Every once in a while, we get a perfect example as to exactly what not to do in the event of redundancies.

On 17 March, 800 employees at P&O Ferries were told via a pre-recorded Zoom call that their employment had ceased with immediate effect. The staff have been replaced with cheaper agency workers in a move described as ‘securing future business viability’.

P&O Ferries boss Peter Hebblethwaite has since admitted to MPs that he was in “absolutely no doubt” that under UK employment law the firm should have consulted unions, and in not doing so P&O did indeed break the law. He said no union would have accepted the plan anyway, and insisted he would ‘make the same decision again’. P&O have insisted a U-turn would cause the company’s collapse and a loss of an additional 2,200 jobs. The RMT Union referred to the situation as ‘one of the most shameful acts in the history of British industrial relations.’

If an employer wishes to make more than 100 staff redundant, it is required to:

• Give at least 45 days’ notice.
• Warn staff they are at risk of redundancy.
• Conduct a formal consultation process where alternatives are explored.
• Full details of the procedural requirements around redundancy can be found here.

P&O Ferries have reported losses of £100m, meaning the consultation would probably have led to the same outcome. However, this does not serve as an excuse for not adhering to the legal process. Workers were offered an ‘enhanced compensation package’ with a total value of £36.5m. Under the package, no employee received less than £15,000 and around 40 received more than £100,000 each. The package was subject to terms and conditions; preventing former employees from pursuing future action against P&O, and preventing former employees from talking about P&O in any capacity.

Alison Gill, HR Manager at advo said:

It’s likely the dismissals would be deemed procedurally unfair, but could still be accepted at Tribunal as substantively fair. However, P&O would need to show they had followed a reasonable process leading to the decision to dismiss and rehire. Just one of the workers has not accepted the terms and is taking P&O to Tribunal – until the ruling for this is finalised, we simply won’t know.

Sadly, as companies continue to struggle with vulnerable finances post-pandemic, I anticipate fire and rehire practices will gain traction. Redundancies at a struggling firm are a harsh reality, but sacking staff on the spot via a pre-recorded message and immediately removing from their place of work with security is a route which I find very difficult to justify. It is sad that employees were treated with such little regard, and will impact company culture for existing employees, negatively influence employee turnover, and impact the company’s ability to successfully recruit in the future.

The redundancy guidelines in this article are applicable to the UK only, and are intended as a guide only. For expert HR support regarding redundancies or any other HR situations, please contact us today.