P&O Ferries: What claims could employees bring?

P&O Ferries is facing widespread criticism after its decision to terminate the contracts of 800 members of staff with immediate effect over a Teams video call on 17 March 2022.

Reports and personal accounts state a shock announcement was made and staff were dismissed without any consultation taking place. In fact, it has been reported that P&O had several days earlier, placed security personnel in local hotels to ensure they were available to remove staff from their ferries. Moreover, third party agency workers were transported to the relevant ports on buses to replace the workforce with immediate effect.

There may be a question of jurisdiction and whether the employees are protected by UK employment law, as there can be exclusions for those who work at sea. If the employees can assert UK employment law protection, they will have several claims against P&O given the events that have taken place. What are the potential implications for P&O ferries in light of their recent actions?

1. The employees will be entitled to a statutory redundancy payment (SRP) if they have worked for P&O for over two years. The amount of the award will depend on the employee’s length of service, age and their weekly pay (although there is a cap on a week’s wage for this calculation of £544). If this is not paid, a claim for a SRP appears relatively straightforward claim.
2. They will also be entitled to notice pay. The amount will depend on what it says in their employment contracts. At the very least, they will be entitled to receive the statutory minimum amount of notice (a week for each year of service up to a maximum of 12 weeks). If the contracts are silent on notice, the employees will be entitled to receive a payment in compensation for the loss of a reasonable amount of notice.
3. They will be entitled to receive a payment of any accrued and outstanding holiday.

After this, it gets more interesting.

4. Where an employer plans to make large scale redundancies at a particular establishment (20 or more employees) within a period of 90 days, it must inform and consult on its proposal with representatives of the affected employees. A failure to comply with this obligation would enable the employees to seek a protective award of up to 90 days’ pay. Given the complete failure to inform and consult, it appears the employees will have strong grounds to argue for the full 90 days.
5. Unfair dismissal. If the employees were dismissed without a consultation taking place, then those with more than two years continuous service will have strong claims for unfair dismissal. They will be entitled to receive “just and equitable” compensation. This should compensate them for their loss of earnings and benefits until they are able to find new work. The maximum that can be recovered is a year’s gross salary or £89,493 (whichever is lower).
6. Indirect race discrimination. It has been reported that a decision has been made to use allegedly “cheaper non-British” We are unclear of the details of P&O’s decision and further information is required. However, at face value, there is a potential argument that P&O applied a provision, criterion or practice that put a British employee and other British employees at a particular disadvantage (namely, losing their jobs) when compared with others. P&O would then need to objectively justify its decision if this argument was made out. Such a claim could mean uncapped compensation for loss of earnings and compensation for the employee’s injury to feelings.

We note that settlement agreements have been offered and it has been suggested that P&O is seeking to buy its way out of complying with the obligations prescribed by law.  Such an approach is legitimate and does happen as there are no real legal restrictions on an employer acting this way and rather it is for the affected employee to seek redress through the Employment Tribunal system – or for the parties to agree to agree a compensation payment.

From what we have heard, it appears that those affected will be able to bring several claims in the Employment Tribunal, potentially of quite high value in some cases. The question will be whether the packages offered by P&O are attractive enough to avoid litigation.  For some, settlement will be the right option, but we expect to see a number of claims given the high profile of the situation and the widespread negative reaction it has caused.