P&O's PR disaster exposes HR's critical role in risk management

Ethical failures, like the recent firing of 800 staff without consultation by ferry company P&O, can prove costly to business and seriously damage people’s lives. Employers – and HR – say experts should prevent such failures by holding themselves to high ethical standards.

David Liddle, CEO of culture consultancy The TCM Group, told HR magazine that the mass firing at P&O highlighted the damaging impact of mistreating employees.

He added: “It also presents an opportunity for HR to reflect on the critical role it can play in preventing situations like this in the future. 

“Although P&O is an extreme example, individuals face the prospect of redundancy and damaging tribunals every day – situations in which no one wins other than legal teams.”

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Prime minister Boris Johnson told the Commons Wednesday (23 March) that P&O appeared to have broken the law by its conduct. The next day, Peter Hebblethwaite, chief executive of P&O, admitted that the company had not given adequate period for consultation.

Some concerns have been raised, however, over whether the company (which has ships registered in Cyprus, the Bahamas and Bermuda) will fall under UK jurisdiction.

This is not just an issue of whether the P&O sackings are unlawful, however, explained Tilly Harries, employment barrister and director at PwC.

Posting publicly on LinkedIn, she said: “Over the years we've seen a number of what were once ‘lawful’ practices subsequently be deemed unethical, for example advising on tax avoidance schemes and using non-disclosure agreement (NDAs) to silence sexual harassment victims. 

“The reputational, human and societal impact must always be considered in addition to lawfulness. 

“Put simply, just because it's legal, doesn't mean that it's right.”

Josh Bersin, HR analyst and CEO of The Josh Bersin Company, told HR magazine that when employers fail to act morally, the damage to their brand can be enormous.

He said: “While companies have the right to make changes they feel necessary in the face of existential threats, the negative impact on the brand can be enormous.

“And as we now live online, aggrieved employees will say so, and online. And these kinds of fighting words get shared.”

According to Liddle, an adversarial approach is doomed to failure.

He said: “Within the most successful organisations, which are attracting the top talent, HR has transformed into a people and culture function – a real advocate for the needs of the people. 

“This people and culture function supports managers to have early resolution conversations and brings unions and employees together to head off problems before they escalate.”

Bersin added: “If you start looking like a horrible place to work, you're going to suffer serious impacts — on not just morale, but business reputation and recruitment.

“If you have a reputation for not treating people well, you're going to be sorry.”

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