Fire and rehire: did P&O Ferries break employment law by sacking staff and hiring agency workers?

Transport company P&O Ferries has been accused of making use of fire and rehire practices after sacking 800 workers and replacing them with cheaper agency staff.

There was widespread condemnation at the move by the company, with politicians speaking out against bosses immediately sacking the staff via a Zoom call.

Labour were quick to call out the fire and rehire practices that have not yet been made illegal, however Boris Johnson caused confusion after claiming that P&O Ferries could have broken employment law.

But what exactly does ‘fire and rehire’ mean - and have P&O Ferries broken employment law by sacking 800 British seafarers?

What does fire and rehire mean?

‘Fire and rehire’ is a term used to describe when a company fires an employee and rehires either them or another candidate for the job under new conditions.

These new conditions may include a change of working hours and/or rate of pay, among others.

It is often taken advantage of when an employee and employer cannot agree to vary the terms of their existing contract.

Is fire and rehire illegal?

Currently, the practice is not illegal.

However, the company choosing to adopt the practice must conform with appropriate redundancy and dismissal practice.

This includes a redundancy consultation if it involves a group of individuals.

If they break from this, the employing company could be in breach of UK employment law.

Has P&O Ferries broken employment law?

Many have spoken out against P&O’s decision to sack their staff and replace them with much cheaper, third-party agency staff however, as fire and rehire is currently not illegal, action cannot come against them for the use of the practice.

Speaking in the House of Commons during PMQs, Boris Johnson caused confusion after telling MPs: “Under section 194 of the trades union and labour relations act (1992), it looks to me as though the company concerned has broken the law.

“And we will be taking action therefore, and we will be encouraging workers themselves to take action under the 1996 employment rights act.”

Section 194 of the Trades Union and Labour Relations Act (1992) states that companies are to notify the Secretary of State before more than 100 members of staff are sacked.

However, the Department for Transport confirmed that this was now out-of-date and that businesses no longer have to tell the UK Government - in P&O Ferries case, they must instead inform the government of the country in which their boats are registered.

Therefore, sacked staff will not be able to bring action against P&O Ferries on this count.

However, the company may have broken employment law in not giving the former employees a suitable redundancy consultation period.

Staff told of how they were informed via video call that their employment was to finish at the end of day, with no prior knowledge of the planned redundancies.

Speaking to the BBC, employment lawyer Tim Tyndall said: “The P&O employees are covered by UK employment law as P&O crew members worked out of Liverpool, Dover and Hull.

“The fact that P&O are offering settlement agreements suggests that they are aware of this and hope to avoid unfair dismissal and other claims by financial incentive.”

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