P&O Ferries: A case study for responsible leadership

Increasingly, what defines a company is not corporate success or the awards emblazoned at the end of emails, but corporate responsibility: doing what’s right, even when you don’t want to, or don’t have to. In the case of P&O Ferries, we look at how a lack of empathy towards its employees and irresponsible behaviour has heavily damaged its reputation.
In the UK, employment law only gives employees a right to claim unfair dismissal after two years’ service. But is it OK not to follow best practice with those who haven’t been there two years, on the understanding that even if it is unfair dismissal, they won’t have the right to a claim? Similarly, does it matter if the reason given for dismissal isn’t fair either?

There are 5 fair reasons for dismissal, redundancy being one of them.

Redundancy was a reason put forward by P&O Ferries. Of course, these weren’t genuine redundancies. By their own admission, they replaced the employees with a cheaper workforce. They also admitted to breaching process, which by itself gives an employee the right to claim unfair dismissal, since without a fair process, how would you know that the employee would still be terminated at the end of it?

In the case of P&O Ferries, it wasn’t so much that they didn’t think about breaking employment law – they took the view that offering compensation would likely negate the point of an ex-employee issuing a claim, since awards at the Employment Tribunal are generally lower than people think.

What they seemingly failed to consider was their reputation. Amazing as it sounds, the PR consultant was clearly not consulted beforehand.

They knowingly bypassed fair process in the full knowledge they would incur backlash from unions, employees and the media, not to mention that, in collective redundancies of 20 or more employees, employers have an obligation to report to the Secretary of State, hence the intervention from Transport Secretary Grant Shapps. (Read here)

Did they know all along that there would be a backlash and just not care?

It seems unlikely, but the throwaway attitude of the CEO Peter Hebblethwaite illustrates a complete lack of empathy towards their employees.

Corporate responsibility means being a responsible employer.

SMEs are good at this and are more socially responsible towards their employees and watchful of their customers. Whilst it is useful to be able to hire and fire freely within the first two years, and this is an important cornerstone of UK business culture, something that offers employers the flexibility to find the best candidates for the job, what companies need to remember is that, without the best candidates for the job, the company is the one that will suffer. And who wants to be an employee at P&O Ferries now?

Philippa Wood

Philippa Wood is a solicitor with many years’ experience advising on all areas of contentious and non-contentious employment law. Her clients include individuals and companies of all sizes from entrepreneurs to global brands.
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