Bethanie Booth, Employment Solicitor at Napthens explains the importance of following the correct process when making employees redundant.
On 17th March 2022, P&O Ferries Limited (‘P&O Ferries’) made 786 of its seafarers redundant with immediate effect. The 786 seafarers were informed of their dismissal via a pre-recorded video call. By doing this, P&O Ferries Limited, broke several employment laws which apply in England and Wales.
Follow a specific and fair process
If an employee has two or more years’ service, they have the right not to be unfairly dismissed by their employer. While redundancy is one of the five potentially fair reasons for dismissal in employment law, when an employer is considering making redundancies in the workplace, the employer must follow a specific and fair process prior to making any role redundant. Even if an employer has a fair reason for making the role redundant, if an employer does not follow a fair process when making a role redundant, the dismissal will still be unfair.
Collective consultation obligation
One of the main issues with the decision of P&O Ferries to dismiss the 786 individuals as redundant was that they failed to carry out a meaningful consultation with the seafarers prior to their dismissal. Where an employer proposes to dismiss as redundant 20 or more employees within 90 days, the employer has “collective consultation obligation” meaning they must consult appropriate representatives of the employees who may be affected by the dismissals or connected measures. If the employer proposes to dismiss 100 or more employees, as they did in this case, the consultation must begin at least 45 days before the first dismissal takes place. In addition, P&O Ferries failed to comply with their obligations to file the necessary paperwork (Form HR1) with the Secretary of State. Failure to do this is a criminal offence.
P&O Ferries now faces possible fines, tribunal claims and, undoubtedly, reputational damage due to the decision to bypass employment laws. The Government has also intervened and has made suggestions of unlimited fines and possible new laws to prevent this kind of behaviour from companies in the future.
If your organisation is considering redundancies in the future, specialist advice should be sought to ensure the correct procedures are being followed as to protect the organisation against any potential fines and tribunal claims, particularly where there are collective consultation obligations. It must be noted that all employers must comply with the obligations imposed on them by employment legislation when considering redundancies and the size and/or resources of the organisation is irrelevant.
If you have any queries or in need of specific advice in relation to any employment law query, please contact a member of the Napthens Employment Team who are able to offer 30 minutes of free advice to QCS members.
