Yesterday P&O Ferries took the decision to dismiss 800 members of their staff. While large scale dismissals may have been fairly common due to the pandemic the key difference here is that this decision came seemingly out of the blue.
For those with two years’ service they risk a deluge of unfair dismissal claims along with claims for a failure to inform and consult.
Where an employer proposes to dismiss 20 or more people it must notify the secretary of state, via an HR1 form, as well as carrying out a minimum consultation period (20 to 99 people, 30 days; 100 or more, 45 days).
It is likely that the vast majority of P&O’s now former employees will have strong grounds to bring unfair dismissal claims on this basis. Of course, not all 800 employees will have more than two years’ service and unfortunately for them, the protection afforded is slightly more limited. However, for those with sufficient service, a claim of unfair dismissal could see them be made an award in an Employment Tribunal of up to one years’ salary (currently capped at £89,493). The statutory award is akin to a redundancy payment and provided that these are made to the employees is unlikely to be relevant here.
Notably, an employee raising an unfair dismissal claim has an obligation to mitigate their losses – that is to say they need to look for alternative work and demonstrate this to the Tribunal. A failure to demonstrate that you have tried to mitigate your losses can see a notable reduction in any award made by a Tribunal. Of course, if an employee successfully mitigates their losses this will also see a reduction in the compensatory award which is largely based on loss-of-earnings.
Notwithstanding the unfair dismissal argument there is also a clear failure to inform and consult here. As well as setting out the notification obligation above, The Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) also provides for Protective Awards to be made where an employer fails to properly inform and consult in a collective consultation period. This is a wholly punitive measure on the employer for reneging on its obligations and can see up to 90 days’ gross pay awarded to each employee. Notably, protective awards do not carry the same two years’ service eligibility requirement as unfair dismissal
From a practical perspective any enhanced offer made by P&O will need to be considerable given that (while they are very rare) this seems likely a fairly straightforward claim. Further, such a flagrant disregard for employment law is likely to attract a very dim view from employment law practitioners, UK government and the judiciary alike.
It will be interesting to see what happens next as we have undoubtedly not heard the end of the backlash from this decision with some engaging in sit ins and mass protests. Undoubtedly, if P&O want to avoid significant Employment Tribunals claims they will need to get their chequebook out. Further than this, however, it seems likely that this will have a hugely negative impact on public opinion of the company and may see them land themselves in further trouble going forward.
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