Failure to meet collective consultation requirements made P&O Ferries sackings illegal

Coodes Solicitors employment specialist Philip Sayers says P&O Ferries broke employment laws by failing to meet collective consultation requirements when it sacked 800 staff by video call.

The recent events involving P&O Ferries sacking 800 staff on a video call led to the biggest employment law news story in recent history. The company has been universally condemned for firing staff without warning and replacing them with cheaper overseas workers.

The Government has now announced its intention to introduce legislation to ensure that ferry companies that operate out of UK ports pay at least the National Minimum Wage. Whether that then leads to P&O Ferries staff being reinstated in their roles remains to be seen.

P&O Ferries’ actions are described by the Government has “wholly unacceptable” and have led to an onslaught of criticism. From an employment law perspective, however, what did they really do wrong? The key legal issue was around their failure to comply with collective consultation requirements.

Did P&O Ferries break collective consultation rules?

If an employer is making 20 or more staff from the same site redundant within a 90-day period, it needs to follow a collective consultation process. This involves going through a series of steps, including consulting with staff and trade unions and informing the Government, before issuing redundancy notices.

P&O Ferries completely disregarded this process, despite making 800 employees redundant. In fact, the company has publicly acknowledged that, by law, it should have followed a consultation process and registered the redundancies with the Government.

The company avoided going through consultation and is now offering sacked employees compensation worth more than £36million. Staff are also being asked to sign a settlement agreement not to pursue legal action against their former employer if they take the compensation money.

What is a fair redundancy process?

We know that P&O Ferries not only acted illegally but that their actions have seriously damaged the company’s reputation. So, what does a fair redundancy process look like?

While every employer’s situation is different, a fair redundancy process involves eight main steps. This starts with setting out the business case for the redundancies before establishing whether or not you need to follow collective consultation.

While collective consultation is only a legal requirement for redundancies involving 20 or more employees, many smaller employers choose to follow a similar process. Consulting with staff and trade unions before issuing redundancy notices will generally make the process smoother and fairer.

With Government legislation on paying ferry staff due imminently, the situation is ongoing and we don’t yet know how it will conclude. However, one thing that is for certain is that this crisis has brought to the fore the importance of following a fair redundancy process and meeting the legal requirements of collective consultation.

For more information or advice, please contact the Employment team at Coodes Solicitors: 0800 328 3282 or cde@coodes.co.uk