P&O Ferries: what is ‘fire and rehire’?

P&O Ferries is facing widespread criticism and the prospect of legal action after it sacked 800 seafaring staff yesterday via a video call.  

The company, which Labour MP Karl Turner told LBC received £10m from the government in furlough payments during the coronavirus pandemic, is replacing the sacked employees with agency staff, leading some critics to accuse P&O of the controversial practice of “fire and rehire”.

What happened?

P&O Ferries yesterday sacked 800 staff and announced plans to replace them with agency workers. A spokesperson for the company told the Daily Mirror that the firm needed to lay off workers after it lost £100m due to disruption caused by the Covid-19 pandemic.

According to the BBC, staff were told in a video call that Thursday was their “final day of employment”. P&O said it would offer “enhanced compensation packages” to all those impacted by the cuts, but no details have been released.

Some ferry workers then refused to leave their ships in protest, before being hauled off the boats by “balaclava-clad security guards”, reported ITV.

“I am extremely concerned and frankly angry at the way workers have been treated by P&O,” said Robert Courts, parliamentary under secretary for transport. TUC General Secretary Frances O’Grady said P&O’s “secret plan” to sack staff with no notice was “reprehensible”.

Labour MP Turner said the sackings were an “utterly deplorable predatory practice taking full advantage of the gap in the legislation”. Shadow transport secretary Louise Haigh said that images circulating online of staff being marched off ships was “the action of thugs”.

‘Fire and rehire’

The Transport Salaried Staffs’ Association, an independent trade union, said that P&O Ferries has encouraged its staff to apply to the agency to continue their employment, effectively meaning they are being asked to reapply for their own jobs in what the union described as an example of “fire and rehire”.

Fire and rehire is a controversial technique in which a company sacks staff before telling them they can apply for their old jobs on less favourable terms. Weetabix, Tesco and British Gas are among the companies to have deployed the tactic in the past, according to The Guardian.

Responding to the sackings, a No. 10 spokesperson said: “We do not agree with the practice of fire and rehire and would be dismayed if this is the outcome they were seeking to achieve.”

Employment lawyer Rustom Tata, chair of legal firm DMH Stallard, told The Telegraph that those describing the P&O row as an example of “fire and rehire” are wrong, adding that staff are being sacked and replaced with agency workers, rather than being offered contracts on worse terms.

The Guardian said that “what P&O is trying to do looks slightly different” to fire and rehire, explaining: “Rather than rehiring staff to their old jobs, it is replacing them with agency workers and saying that sacked staff could, if they wanted, join those agencies.”

Nevertheless, Mark Dickinson, the general secretary of maritime trade union Nautilus International, told Radio 4’s Today programme that the sackings have “ripped the guts out of everybody” and are “clearly illegal”.

P&O Ferries said that the decision to lay-off workers was “tough” but that the business would not be viable without “making swift and significant changes now”. Critics have pointed out that its owner, the Dubai-based DP World, paid a £270m dividend to shareholders in 2020.