Large Scale Dismissals – are they legal?

Dismissals are always worrying, but when they happen on a large scale, are they legal? 

We looked at what happened a year ago, on the 17^th of March 2022, when P&O Ferries sacked nearly 800 UK employees, without, so far, serious consequences for the company.

How UK Law should protect employees:

When you lose your job you should be protected by existing laws on consultation and redundancy payments.

For example: when 100 or more employees are likely to lose their jobs, Employers should consult with them and with any recognised Trade Unions for at least 45 days before the date of their dismissal; and when between 20-99 employee are likely to lose their jobs, consultation should be for at least 30 days before dismissal takes effect.

In addition, Employers should notify the Government about intended redundancies in advance. See more information about Redundancies in our Crunch article, and general information about changing employees’ contracts.

What did P&O do in March 2022?:

Basically, they ignored the above consultation requirements.

In March 2022, P&O said its survival was at stake after a £100 million loss in one year, and that without sacking these staff, there would be no future for the firm. This is despite having taken substantial Government subsidies during Covid lock-downs, and despite the fact they are owned by Dubai-based DP World, who made a $884 million profit in the first half of 2022.

On the 17^th of March 2022, P&O staff were sent an email at 7am telling all vessels to return to port for a major announcement.  A pre-recorded video message was played to staff via Zoom at 11am, telling the 786 staff they were being fired without notice and should immediately leave their ships.

These staff were all unionised and were replaced by non-unionised, often foreign staff, who are now being paid substantially below the National Minimum Wage (on routes outside of the UK) and are employed on agency zero-hour contracts. The RMT Union said some new agency staff were being paid £3.97 per hour and were being employed by crewing agents based outside of the UK, to avoid UK laws.

The sacked staff were ordered off the ships at very short notice by security teams. The majority of the sacked employees were based at the Port of Dover, however other staff were based at Kingston upon Hull, Liverpool, and Cairnryan.

What happened next?

Immediately, there were calls from all sectors of society for this type of company behaviour to be banned. However, as of now, nothing has changed, and such actions have not been outlawed, despite MP’s, union leaders and employment experts calling for a change in the law and an increase in the financial penalties for company’s flouting the existing laws.  

So far, P&O hasn’t been prosecuted and its CEO, Peter Hebblethwaite – despite a disastrous appearance before the House of Commons Transport and Select Committee later in March 2022 (see below) – remains in place.

So, as things stand, currently other companies are free to do the same to their staff, if they are prepared to face a PR backlash.

P&O’s CEO Peter Hebblethwaite’s appearance before the Common’s Transport and Business Committees:

On the 24^th of March 2022 the CEO appeared before a joint hearing of the House of Commons Transport and Business Committees – you can watch some of his appearance online.

In his evidence, the CEO said he hadn’t read any safety risk assessments about replacing experienced crew with agency workers before deciding to sack the existing crew.

He also told the committee that he had deliberately broken the law and that he would do it again. He said there was “absolutely no doubt” the company was required to consult with staff and Trade Unions, but P&O had decided that “no union could accept it [the change required] and therefore we chose not to consult”….

Darren Jones, the Labour MP Chair of the Business Committee asked Mr Hebblethwaite “are you in this mess because you didn’t know what you are doing, or are you just a shameless criminal?”.

What the Government said then and what they have done since?

Rishi Sunak, who was Chancellor at the time, said on the 20^th of March 2022 that “what we’re seeing is appalling and the way that they’ve treated their workers is awful…. We’re looking across Government at our contractual relationship with P&O and reviewing these”.  (The Government did indeed review this, and at the end of May 2022 it announced it was ending its contract with P&O – however in July 2022 it emerged that some Government departments may still be using P&O services).

Boris Johnson, who was Prime Minister at the time, said on the 23^rd of March 2022 that “It looks to me as though the company concerned has broken the law and we will be taking action”.  Later, in Parliament, Johnson said he believed P&O had broken the (amended) TULRA 1992 law, under which it’s a criminal offence not to notify the Government in writing 45 days in advance of making 100 or more redundancies.  He also said “P&O clearly aren’t going to get away with it”.

A few days later however, a Business Minister said the Government appeared to have no powers to ‘injunct’ P&O, and that only individual workers could take the company to court.

No criminal prosecution has ever been made against P&O Ferries.  

A civil investigation by the Insolvency Service (IS) is still ongoing.  The IS has the power to disqualify company directors if they are found guilty of misconduct, including dishonest practice. The IS had concluded in August of 2022 that it had “no realistic prospect” of making a criminal conviction.

Currently the Government is ‘consulting’ on a new statutory code of practice against dismissal and re-engagement (“fire and rehire”) tactics, which would make it “explicitly clear to employers that they must not use threats of dismissal to pressure employees into accepting new terms…”. But the new code would not outlaw “fire and rehire” (or “fire and replace”) tactics, it just says it should be a last resort option. The new code will be taken into account by Employment Tribunals where relevant and will allow the Courts/Employment Tribunals to increase the compensation companies have to pay to sacked workers by up to 25%, if the company didn’t follow the new code.

Several senior employment lawyers have criticised the new code for not being legally binding and for lacking disincentives to stop such actions happening again.

The new code is intended to provide guidance for employers and the consultation will close on the 18^th of April 2023. More details to follow once the Government replies to the consultation.

What happened to the sacked workers?

The workers knew that even if the company had acted legally they would probably, eventually, have lost their jobs. But it was the callous manner of their sacking which made the job-losses harder to bear.

Some of those workers who were sacked are still jobless, or have had to take other, lower-paid work. Relationships have suffered, depression has increased. Some have lost their personal belongings as they had so little time to clear their lockers/cabins of their effects; others got some belongings back several months later; some personal belongings were thrown out by P&O.

Although P&O replaced most of the sacked workers with agency staff, they did struggle to replace all the sacked staff, and approached some sacked workers about returning on an agency contract – basically a zero hours contract, with pay only for when they worked, and no holiday or sick pay/leave.

All but one member of staff agreed to a financial settlement with the company, rather than pursuing an employment tribunal claim against the company – largely to avoid any delays in receiving their due compensation, but also to avoid the additional stress of taking such action. The settlement packages required staff to sign a non-disclosure agreement in order to receive the compensation, so few are prepared to speak out about it, but it’s understood they were paid their correct redundancy payments and received compensation for the lack of consultation.

However, a chef called John Lansdown, who publishes a blog called ‘War on Seafarers’ about the matter did pursue action against P&O, and he won his unfair dismissal claim in September of 2022. He received an undisclosed settlement which he donated to a Sailors Children’s charity. Lansdown had spent 15 years working for P&O and said “we didn’t just lose our jobs – it was a way of life, being a seafarer… we spent half the year living on those ships”.

The replacement crews and ship safety concerns:

The RMT believe the replacement crews are working on very low wages and are being exploited. It’s believed they are working for longer periods of time without shore leave/rest-time, than the previous permanent crew.

It’s also believed that the agency workers move from ship to ship more frequently, so will have less knowledge about each individual vessel and their crew and their shipping conditions.

A month after the cheap crew were hired to replace the sacked workers, Peter Hebblethwaite, CEO of P&O, was in the news again, as he had to sack seven of the new crew for returning to their ship drunk.

The UK’s Maritime and Coastguard Agency have since intervened with at least 3 P&O ship’s and detained or warned the ships because of lack of crew training, poor maintenance, fire safety, and lifeboat safety concerns.

We've got more helpful resources for those affected by redundancy, so take a look at our guide to disciplinary and dismissal procedures and UK employment law for more advice. Alternatively, contact us for expert advice on your individual circumstances.

Please note that the advice given on this website and by our advisors is guidance only and cannot be taken as an authoritative or current interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland.