The recent action by P&O Ferries to terminate around 800 of their employees with both minimal notice or consultation with unions provides a timely reminder on the requirements of UK employers needing to reorganise their workplaces. This is especially in the case of redundancy situations involving larger numbers of staff. Overview of UK Redundancy requirements Under UK employment laws, employers have a number of obligations when it comes to dealing with potential redundancy situations. For example, if employers are looking at making 20 or more staff redundant (within any 90-day timeframe), there is the need for a process of consultation with both the staff members concerned, as well as their trade union representatives. The consultation period needs to commence at least 30 days prior to the earliest redundancy taking place. Furthermore, UK employers planning to make 100 or more of their employees redundant have the obligation to commence consultation at least 45 days prior to any job ending, as well as simultaneously filing an HR1 to notify the Business Secretary. The intention of such notice is to enable relevant government departments or agencies to provide job broking/retraining services for impacted employees. The above consultation requirements exist even if the redundancy situation arises from the employer becoming insolvent or shutting down UK operations or activities permanently for other reasons.
Some learning points of interest for employers from this matter include: (1)P&O may be exempt from the UK requirements
While most UK employers would need to strictly comply with the consultation and notification requirements set out above, it appears amendments to relevant law dating back to 2018 may mean they do not face legal action in employment tribunals for breaches of UK employment laws.
This arises not from P&O being owned by Dubai based DP World, but from the situation where most displaced staff fall within the definition of seafarers, and are therefore governed by the Maritime Labour Convention rather than UK employment law.
The 2018 changes confirmed that for seafarers, the notification of potential redundancy was to be made to the competent authority of the state where the ship was registered. For all P&O vessels, this registration was offshore of the UK.
While this may provide a loop-hole for P&O in their current circumstances, our experience shows the vast majority of UK employers need to factor in consultation and any notification requirements into any plans to reorganise their workforce, particularly if redundancies are anticipated.
(2)What constitutes valid ‘consultation’.
If P&O’s situation had involved a normal UK employer, their action in sending out a video message advising 800 staff of their sacking, effective immediately, and then having staff escorted off the workplace, would constitute a clear breach of the obligation to engage in meaningful discussions prior to making any staff redundant.
Going forward
-Employers wanting to act lawfully and fairly will be wanting to build adequate and genuine consultative processes into any restructuring exercise potentially involving redundancies.
-If unions represent staff in any part of the business, they should also be specifically included into the consultative process.
-Remember to carefully document the scope and extent of the consultative process, in case it is needed as evidence at any Tribunal hearing.
-The Employment Law Specialists have extensive experience in assisting employers going into restructuring or outsourcing exercises.