Legal experts are disputing P&O’s claims that it is not subject to English law after company boss Peter Hebblethwaite said British courts have no power to prosecute the firm.
The ferry operator claimed it had not broken UK laws, because its vessels are registered in Cyprus and Bermuda.
The claims come after Prime Minister Boris Johnson became the latest person to cast doubt over the legality of P&O’s practices.
“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,” Johnson said during PM questions yesterday.
Lawyers speaking to City A.M. claimed P&O has sufficient links to the UK for British courts to claim jurisdiction.
Under the Trades Union and Labour Relations Act of 1992, companies must consult trade unions and notify the government at least 45 days before dismissing more than 100 employees.
Joseph Lappin, head of employment at Stewarts said that recent case law establishes that “if the ships and employees are based in the UK,” shipping companies must follow UK employment law, including the 1992 Act.
He said the fact that P&O’s crew members are paid in sterling and “return to their homes in Larne, Liverpool and Dover” strengthens the UK’s jurisdiction.
On top of Lappin’s comments, Winckworth Sherwood’s head of employment Jo Keddie said the £36.5m compensation offered by P&O to sacked workers reinforced the case’s strength.
“The fact that such substantial enhanced compensation payments are being paid by P&O suggests that there is a case to be answered,” she told City A.M.
Despite the economic impact of a potential conviction, experts believe the reputational damage inflicted on P&O could be just as hard.
“In certain situations, it may cost less for an organisation to pay the penalty costs than to comply with the legal requirements, but recent events have shown that the reputational damage can be very high,” added Reed Smith’s employment law partner David Ashmore.