P&O Ferries’ decision to dismiss 800 crew without notice has caused outrage but the questionable legality of the move was clearly not a deterrent for the company, employment lawyers have said, with the cost of tribunal cases likely to have been priced in.
Martin Williams, head of employment at legal firm Mayo Wynne Baxter, told Personnel Today that the workers were viewed by the ferry firm as “collateral damage”.
He said: “I fully expect P&O Ferries, and their ultimate owner [DP World], will have ‘priced-in’ the probability of legal challenges and the possibility of settling them. This is part of the cold calculation they will have made which was manifest in the pre-recorded announcement to workers. The livelihood of the workers is seen simply as collateral damage when making such a move.”
Williams added that the inadequacy of employment legislation in the UK had been exposed by the company: “The wider ramifications of these actions may not have been part of the thinking for P&O Ferries but will grow in importance. This case has illustrated the fragility of employment legislation and the enforcement of it. While offshore work is subject to its own legal peculiarities, public attention has been drawn to long-expressed concerns about the extent and strength of employment rights more generally.”
One aspect of P&O Ferries’ decision that had attracted little attention so far was that only the company’s British crews were subject to the redundancy. Williams said: “The fact that French, Irish and Dutch P&O Ferries workers have not been treated in the same way is illustrative of the paucity of rights for UK employees. The protections afforded elsewhere means workers in the UK’s fluid labour market, while lauded by many, will inevitably lose out, by comparison, when international employers are looking to make personnel-based savings.”
With the debate over employment rights now open, he said: “Unscrupulous employers will be alive to such drastic tactics and may seek to follow a similar path. Unions and alike will use this as an example of why rights should not be reduced but strengthened.
“The government has been taken by surprise and will have noticed the public backlash. Any moves for reform – a euphemism for reduction – of rights will have to be paused while debate is played out.”
P&O Ferries believes redundancies are lawful
Nathan Donaldson, employment solicitor at Keystone Law, however, said that P&O Ferries believed that its action was lawful: “In response to the public backlash, proposed government scrutiny and proposed union litigation, P&O Ferries have advised that their treatment of the employees was lawful because the employees were not being employed under UK contracts and therefore, not subject to UK jurisdiction. For this reason and under maritime law, P&O Ferries has alleged that their actions were lawful. No doubt the UK employees’ unions will be disputing such jurisdictional arguments.”
The fact that French, Irish and Dutch P&O Ferries workers have not been treated in the same way is illustrative of the paucity of rights for UK employees” – Martin Williams, Mayo Wynne Baxter
University of Salford HR expert Dr Jonathan Lord pointed out the government’s rejection of last year’s fire and rehire bill may have contributed to P&O’s decision. He said: “This could be extremely costly for P&O but in the long term could it be economically beneficial? Ministers last year blocked a bill to ban fire and rehire even though 9% of workers were affected by such a scheme in the first year of the Covid-19 pandemic. P&O is in the early stages of the process but rather than a straightforward fire and rehire, they could replace staff with agency workers and allow those made redundant to join the agencies.”
He added that because of Brexit it may have been easier for the UK crews to be targeted by P&O Ferries but added that little was known about what kinds of contracts the crews were working under with DP World operating a “matrix” style employment system.
P&O Ferries should hand back furlough money
Meanwhile, defence minister James Heappey has told the BBC that P&O Ferries should hand back £10m in government furlough payments. He said: “It certainly feels to me that it would be the right thing to do for P&O to hand that money back and I am sure that colleagues at the Treasury and Department for Transport will be looking into it.
He added that the government “didn’t get much more notice” of the redundancies than did the employees of P&O” and was not in a position to act. “Sadly it’s the case that the govt cannot force an employer to continue to employ people it has said it doesn’t want to continue to employ,” Heappey told Sky News.
Mark Dickinson, the general secretary of seafarers union Nautilus International, said the sackings had “ripped the guts out of everybody”. He told Radio 4’s Today Programme that it was a dark day in the shipping industry. “I’ve been in this game for over 40 years and I’ve seen some curveballs and some shocking developments over those times, but this is a new low,” he said.
A further knock-on effect of the mass redundancy could be major supply chain problems. It is reported that P&O Ferries handles 15% of all freight into the UK – and a third of all freight in and out of France. Logistics experts have said that if P&O ships are in the dock for 10 days as predicted, there could be shortages of fresh food in the supermarkets, and parts for manufacturers. Prices will likely rise, with inflation already rising fast.