P&O sackings could be a criminal offence with an unlimited fine, says LBC's Daniel Barnett

19 March 2022, 19:16 | Updated: 19 March 2022, 21:17

Daniel Barnett

By Daniel Barnett

The sacking of 800 staff by P&O Ferries could constitute a criminal offence with an unlimited fine, LBC's Daniel Barnett reveals.

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On Thursday, P&O Ferries sacked all 800 of its on-board staff, via a recorded video, with no notice. The company intends to replace them with cheaper agency workers.

There is a little known law that says employers are obliged to notify the Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng) where they are proposing to dismiss as redundant 20 or more employees.

They've got to give 45 days' notice to the government, under section 193 of TULR(C)A 1992, and that's how we normally hear on the news that this company or that company is planning to make 100 jobs redundant - it's because the employer is meant to tell the Department for Business, Energy and Industrial Strategy (BEIS) at least 45 days in advance.

It's a criminal offence not to tell BEIS. So this isn't a question of a breach of civil rights, for which ex-P&O employees can bring a compensation claim. This is a criminal offence, punishable in the criminal courts and carrying a potential criminal record.

There was a prosecution under this law, in 2015, when the directors of CityLink were charged with not telling BEIS about proposed redundancies in advance of putting CityLink into administration. But the directors were acquitted by the magistrates because the court decided they had NOT proposed to make redundancies when they placed the company into administration, as they had every hope of saving the company at that point.

In November 2021, a court held that an administrator of Sports Direct could be prosecuted for failing to notify the government of proposed redundancies, even though the administrator was not an employee or director of the company. The case is awaiting trial in the Magistrates’ Court.

Read more: P&O crew member recalls being woken up after night shift to 'bombshell' firing video

It's not just P&O that is liable. The directors of P&O, and also senior managers involved in the decision, can be prosecuted. The offence does not carry a prison sentence, but it does carry an unlimited fine.

So why have the directors of P&O done this, and risked personal liability for an unlimited fine? I'm speculating, but I think it's a combination of two reasons. First, they're gambling that since a successful prosecution has never been brought in the past, it's not going to happen now. On that, I fear they may have misjudged public sentiment.

Second, the chances are they've either received an indemnity from the company, meaning the company will cover any fines they're ordered to pay, or they have D&O (Directors' & Officers') insurance, which is an insurance policy that covers them for this sort of thing.

If I was Kwasi Kwarteng, I'd be reading section 194 of TULRCA - that's the offence of failing to notify in a redundancy situation - very carefully right now.

Read more: 'Shoddy and appalling': Minister blasts P&O's mass sacking but admits Govt is 'powerless'