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What now for P&O? Sink or swim?

April 14, 2022
Employment Law

Given the column inches devoted to it, we couldn't help but comment on the P&O situation which has blown up in the last few weeks.

Separating fact from fiction

After getting over the initial shock of a well-known business summarily dismissing almost 800 employees in a single day, many have been surprised by the extent to which employment lawyer have struggled to work out whether what P&O has done is actually against the law.

Initially, many were speculating as to whether P&O’s seafaring employees might not be covered by English law. After all, the vessels on which they worked are registered in Bermuda, Cyprus and the Bahamas. This foreign registration arrangement appears to have allowed P&O to side-step at least some of their legal obligations. However, broadly speaking, P&O have openly accepted that English law applied to their staff and laws relating to collective consultation (and presumably unfair dismissal) were broken when they were dismissed.

So what is their ‘defence’ to all of this?  Well, effectively, it is threefold: 

  1. If they hadn’t done it, the business would have gone under;
  2. Consultation with staff and unions would have been pointless; and
  3. The termination packages now on offer to staff are very generous.

We make no moral judgement about what P&O have done. However, to give some context to all of this, it is worth observing that their actions, albeit on an industrial scale, are the actions that many employers will have taken from time to time. Every now and then, commercial enterprises will conclude that it is a price worth paying to ignore the law and simply settle the prospective legal claims with a generous payoff. It is not pretty; it is a fairly blunt tool. But it can be very effective.

So what now?

At the time of writing, reports suggest that all but one of the P&O employees have accepted (or are in the process of accepting) the termination packages on offer to them. This is entirely logical. After all, the prospect of ‘having your day in court’ may initially sound attractive.  Yet if the packages are even remotely close to the maximum compensation employees could hope to achieve in an Employment Tribunal, who could realistically afford to turn them down?  P&O’s calculated gamble may appear to be paying off.

A sting in the tail?

Or have we spoken too soon? What P&O management may not have accounted for is quite the level of public anger - and consequent political pressure - to which this case has given rise. Whilst claims from all the staff may soon be settled, recent reports suggest the Insolvency Service may be considering its own civil and criminal proceedings against the company (and possibly its directors). We also have to allow for the prospect that it could yet be the ‘court of public opinion’ which will ultimately act as judge and jury in this case. Will customers take their business elsewhere, rather than being seen to support an organisation prepared to treat its staff in this way? Or will memories quickly fade and sympathies for the workers wane as soon as the story drops out of the headlines?  We will watch with interest.

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