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Since last week, P&O Ferries has been all over the headlines for seemingly all the wrong reasons. Their mass sacking of 800 staff without following the correct procedure of going through a proper consultation period, with the intention of hiring cheaper, non-UK workers instead, was met with outrage at the blatant breach of UK law. Yet they seem set to get away with it, as government ministers and newspapers condemn the actions while simultaneously acknowledging that it seems there is little they can do. In return, the ferry company has substantially reduced its operating costs in a matter of days, potentially saving the business many thousands of pounds.
This is not luck.
Thorough and detailed legal advice would have been sought, and a quick and comparatively cheap solution provided. This solution drew on the fact that substantial parts of the company operated in international waters or were registered overseas, minimising the influence of UK employment laws. The suddenness of the move also meant that no union action could take place to delay or draw out the process, again keeping costs down. The settlement packages offered to the employees have also proved effective, as they are reasonably generous, and the vast majority of the workers have accepted them, seeing settling as preferable to a protracted legal challenge which could leave them with nothing.
This style of approach clearly has potential advantages for companies needing to cut costs quickly, but it is undoubtedly also a high-stakes gamble. One which P&O Ferries may yet lose.
Public relations and brand image form a significant part of the worth of a company. They have a value, albeit one that is hard to quantify, and they contribute significantly to the success and failure of a company.
The public outcry against P&O Ferries has been huge, and while the company’s move has increased their money-making potential in the short term, they may well have paid for this in the long-term by sacrificing their public image. Only time will tell.
P&O Ferries may have flown too close to the sun with their dismissals. However, it is possible that had this been done on a smaller scale and attracted less public attention, it may well have flown completely under the radar, leaving the company’s brand unscathed and with a healthier bottom line.
The brazenness of their move has rightly prompted calls for a review of employment laws. As we have seen, this area is already a potential minefield for employers and employees alike, and may well change soon in light of recent events. Expert and up-to-date legal advice is therefore crucial for knowing your rights and making sound business decisions.
