Lessons to learn from P&O crisis
24 Apr 2022
You might think there’s not much that ‘ordinary’ companies can learn from the terrible way that redundancies at shipping giant P&O were handled.
After all, very few companies are of the size and scale of the ferry operator or find themselves in a similar position.
To jog your memories, P&O made national headlines for all the wrong reasons when it laid off 800 employees without any consultation and replaced them with new, cheaper labour.
Peter Hebblethwaite, CEO of P&O Ferries, even admitted to a committee of MPs that the firm broke UK law when it failed to consult with unions.
“We chose not to consult, and we are, and will, compensate everybody in full for that,” he said during questioning from the Transport Committee, arguing that no union would have accepted the firm’s plans to cut jobs.
But, if nothing else, we can at least use the P&O shambles as a template for how not to carry our redundancies.
The first point to remember, in law, is that if your company is planning to make 20 or more redundancies then you are obliged to tell the Secretary of State by completing for HR1. This is not a nicety, it is a mandatory part of employment law.
It’s quick and straightforward to complete – it can be found online – and the Government will come back to you once they have received it should they require any further information.
Once that’s done, you should apply the necessary minimum periods of consultation and ensure that employees are given the opportunity to elect their own representatives for the duration of the process.
You’ll also need to observe the minimum statutory notice periods – one week per year of service up to a maximum of 12 weeks.
Failure to do so means you could face claims of unfair dismissal and hefty payments of compensation. Experience shows that Employment Tribunals are sticklers for process, and if your company fails to get even these basics right then it can expect to find itself on the wrong end of their judgements.
Potential risks include being held criminally liable if you have failed to file the HR1, facing a protective awards of 13 weeks’ payroll for failing to consult and compensation awards of nearly £90,000 in respect of unfair dismissal claims.
So there’s plenty of good financial reasons for getting things right and following due process when these decision have to be made.
But more than that, would any employer want to be seen in the same light as P&O have found themselves cast in?
If the last few decades of employment relations have taught us anything it is surely that working with staff and building a collegiate approach is far more likely to produce the sort of results we are all aiming for.
By treating staff as a mere resource – just like any other part of the commercial process – we run the risk of not only devaluing their input and commitment but losing our own profile and reputation and finding it impossible to recruit the high-quality staff we need.
Remember, you are not alone when it comes to these issues. We are here to help – starting with a free consultation if you need our expert input. Just click the button on the screen and we’ll be in touch.
