Fact check: P&O’s mass ‘fire and rehire’ of staff is a moral outrage but the links to Brexit are limited

We investigate the role of Brexit in the summary sacking of 800 staff.  

The whole political spectrum has rushed to denounce the ‘fire and rehire’ of 800 staff at P&O Ferries last week. Nigel Farage lamented how Brexit was meant to be about “putting our people first”. Many leftists and Remainers were quick to argue the opposite, that this was an example of the “Singapore-on-Thames Brexit masterplan”.

So, what’s the truth of it? There are, broadly, three ways of looking at the role Brexit has (or has not) played in the P&O mass sacking: (a) whether any post-Brexit legal and regulatory changes made it easier for the company to do this; (b) whether the Brexit-hit to the economy was a factor in the company losing money; and (c) does the government’s vision for Brexit mean that we should expect more mass sackings like this in the future?   

Let’s consider each in turn.

Have post-Brexit changes made it easier for P&O to do this?
Back in January 2021, the UK government raised the idea of using Brexit to deregulate UK employment rights. This would not have been particularly straightforward on two grounds. Legally, the UK had signed a trade agreement with the EU that committed to maintaining a level-playing field on employment rights. This meant that deregulation in this area risked the EU introducing retaliatory tariffs on UK goods. Politically, employment rights are popular in wider society, and by removing them the government risked losing some of the new voters they won after 2016.

So, it wasn’t surprising that the government u-turned, dropping the idea of a review less than 10 days after they first briefed it to the media. As a result, UK employment law continues to be consistent with the EU’s minimum floor.

As news of the P&O story broke many people (e.g. this tweet with 842 retweets and over 2k likes) argued that EU law bans mass redundancies. This is untrue. EU law simply establishes rules around consultation in relation to collective redundancies. In the UK, these rules were implemented through statutory legislation and were not removed after Brexit. P&O may well have breached these rules, but, Brexit wasn’t a factor either way.

VERDICT: No, post-Brexit changes have not made it easier.

Are P&O workers a victim of the Brexit blow to the economy?
P&O was already facing difficulties prior to Brexit and the pandemic. The company posted record results back in 2015, with revenue hitting £1bn, helped by the collapse of a rival. But since then, it has struggled, posting a loss of £38.82m in 2019, which mushroomed to £85.95m a year later when the pandemic struck. Brexit has compounded these problems. A reduction in trade with Europe has hit revenue from haulage, while freight companies moving goods between Northern Ireland, the Republic of Ireland and the single market have also altered their traditional routes in order to avoid having to move goods through Britain. This has been a factor in reducing the two million units of freight that P&O use to move. So, whereas passenger numbers could be expected to recover post-pandemic, the same is not likely to be true of freight, where the disruptive impact of Brexit will be more permanent.  

VERDICT: At least partially, yes. Brexit has compounded the company’s problems.

Does the government’s vision for Brexit mean that we should expect more sackings like this in the future?   
One of the reasons that the P&O sackings are embarrassing for the government is that they have put a lot of political capital into rejuvenating UK ports and shipping. Their big policy in this area is so-called ‘freeports’, a zonal development model that creates special economic zones with tax and tariff breaks to companies operating within them. Although the UK government has not exempted these areas from employment law, they certainly don’t do anything to improve workers’ rights. In Teeside, the biggest freeport project, there have been rows with the unions.

These types of zones also tend to just drain investment from other areas, rather than boosting economic activity and growth overall. It is perfectly conceivable that jobs with better contracts and trade union representation in one area are lost to competition from freeports where workers face greater exploitation. There is also a concern that just as the UK takes tentative steps against ‘dark money’, freeports enable money laundering and smuggling.

While freeports do exist in EU member-states, they are very much part of the UK government’s “Brexit vision”. Indeed, the EU is increasingly clamping down on them due to their role in organised crime and corruption.

Ultimately, the government has not proposed any legislation that would give workers more rights. For example, just last October, the government voted down a Labour proposal to ban the “fire and rehire” practice used by P&O.

VERDICT: Yes, we should expect more in the future, because the government continues to oppose legislation that would ban the practice of “fire and rehire” and their freeport model risks pushing down pay and conditions.