UK paid £50m in P&O aid and contracts but 800 sacked staff may have no British legal rights

An analysis of has revealed that P&O Ferries received £38.3m in UK government contracts since December 2018.

They include a £3.6m deal in 2020 to provide transport services between the key Scotland to Northern Ireland route – Cairnryan to Larne.

Labour has called for the government to suspend its contracts with P&O Ferries and its Dubai-based owners DP World over the sacking of its workers, until the situation is resolved.

The ferry company has also received more than £15 million in public subsidies in a year to support jobs and services during the pandemic and there are calls for them to be refunded.

Yesterday, P&O Ferries staff staged protests after the firm sacked 800 employees on Thursday ithout giving them any notice.

Nearly a quarter of P&O Ferries' staff were told via a video message on Thursday that it was their "final day of employment".

P&O say that the sacked staff were Jersey-contracted seafarers, raising questions over whether the 800 have legal employment rights in the UK.

Last night it was not clear whether the Jersey government were taking any action over the sacked staff - even though workers are still legally entitled to have a consultation period over redundancy there. Officials say the employment rights normally only exist for people who are ordinarily living on Jersey.

It is understood there is now an examination over whether the employment rights of the maritime staff relate to where they are contracted or their place or residence.

Chris Deeley, a solicitor in the employment team at JMW Solicitors said that while P&O may be intending to apply Jersey law to the redundancies, they may still benefit from UK protections.

“I imagine there may be a choice of law clause that identifies Jersey in those employees’ contracts, in an attempt by P&O to disapply English law," he said.

“However, having a choice of law clause pointing to Jersey does not automatically mean that employees will not benefit from English employment rights. Employment Tribunals will look at the whole circumstances of a person’s employment, and weigh up relevant factors, to decide whether there is a sufficiently strong connection with the UK.

“For example, if an employee lived in England and was based out of an English port, those factors might lean more towards UK employment law applying, even though their contract said only Jersey law applied. This is especially so if that clause was part of P&O’s standard template contract, rather than something that was specifically negotiated.

“These issues are assessed on a case-by-case basis, so it is difficult to say with any certainty what law will apply. There will, therefore, always be a risk to P&O of an employee deciding to fight the issue in a tribunal.”

The UK government says it is looking "very closely" at the action P&O Ferries has taken to see if they broke any laws after it fired its employees, planning to replace them with cheaper agency staff.

P&O has told staff in a letter to keep quiet about its plan to cut 800 staff and replace them with agency workers.

The chief executive of P&O Ferries Peter Hebblethwaite defended the cuts saying that without the changes which will cut crewing costs by 50%, there was "no future" for P&O Ferries.

P&O say they are compensating all 800 Jersey-contracted staff for lack of notice with enhanced severance packages.

"They are being offered support and being encouraged to access our employee assistance programme if they feel they need it, either now or in the coming days. As part of their package, they are also being offered careers advice and support," said Mr Hebblethwaite in his letter to staff.

On Thursday it emerged that P&O had suspended services for between seven and 10 days on Cairnryan to Larne, Dover to Calais, Dublin to Liverpool and Hull to Rotterdam.

Boris Johnson’s official spokesperson had confirmed that senior officials at the Department for Transport had first been informed about the firm’s plan on Wednesday evening but had kept the information within a small group, because of concerns about commercial sensitivity.

The spokesperson said ministers were investigating whether P&O Ferries broke the law, describing the firm’s behaviour as “extreme”.

“We expect companies to treat their employees fairly. It is only in extreme circumstances that employers need to make extreme decisions to secure the future of their businesses if all other avenues have failed, including negotiations between employer and employees.

“We don’t believe this was the case for P&O staff,” he said, adding: “We are looking into this very carefully.”

Labour has said that public procurement and taxpayers' money, should be used to promote good working practices and decent conditions. The party has pledged that in government it will strengthen these requirements in procurement law.

It has also called for the removal of DP World from the UK Government’s Transport Advisory Group, the outlawing of fire and rehire and a ban on other forms of exploitative practices such as zero hour contracts.

Mr Starmer said: “P&O’s actions are aggressive and immoral.

“If one company can divest itself of responsibility for its workforce, and the government don’t blink, others have room to do the same.

"We are demanding the Prime Minister grants access to the legal advice the DfT received on whether P&O Ferry’s actions constitute a breach of the law, and whether there are legal levers to get the decision reversed.

"Full transparency is vital to prevent anyone else from being subjected to this appalling behaviour. Any government contracts they have should be suspended until this is resolved."

Both the RMT union and Nautilus have been seeking legal advice on the dismissals conducted on a video conference with no notice in a move to replace existing workers with cheaper agency staff.

Seafarers union Nautilus International say they and the RMT union had said they were “actively progressing” their legal response to the “clearly illegal” move.

Employment lawyers had warned P&O may have broken several laws.

In the UK, when 100 or more employees are proposed to be made dismissed, a 45-day consultation has to take place and collective redundancy rules apply and the business secretary has to be notified.

But P&O has confirmed that all the staff are Jersey-contracted - and some union officials believe they were easier to fire as they were part of an "offshore employment model".

Experts say employing crew in places like Jersey, Guernsey and Singapore is common across the ferry industry and by doing this there are fewer protections for employees.

The 800 staff are understood to have been contracted through some or all of P&O's five Jersey companies - P&O Ferries (Jersey) Limited, P&O European Ferries (Jersey) Limited, P&O Irish Sea (Jersey) Limited, P&O North Sea (Jersey) Limited, and P&O Ship Management (Jersey) Limited.

It was through Jersey-registered P&O Ferries, P&O North Sea and P&O Irish Sea that seafarers’ union Nautilus negotiated a new pay deal for employees in December 2021.

Leader of Northern Ireland’s Traditional Unionist Voice Party, Jim Allister said: “It appears P&O sought to circumvent our employment laws by having their employee contracts rooted in Jersey.

“Going forward, this loophole must be closed by effective legislation. Never again must employees be the victims of such brutal treatment and exploitation.”

One legal expert said that while rules regarding employee consultation and trade unions are broadly similar in Jersey to those in the UK, there is one key exception.

Where UK-based employers are obliged under the Information and Consultation of Employees Regulations to consult with trade unions or other staff groups on key issues that affect them, Jersey employers are under no obligation to consult with employees on any business or employment matter.

There are rights over collective redundancies - but government officials say they are directed at Jersey residents.

In Jersey, where 12 or more employees are likely to be made redundant at one establishment within a period of 30 days or less there is a legal requirement to consult with representatives prior to initiating any individual consultation.

The consultation must begin at least 30 days before the first of the dismissals takes place.

There is also a legal requirement to give advance notice to the Jersey Social Security Minister before any notice is given to employees and/or at least 30 days before the first dismissal takes place.

Employers who fail to consult properly may face a claim for additional compensation, called a protective award. The claim for such an award, which could be up to an additional nine weeks' pay to each affected employee.

Social justice law firm Thompsons, solicitors which is acting for the RMT has said the actions of P&O were unlawful under UK legislation and that they were considering all options including employment tribunal claims and High Court proceedings.

Neil Todd, the trade union lawyer working on this at Thompsons said it was their view that the employees’ rights would fall under UK employment law, not Jersey.

He said:“P&O’s sudden decision to fire all 800 UK staff – via a pre-recorded video call and without a single shred of consultation - is a shocking disregard of the most basic employment law.

“The law states that if you’re dismissing more than 20 employees, you must consult with them. Aside from the legal requirement for due process to be followed, it’s simple common decency to communicate openly, honestly and in good time with your employees, many of whom will have worked loyally for the company for years.

“To blame Covid-10 for these sackings, when P&O took furlough payments and is part of a hugely profitable group of companies, is beyond cynical.

“This is a shocking example of a major British employer acting in a wholly atrocious manner - attempting to bypass unions, sack hardworking employees and instead hire staff from agencies who will be underpaid and un-unionised. This is hardly the post-Brexit Britain that the Conservatives promised.

“In our view what they did was unlawful and we are considering all options including employment tribunal claims and High Court proceedings.”

And Holly Cudbill, an employment lawyer from Blake Morgan, said that P&O Ferries' actions "were almost certainly illegal".

Although its boats sail around the world, she believes the firm's employees are covered by UK law.