What sanctions could P&O Ferries face for sacking 800 workers without notice?

The kind of sanctions P&O Ferries could face for sacking 800 workers without notice is still unclear, lawyers and trade unions have said.

Criminal and civil investigations have been launched by the Insolvency Service into the circumstances surrounding P&O’s decision to make the seafarers redundant on March 17.

A legal duty for P&O to hold consultations on the redundancies and whether the firm gave the Secretary of State due notice about its plans are among the areas that could be investigated.

The Insolvency Service said that “as these are ongoing investigations, no further comment or information can be provided at this time”.

No one knows what sort of fine or the scale of the sanction the firm could face but what is clear is the company is “banged to rights” on its failure to consult, according to the TUC.

P&O Ferries chief executive Peter Hebblethwaite told a joint hearing of the Commons’ business and transport committees that his company broke the law by not consulting with trade unions before sacking workers.

He has also said that all vessels involved were registered outside the UK and the relevant authorities in each case had been notified.

Employment lawyer Anita North, of Simpson Millar, said: “They could be investigated for not notifying the Secretary of State about the fact they were going to make the redundancies but there are provisions in the legislation which say that the requirement depends on what the obligations are of the port in the country that the ship is registered.

“Since these ships are registered outside of Britain, the obligation therefore falls with the jurisdiction of where they were registered.”

On whether directors could be held liable, she said: “It is not clear there has been any wrongdoing or any financial dishonesty.

“There is no suggestion of actual director dishonesty to give grounds for a criminal investigation. It is immoral I think, but ultimately there are no laws to say you cannot dismiss your employees without notice.

“There are laws to say you should consult before you do that and if you don’t employees can claim a protective award but there are no sanctions as such that can be taken against individuals.”

The TUC said it sees the dismissal of the 800 seafarers as an attempt by P&O Ferries to “bypass” employment laws as bosses have “sought to impose the changes rather than negotiate them”.

The union organisation said the plan was to replace seafarers on union-negotiated wages with low-paid agency staff thanks to gaping holes in the minimum wage rules as they apply to overseas workers on non-UK flagged vessels.

P&O may be investigated for failing to notify the Government in time but it is difficult to find previous examples of employers who have been hit with a punitive fine, Ms North and the TUC said.

Companies can also face having to pay affected workers maximum protective awards of 90 days’ pay.

It is possible that P&O may have simply priced in the potential cost of such an award in its offer to dismissed seafarers, the TUC suggested.

Ms North added: “I think it is part of a director’s duties to think about the financial viability of the company and do everything it can to ensure it does not go under but that should not just be from a personal point of view – there should be more consideration of how the decision being taken by the board affects the employees and not just the balance sheet.”