P&O Ferries CEO Peter Hebblethwaite has admitted the company broke the law by sacking 800 workers without consulting trade unions.
During a grilling from the Transport Committee and Business, Energy and Industrial Strategy Committee, Mr Hebblethwaite and DP Worlds Chief Operations Officer Jesper Kristensen said they had not consulted with the unions because there was “no way” they would agree to their decision.
The move to fire 800 workers was justified on the grounds that the company was moving from one operating model to another, in order to remain competitive and sustainable in the modern market. Such a move necessitated the firing of 800 workers or risk the loss of a further 3,000 workers and the closure of the business.
Nonetheless, this has sparked outrage and the HR community has condemned Mr Hebblethwaite’s and P&O Ferries’ actions as unethical. By failing to notify employees beforehand, the company can expect large waves of unfair dismissal claims in the coming weeks and months.
While the Prime Minister, Boris Johnson, has said the company would be hit with criminal prosecution and potentially unlimited fines ‘running into the millions of pounds’, Government ministers have since said that he may have ‘overstepped’ the mark. Due to a 2018 change of an EU law, The Trade Union and Labour Relations Act 1992, the Secretary of State for Transport, Grant Shapps, no longer has to be notified of mass redundancies on ships registered overseas.
Despite this apparent legal loophole, the company will still likely face industrial action and further legal consequences for their actions.
Kate Palmer, Peninsula’s HR Advice and Consultancy Director said: “Collective bargaining agreements are in place between an employer and trade union to safeguard workers’ rights during times of significant change. Such an agreement will typically outline the processes which must be adhered to should an organisation wish to make redundancies or change the terms and conditions of its workforce. This will expressly include a requirement to consult with the union. It’s clear P&O Ferries breached this agreement, for which they may face industrial action, in addition to any penalties from the UK government and public reputational damage.
“It would appear P&O Ferries must comply with the rates of pay set out by the International Transport Federation/International Labour Organisation, where the minimum recommended rate for an Ordinary Seaman is only $1.99USD per hour. In the UK, this is considerably low and would not be lawful but, assuming jurisdiction is applied correctly, it is possible for these workers to receive this rate of pay. Whilst this raises questions over the ethics and morals of the organisation, and support for employee wellbeing, P&O has outlined that wage savings are necessary to protect its long-term viability. In making this business decision, a reasonable employer would factor in the impact of low salaries, especially in the midst of the current cost of living crisis and introduce appropriate measures to assist staff in other ways; for example, through the provision of an employee assistance programme (EAP).”
While their brand has undoubtedly taken a hit, Mr Hebblethwaite has said he hopes the business can move past this temporary setback and rebuild its reputation, despite large numbers of cancellations on P&O trips.
Despite admitting to breaking the law by not consulting trade unions – a decision which Mr Hebblethwaite said he make again if given the opportunity – initial legal analysis suggests that the company does not appear to have directly breached any employment legislation.
