes to members’ terms and conditions.

“We thank them for their commitment to not dismiss and re-engage and look forward to working with them to come to a negotiated settlement in the interests of all parties.

“However, fire and rehire or dismissal and re-engagement, should never be an option for any employer to force changes to terms and conditions and the UK government should commit to outlawing this, a statutory code of practice is not enough.”

Workers affected by the changes included those aboard Britain’s largest liners, including the Queen Elizabeth and Queen Mary 2.

Carnival UK, which owns P&O Cruises, is a separate and unrelated entity from P&O Ferries, which made news for its own contentious use of fire and rehire tactics in March 2022.

Tim Tyndall, employment partner at Keystone Law, said it was odd for the company to have both denied its intention to fire and rehire while also having allegedly filed the HR1 form.

He told HR magazine: “We have not seen the completed form but again, it would be a mistake to refer to 'dismissal and reengagement' as has been alleged, if that was never a possibility.

“Perhaps a desire not to be tarred with the same brush as its P&O namesakes has led to a precautionary approach which Carnival might now be regretting. However, the extent to which its threat has been withdrawn, and how, is unclear, so there may be more to emerge on this.”

Read more: Just Eat employees forced to take up gig economy model

Matt Jenkin, employment partner at law firm Moorcrofts, told HR magazine that fire and rehire tactics are hugely controversial.

He said: “Whilst a lawful way of achieving changes to employment terms, employees are often feel that they have little choice but to agree to the changes if the alternative is to accept termination of employment with prospect of a difficult, costly and drawn out tribunal claim to secure any redress.”

The government will likely face further pressure off the back of Carnival’s climbdown to implement the statutory code of practice on fire and rehire tactics.

“While that code will not outlaw its use, it will make it more onerous for employers which want to go down that route,” Jenkin said.

“Consultation on the draft code closed in April 2023 and perhaps this latest story will trigger the implementation of that code.”