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Sacked by Zoom – is it legal and what is the right way?

Anthony Purvis - Partner, Waterfront Law

Last year P&O Ferries made headlines when they dismissed 800 of their staff on a Zoom call.  Companies make redundancies all the time but what caused outrage was the method used by P&O; a video call to read out the pre-determined outcome, without any warning or consultation first.  In November 2022, employees of learnt of their fate in the same way.

Is dismissing an employee via Zoom legal?
From a legal perspective, there’s nothing wrong with using Zoom or any other platform in this context.  Although this method can certainly make headlines, it’s the dismissal without warning which creates legal issues, as discussed below.

The law does not prescribe how employees should be notified of their redundancies and in fact technology of this kind can be helpful in a number of ways.

Now that so many of us are working from home, some employees might prefer to have the relevant conversations with their managers remotely, rather than spending time and money commuting to the office if they have no other reason to attend that day.  This can be particularly so for those who are on maternity or family leave, where arranging childcare to cover both travelling and meeting time might be difficult and unnecessary.

It can also make sense to conduct any initial “all hands” meeting by video call to ensure that everyone learns of the proposed changes at the same time.  However, in workplaces where working from home is not viable, such as in warehouses or factories, gathering everyone together for an announcement is often the best option.  Whatever the method used, there are often a handful of people who are unable to attend due to sickness or leave and they will need to be updated as soon as possible.

Despite the technology available, many employers are concerned about being seen to be hiding behind a video camera and feel that the news of possible redundancies should be delivered face-to-face.  This is a valid point but it should also be remembered that the initial meeting to place staff “at risk” of redundancy is usually quite short, lasting no more than 10 minutes.  Everyone is then allowed a few days to digest the news before the more important consultation process starts in earnest, so it’s arguably more crucial for the subsequent meetings to be in person.

A related practical point that arises frequently is how to schedule the meeting and who should attend.

Employees sometimes complain of feeling blind-sided when they attend a meeting billed as a “catch up”, “update” or similar, only to be told that they could lose their job.  In the case of P&O Ferries an email labelled “employee update” was sent and it set out that an “important company announcement was going to be made”.

For employers though, it’s unlikely to be appropriate to trail the message by inviting staff to a “proposed restructure” or “possible redundancies” meeting.  It could cause unnecessary distress when it’s important for those affected to hear the proposal in full and the reasons behind it at the same time.

And who should hold the meeting?  Usually, it’s someone senior with the authority to explain the reasons for the possible changes.  Too junior and the management could face criticism for shirking the responsibility of delivering bad news.  It’s also typical for someone from HR to attend in an advisory or observing capacity.  Indeed, there are many workplaces where it is widely known that any meeting scheduled with HR is bound to be cause for concern.

In most cases, the news will be unwelcomed, no matter how it is delivered.  It’s easy to imagine a situation where an employee feels aggrieved at being informed via Zoom but their colleague is put out by being asked to come into the office for it.  To mitigate the impact, it’s more important to think carefully about the words used and to focus on ensuring a meaningful consultation process is followed, whilst considering how you can support those who do move on.

Is dismissing without warning unlawful?
The simple answer, in most situations, is that making someone redundant without warning will be unlawful.

Where an employee has at least two years’ continuous service they have the protection from unfair dismissal which means that they have the right to be placed at risk of redundancy and then consulted about their employer’s plans and the alternatives available before the termination of their employment is finalised.

If the business is proposing to dismiss 20 or more employees, then there are likely to be additional obligations to consult with representatives of the affected group, as well as minimum timescales of either 30 or 45 days before dismissals can take effect.

Why do some businesses do it then?
It’s usually a calculated risk which is considered to be the least worst option available.

In the case of P&O Ferries they said that the business was making losses of £100 million a year and staff costs needed to be managed urgently as a consequence.  Although we don’t have all the facts, it seems that P&O decided that consulting with staff for at least 45 days would have been continuing those losses for too long and that it was better to dismiss everyone without warning.

Millions of pounds were also set aside for settlement packages and we understand that all or nearly all accepted settlement sums after losing their jobs.  As such, P&O probably did achieve the planned savings and have faced no claims as a consequence.  However, we can’t imagine that they correctly estimated the size of the backlash from the public, press and politicians.

In some cases, there can be security reasons behind an employer’s decision to dismiss without warning.  Of course, employees often have access to highly confidential or sensitive information, so dismissing immediately avoids the risk of departing employees misusing it.  Even so, there are usually less severe ways of protecting the business, for example by temporarily suspending access to information whilst the consultation process is pursued.

What are the consequences of not taking the correct approach?
Where there has been a failure to collectively consult, employees can claim up to 90 days’ pay, which is known as a “protective award”.

They may also have unfair dismissal or even discrimination claims.  These claims are valued for the most part by reference to how long the employee is out of work, but in discrimination claims compensation can also be awarded for any hurt caused by the discriminatory conduct.

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