P&O firings: ‘breath-taking’ redundancy decision may prove costly

Ferry company P&O could face significant financial and reputational damage in the courts after it fired 800 staff with immediate effect on 17 March.

Rustom Tata, chairman and head of the employment group at law firm DMH Stallard, told HR magazine: “The way that basic and fundamental employee legislation appears to have been ignored is nothing short of breath-taking.”

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P&O has reportedly decided to replace fired staff with agency workers. According to Tata, this suggests the company is trying to avoid the established expectation of seeking to renegotiate terms with existing employees and their representatives.

He added: “On that basis the 800 staff who were dismissed will undoubtedly have claims for unfair dismissal.

Dismissal of more than 100 staff at once requires an employer to carry out a minimum of 45 days of collective consultation with recognised unions or elected employee representatives.

If an employer fails to meet their obligations towards consultation, employees can make a claim to an employment tribunal.

If successful, the employer may have to pay up to 90 days’ full pay to each affected employee.

Nathan Donaldson, senior consultant solicitor at law firm Keystone Law, told HR magazine that the apparent failure to follow notice and consultation processes has made it highly likely a tribunal would find the dismissal to be procedurally unfair.

He said: “This could result in P&O employees being successful in a declaration of unfair dismissal, but they may not receive substantial damages unless they can show that the reason is also substantively unfair.”

A number of staff were removed by security after they refused to leave their ships.

Tata added: “The blunt delivery and nature of the announcement means that there may well be significant sympathy for employees in an employment tribunal, if cases are not settled before then.

“Soured industrial relations is one thing, but this could also quickly develop into a PR nightmare for P&O.”

In a statement released yesterday afternoon, P&O said: “Our survival is dependent on making swift and significant changes now. Without these there is no future for P&O Ferries.”

It added: “As part of the process we are starting today, we are providing 800 seafarers with immediate severance notices and will be compensating them for this lack of advance notice with enhanced compensation packages.”