Market Loop - Backlash over P&O firings

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21st March 2022

Bite-sized business news from the UK and beyond

Good morning At last winter is over and spring is officially here! Yesterday marked the first day of astronomical spring in the Northern Hemisphere with the clocks going forward by one hour this Sunday. And before that the UK is set to bask in sunshine this week with temperatures set to hit 19C.

Today's stories

Backlash over P&O firings
Flurry of bids for Chelsea FC

TRANSPORT
Backlash over P&O firings

What’s going on?
Outrage continues over P&O Ferries decision to sack 800 crew with immediate effect and replaced them with agency staff.

Why is this important?

Last Thursday P&O Ferries staff found out via a pre-recorded video message that it would be their final day of employment, before security teams escorted them from their ships.

The English Channel crossings operator said the move was necessary to secure its future after years of losses. In the most recent financial year it posted a £100m loss driven by the slump in travel due to Covid-19.

But critics have pointed out that the company’s owner DP World is controlled by the Dubai sovereign wealth fund – an investment group with over $300bn of assets.

Serious questions have been raised over the legality of the firings. Under UK law employers must consult with staff and speak to trade union representatives if they want to make 20 or more staff redundant within any 90-day period. Given the outrage from staff and trade unions, it’s clear P&O didn’t do this.

Employers also have to tell the government if they want to let more than 100 people go which, from leaked documents, it appears P&O did. The government is facing criticism for not doing enough to challenge the P&O’s actions, it now says it’s reviewing the legality of the firings.

Zooming out

Firing so many people without a consultation process is uncommon but there is unfortunate precedent. In 2005 airline food maker Gate Gourmet sacked 700 workers over a megaphone before rehiring a third of the staff on lower pay and worse conditions.

As there was no consultation process, P&O staff could claim for unfair dismissal by taking the company to an employment tribunal, but this can be a long and costly legal process.

Undoubtedly P&O’s reputation will take a serious hit with #boycottpando surfacing on social media.

Other stories to keep you in the loop

Oil ramp up: Saudi Arabia to increase oil production to meet global demand
Energy change: Qatar to help Germany cut reliance on Russian gas
Out of fashion: TM Lewin collapses into administration for the second time with all jobs at risk
American takeover: Ted Baker draws US takeover interest
Floating away: Private equity house CVC plans Amsterdam listing in blow to London market
World’s richest football clubs: Manchester City top club rich list for the first time

SPORT
Flurry of bids for Chelsea FC

The auction of Chelsea Football Club has been called the “highest-profile, fastest, and most complex sports team sale ever” and over the weekend more than 20 parties submitted initial bids.

The club was put up for sale earlier this month after its current owner, Russian oligarch Roman Abramovich, came under pressure to dispose of his UK assets due to his association with the Russian regime following its invasion of Ukraine.

Since then, the UK government has imposed sanctions on Abramovich essentially freezing all his British assets. This means the club must operate under strict rules. It cannot buy players or sell new tickets and merchandise.

Clearly the club won’t be able to function for long in this state, this means a quick sale is vital to keeping it afloat.

The auction has drawn interest from billionaire-led groups in the UK, US and Middle East. Sources say the club could fetch over £2bn. A huge return from the £140m Abramovich paid back in 2003 but he’s said proceeds from the sale will go to victims of the war in Ukraine. He’s also stated that won’t be asking for the £1.5bn loan he gave to the club to repaid.

Among the bidders are:

The Ricketts family, who own Major League Baseball team the Chicago Cubs.
British property mogul Nick Candy, supported by former Chelsea striker Gianluca Vialli.
Consortium of ex-players, including John Terry, as well as British entrepreneurs and fans.

The Raine Group, the American bank overseeing the sale, is expected to shortlist a handful of bidders before in-depth negotiations and final offers. The sale could be wrapped up by the end of the month.

Stat of the day

The average Briton didn't go outside for two and a half days each week during this past winter

Interesting links from around the web

When to tell your colleagues your salary (and when you shouldn't)
4 tips to stay connected when your friends live far away
A mind-blowing visualisation of how many humans have ever existed, and how many there might be to come

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Market Loop - Backlash over P&O firings

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