Resign or consult? Participatory governance, P&O and lessons to be learned
The recent fiasco with P&O Ferries and their lack of employee consultation leading up to mass redundancies is a timely reminder that you can’t skirt the law. However, not all consultations are equal.
Employees are entitled to a consultation with their employer if 20 or more redundancies are being made – typically via a trade union or employee representative. The minimum period of consultation varies from 30 to 45 days, depending on how many jobs are at risk. Anything less could be deemed as unfair and ripe for legal remedy.
Were consultations of this sort true public consultations, they would of course be subject to the common law consultation requirements, and we fear many might not pass muster. In the case of P&O, were it under the usual rules we are familiar with, it would certainly be a clear cut Gunning 1 pre-determination case. These rules might not apply to employment consultations, but employers might be advised to pay at least passing attention to the principles- working with employees could find ways to save jobs and better understand how to plan for the future.
Redundancy notices are issued once the consultation is complete and the only real obligation in terms of the process is for employers to provide information concerning the matter, such as the reasons for redundancies. More creative consultations might try and agree actions or set the selection criteria used to determine who is at risk (similar to the process of pre-consultation option appraisal).
The bottom line is that if employers do not hold genuine and meaningful consultation before making redundancies, employees could claim to an employment tribunal for unfair dismissal. In other words, consultation must still be meaningful.
Quite how meaningful consultation can occur under the pressure of collapse, with closed minds triggered by a decision of last resort is a big problem. The absence of a precedent for conscientious consideration and reporting on the output & outcome compounds this.
In the case of P&O we might have been empathetic if they decided not to consult as a decision had already been taken – or even if they felt employee consultation was a sham. This may have been the optimum answer. The urgency of change is a poor excuse – particularly if this could have been anticipated.
Fundamentally we need to reform employee consultations and raise standards. We see no reason why the full set of Gunning principles should not apply. For this to happen, the regulations must be strengthened and employers must realise the same benefits that public bodies enjoy, upskilling mangers in good practice.
Good employers are starting down the path of participatory governance. And there are many opportunities to consult. For example, employers have a duty to consult their people on health and safety. For now, we have just one piece of advice for struggling employers – don’t throw rigour overboard when the ship is sinking.