What P&O did wrong
There’s one employment law story dominating the headlines this week, and it’s P&O’s decision to sack 800 staff with zero notice.
And in case you’re wondering what P&O did wrong, it’s NOT the fact that they made a business decision that they needed to let all of those staff members go – P&O have likely struggled as much as anyone during the last two years, and it’s no surprise they’re having to turn to redundancy to keep going.
So what’s the problem?
Simple, a complete failure to follow a proper process – they seem to have just told everyone, with no warning, “You are redundant”.
A lot of the businesses we speak to feel that this is the “best way” to deal with a situation like this, akin to “ripping the plaster off”, as if getting it done quickly is best for all parties.
It might be best for THEM, in the short term, but it’s quite clearly NOT best for the employees, who have zero time to adjust to the new reality and suddenly lose their livelihood in one fell swoop.
And in case you’re wondering, employment law is firmly on the side of the employees in this.
P&O are saying that they will pay any fines due as a result of this decision. But I’m willing to wager that whoever’s advising them hasn’t properly factored in all the potential costs of this approach:
COST #1 – Unlimited. If you make more than 20 employees redundant, you have to inform the government. They did not do that.
COST #2 – As near as unlimited as it can be.
Every employee is due notice, outstanding holiday pay and the statutory redundancy pay. As the P&O employees are unionised, the amounts due to them will be more than the statutory amounts. And they will be due, for all 800 employees, in the next 3 months.
COST #3 – Are they not bankrupt yet?!
Every employee has the right to sue the company for unfair dismissal as the process has not been followed. They have the possibility of being awarded one year’s pay plus a 25% uplift for P&O not following procedure. EVERY SINGLE EMPLOYEE.
COST #4 – Legal fees to fight the tribunals. (That said, they would not be able to win, so probably best not to waste money on this – let’s see whether they do!)
COST #5 – Settlement agreements with all the employees to avoid Cost 3.
However, this is likely to be a similar amount to each person to get them to give up their right to sue them.
P&O have said that it will be cheaper for them to sack all their current employees and take on agency staff.
That is probably true for day to day operations, particularly if they had high levels of sickness absence, poor performance, petty pilfering, etc. But once they factor in the cost of paying off 800 staff, it will be a good few years before there is any profit on the balance sheet.
Unless you have the spare millions of pounds that P&O will have to pay for the luxury of doing the wrong redundancy process, please call us and check before you start!
Find out how to avoid all those costs, visit our redundancy centre https://www.gaphr.co.uk/redundancy/