P&O boss admits firings were unlawful under UK legislation

With calls for his resignation following ‘shocking disregard’ for employment rights, People Management looks at what the revelation means for other businesses

Employers have been urged not to follow P&O Ferries’ employee relations playbook after the firm's boss admitted its decision to fire 800 workers without consultation was unlawful.

Peter Hebblethwaite, CEO of P&O Ferries, whose organisation made the employees redundant with immediate effect over a video call last week, told MPs yesterday (24 March) 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.

Hebblethwaite also said he would make the same decision again if he had to.

Commenting on yesterday's statement, Ben Wilmott, head of public policy at the CIPD, said the situation showed a “shocking disregard” for the employment rights of the firm’s workforce. 

“Such action has a damaging impact on employees and their families’ wellbeing, and badly undermines trust between business and the public,” he warned. “It’s by not only observing the law but by going beyond it, and treating people with respect and humanity that organisations will engender loyalty, engagement and performance.”

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Martin Williams, head of employment at Mayo Wynne Baxter, advised that firms planning 20 or more redundancies needed to complete Form HR1 to avoid the possibility of criminal sanctions.

“It is a relatively simple step and, on the face of it, nothing more than an information-gathering exercise,” he explained. He added that the form could be found online and, if the government requires further details upon receipt of Form HR1, it would contact the employer.

The ongoing situation with P&O is also unique, said Paul Holcroft, managing director of Croner, who warned observers not to follow a similar playbook.

“P&O may be able to avoid tribunal claims due to jurisdictional requirements – namely that it does not fall within the remit of UK employment law and instead is subject to unique maritime laws – [but] the same principles will not apply to UK-based organisations,” he said. 

Holcroft advised that, along with completing Form HR1, employers also needed to remember to apply minimum periods of consultation and organise the election of employee representatives.

“UK employers should not see P&O’s process as one to copy; doing so would likely lead to successful claims of unfair dismissal and protective awards, not to mention serious reputational damage,” he added. 

Holcoft also noted that while some people would be “appreciative” of Hebblethwaite’s admission of error yesterday, P&O still had a long way to go to mend the company’s reputation.

“Having a CEO take full responsibility and apologising for the company’s actions is a key first step when it comes to rebuilding any brand image,” he said, suggesting the organisation may also wish to consider its wider approaches to employee relations and look at how it can enhance its ESG strategies.

“By making fundamental and effective changes, they may be able to gradually repair their image,” said Holcroft.

Last Thursday (17 March), P&O staff were informed on a Zoom call that it was their final day of employment with immediate effect, with no prior warning given. The call lasted a few minutes and ended with the staff being made redundant. 

Since the news broke, transport secretary Grant Shapps has said the government would stop companies firing staff on the spot, after P&O Ferries “exploited a loophole” in current laws. He has also called for Hebblethwaite to step down, as has the Rail, Maritime and Transport union (RMT). 

Meanwhile, Wilmott called for the government to take urgent steps not just to address legal loopholes, but to bolster enforcement.

“There is a need to significantly improve the enforcement of employment rights in the UK and ensure the new single enforcement body has the necessary resources to take proactive and effective enforcement action when it is established,” he said.