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P&O Ferries’ Redundancies- What is the legality of mass redundancy?

Last month, it was revealed that P&O Ferries dismissed 800 members of their staff, and this caused heated debates regarding the legality of the immediate effect of mass redundancies.

On the morning of the 17th of March 2022, it was revealed that P&O Ferries (P&O) had taken the unlikely decision of terminating the employment of 800 of their staff members with immediate effect. This sparked a serious debate surrounding employment law and the legality of this action. While the mere multitude of employees that this affected attracted national media attention and discussions, it is important to understand the legal implications surrounding this decision and why it drew heavy media attention and criticism.

When it comes to the law of collective redundancy, the policy states that the employer must notify the Secretary of State of the proposed redundancies (in writing) before giving notice to the affected staff members about the termination of their contracts. It is unclear whether P&O complied with the legal requirement of notifying the Secretary of State of these requirements. Media outlets such as The Guardian and iNews have suggested that ministers were indeed made aware of P&O’s intention of the grand dismissal. However, if they did, in fact, fail to notify the Secretary of State beforehand, this is considered a criminal offence in which the directors of P&O and other senior members of staff involved in deciding the mass redundancies could be prosecuted resulting in an unlimited fine.

In addition to this, the employer proposing to make 20 or more staff members redundant within 90 days or less in an establishment must consult on its proposals before these dismissals occur. If the UK employment law does indeed apply to P&O’s staff members and they did not comply with this regulation, by consulting these members of staff before announcing the redundancies, this means the cumulative dismissal was an unlawful action and can be penalised in court. In these types of cases, where an employer proposes to make 100 or more redundancies, the consultation must start at least 45 days before the dismissal officially comes into effect.

UK Employment legislation sets out a strict consultation process that should be followed prior to any redundancies. This means the consultations should begin at a reasonable time (a minimum period of 30 days for 100 or fewer redundancies and a minimum period of 45 days for 100 or more redundancies.)

The employer is also required to provide certain information regarding the appropriate representatives of the affected staff members. This information can include, but is not limited to:

– The descriptions and numbers of employees who have been proposed to be dismissed as redundant.

– The proposed method of carrying out the dismissals with proper regard to any agreed procedure, which also includes the period over which the dismissals are going to take effect.

– The reasons for the proposed dismissals.

There are certain extenuating circumstances (referred to as special circumstances) where it may not be reasonably practicable for an employer to provide the information mentioned above or consult in good time. On these very rare occasions, the employer would most likely have a defence for failing to comply with the legal regulations. Either way, the employer should still attempt to comply with their duty of consultation as long as it is practicable. It still remains unclear as to whether the above rules apply to P&O and whether they are willing to rely on the special circumstances defence.

If P&O have indeed failed to adequately consult their staff, then the potential consequences depend upon the circumstances:

  1. An employment tribunal could grant a former employee a protective award for up to 90 days of gross pay per staff member.
  2. Staff members with over two years of service could claim unfair dismissal against P&O. If this deems successful, they would be entitled to compensation.
  3. The recognised trade unions can claim against P&O for their regulation failures of failure to consult.
  4. If P&O failed to adequately notify the Secretary of State, they could be held criminally liable and face an unlimited fine.  

Other than its duty to consult, it is also unclear as to whether the circumstances apply to the obligation for P&O to transfer the employment of their dismissed staff members to the new crew provider under TUPE rules. If the TUPE transfer was required but not carried out, further legal awards could be granted to the affected staff. The overall action made by P&O Ferries sparks questions regarding their compliance with international seafaring law, along with reports that they are planning on replacing their dismissed staff with international agency workers from foreign countries. 

Since these recent revelations regarding the redundancies carried out by P&O have come to light, they continue to face significant backlash from media outlets and public social media platforms. There are also reports of P&O requiring staff to sign NDAs, and while this is not entirely uncommon regarding settlement agreements, it demonstrates that some employers no longer feel obligated to approach the treatment of their staff with the utmost moral stance. P&O has already faced damaging press and will most likely have an equally damaging effect on industrial relations. It has also increased the pressure on the Government to enforce workers’ rights.

At Eric Robinson, our specialist employment solicitors regularly advise clients who require representation in an employment tribunal. They will also provide expert advice on unfair dismissal, discrimination, or breach of restrictive covenants. Our lawyers regularly partner with employers and employees looking to reach a settlement agreement or when dealing with a redundancy process.

We are authorised and regulated by the Solicitors Regulation Authority, and our team is ready to work closely with you. We are here to understand your situation and to advise you on what to do next.

Call us today on 0238 021 8000 to book your initial consultation or make an enquiry by filling out our contact form. We also have offices in Southampton, Winchester, London, Chandlers Ford and Lymington, and we can discuss fixed fee options and whether legal expenses insurance could be available to you.

P&O Ferries’ Redundancies- What is the legality of mass redundancy?

Our Senior Solicitor in the Employment Department, Harinder Sanga has outlined the rate changes which will be affecting both employers and employees, coming into effect from April 2022.

The majority of the April 2022 rate changes have been published, and one notable exception that is missing regarding the April 2022 rate changes is what the new statutory cap on a week’s pay will be to calculate the basic reward and statutory redundancy pay.

From 1 April 2022, the National Living Wage and National Minimum Wage are set to increase.

Some of these increases can be found in the table below:

Rate Increase April 2021 Rate April 2022 Rate
National Living Wage – Workers aged 23 and over 6.6% £8.91 per hour £9.50 per hour
National Minimum Wage – Workers aged 21-22 9.8% £8.36 per hour £9.18 per hour
National Minimum Wage – Workers aged 18-20 4.1% £6.56 per hour £6.83 per hour
National Minimum Wage – Workers aged 16-17 4.1% £4.62 per hour £4.81 per hour
Apprentice Rate 11.9% £4.30 per hour £4.81 per hour
Accommodation offset rate daily rate 4.1% £8.36 £8.70

Source:  National Minimum Wage and National Living Wage rates

In light of the new rate being set for the National Living Wage, the Government has also implemented the recommendations from the Low Pay Commission, available here.

Officials of the Low Pay Commission have highlighted how the economic situation has improved since 2021. Bryan Sanderson. The Chair of the Low Pay Commission suggested that the labour market has recovered since 2021 but also stated that despite this, “inter-related issues affecting global supply chains, rising input costs and staff availability present some near-term risks.”

A few other areas covered in April 2022 rate changes are increases in family friendly payments, Statutory Sick Pay (SSP) and the new statutory cap.

Family Friendly Payment Increases

Statutory Maternity Pay– This has increased to a maximum of £156.66 per week which has increased from £151.97 per week (3.1%). Individuals are entitled to 39 weeks, at a rate of 90% of gross weekly pay per week, after the first 6 weeks.

Statutory Paternity Pay– Increased by 3.1%  from £151.97 per week to £156.66 per week, or 90% of average weekly earnings per week

Statutory Shared Parental Pay– Increased by 3.1% from £151.97 per week to £156.66 per week, or 90% of average weekly earnings per week

Statutory Adoption Pay– Increased by 3.1% from £151.97 per week to £156.66 per week. Individuals entitled to this can receive it for 39 weeks at a rate of 90% of gross weekly pay per week, after the first 6 weeks.

Statutory Parental Bereavement Pay– This will rise by £151.97 per week to £156.66 per week.

Statutory Sick Pay (SSP) Increases– For employees and workers entitled to Statutory Sick Pay (SSP), the rate will increase by 3.1%, from £96.35 per week to £99.35 per week. The lower earnings limit (LEL) will increase from £120 to £123 per week and this represents the first increase of the LEL in two years.

The New Statutory Cap

The statutory cap on a week’s pay regarding the basic award and statutory redundancy pay has risen from £544.00 per week to £571.00 per week and will come into effect from the 6th April 2022.

To find out how much individuals in various age ranges are entitled, and how to calculate your unique statutory redundancy pay, click here. The maximum Statutory Redundancy Pay (based on 20 years’ service, and an age multiplier of 1.5) has now risen to £17,130.00 from £16,320 in total (when considering 20 x £571.00 x 1.5).

Employment Tribunal Compensation

Another approaching change, due from the 6th April 2022 is Employment Tribunal Compensation. The amount that a successful claimant is awarded is calculated in the same way as Statutory Redundancy Pay. If a claimant has been judged to be unfairly dismissed, they are entitled to compensation amounting to a maximum of 52 weeks’ pay which is subject to an overall cap, and that capped allowance rises from £89,493 to £93,878. 

Get in touch with our Employment Solicitors

Our specialist employment solicitors are ready to help. We can offer expert legal advice on any issue you’re facing and we will be by your side every step of the way.

We have many years of experience in working with both employers and employees across England and Wales. We’re pragmatic and professional, and we will deal with cases in a language you’ll understand. We’re experts in managing workplace issues and offer a full list of services.

We provide legal advice in several areas, working in a wide variety of sectors with clients of many different sizes. If you have a claim, issue or enquiry you would like detailed information regarding please phone us. Our specialists will offer expert employment law advice, keeping you in close contact throughout the process until an agreement or solution is reached.

Call us today to book your initial consultation. We have offices in Southampton, Winchester, London, Chandlers Ford and Lymington and we can discuss fixed fee options and whether legal expenses insurance could be available to you.