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Calculating the cost of a Zoom call – the lessons of P&O Ferries’ dismissal of 800 Seafarers

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“If you are on this call, you are part of the unlucky group that is being laid off”, uttered the then CEO of Better.com, Vishal Garg, before being launched into internet opprobrium...

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Date: 23/03/2022

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“If you are on this call, you are part of the unlucky group that is being laid off”, uttered the then CEO of Better.com, Vishal Garg, before being launched into internet opprobrium or “cancelled” in modern lingo. It was somewhat surprising therefore that, having witnessed a global backlash against Mr Garg for dismissing 900 of his staff via Zoom, P&O chose to embark upon a similarly expeditious use of Zoom consultation by announcing to 800 seafarers their dismissal with “immediate effect”.

Adopting the approach of US Intelligence when assessing the actions of Vladamir Putin (in other words assuming there is a rational actor here), what can possibly have led a long standing reputable UK company to ride roughshod over UK employment rights.

First, let’s assume P&O is a UK employer dismissing UK employees, the obligations would be as follows:

  • complete an HR1 form notifying the government of the potential redundancies;
  • (where there are more than 20 employees at risk of dismissal at each establishment i.e. each ship) to consult with the elected representatives or trade unions about avoiding the need for redundancies and/or mitigating the impact of redundancies on the employees;
  • (where the number of potential redundancies is above 100) to continue to consult for the minimum period of 45 days; and,
  • To adhere to the minimum statutory notice period of one week per year of service up to a maximum of 12 weeks.

P&O Ferries would undoubtedly have been aware of these minimum obligations arising under UK and EU law and the potential risks of not following them, namely:

  • Potential criminal liability for its directors for any failure to file an HR1;
  • 13 week’s payroll as a protective award for its failure to consult employees for the appropriate period; and,
  • a basic award of anything up to £16,320 (depending upon age and service) and a compensatory award of up to £89,493 in respect of unfair dismissal claims.

Importantly, however, in P&O’s case this routine process is capable of being circumvented via three possible routes:

  • The special circumstances defence – P&O claims to have been at imminent risk of going out of business due to the ongoing losses it was suffering following the pandemic and as a result of rising fuel costs. If it can rely on this defence it could avoid the need to consult with employees. However, there does not appear to be adequate grounds for this defence here given that the seafarers have been replaced and the business is set to continue.
  • The Maritime Labour Convention (MLC)assuming the conditions of the MLC apply to P&O seafarers then their rights will depend on the vessel’s country of origin and the jurisdiction specified in their contracts. Although P&O Ferries is a UK company, assuming its ships carry foreign flags then its seafarers could well be subject to the employment laws in a foreign jurisdiction and/or be protected primarily by collective agreements in place between P&O and the recognised trade unions.
  • Buy-out – P&O claims to have offered its seafarers enhanced redundancy terms. According to the Transport Secretary, these payments are generous and equate to a lump sum of six months’ pay, plus 2.5 weeks’ pay per year of service. This payment is tax free up to £30,000. In all likelihood it will be subject to the seafarer entering into a non-disclosure agreement and possibly also waiving their employment claims. It is not uncommon for employers to seek to abbreviate a process in return for asking employees to waive their rights.

In all likelihood, P&O was banking on the generosity of its severance package and the potential loopholes above to provide it with protection from future claims. Its miscalculation has been the brusque, peremptory and dehumanising use of a pre-recorded Zoom call to terminate staff without notice or any consultation. The long-standing reputational damage and the potential loss of lucrative contracts are bound to resonate with any (if there are any) employers contemplating such a course in future.

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