In the UK, employers are currently having to deal with the implications of high inflation and an ongoing ‘cost-of-living crisis’ affecting their employees. These issues mean that businesses are facing not only increased production costs, especially if they operate in an energy intensive sector, but also increasing pressure from employees and their trade unions for significant pay rises in order to protect real wages. Unfortunately, these issues are already leading to redundancies as businesses seek to make necessary cost savings, as well as to increasingly difficult pay negotiations.
However, the main recent industrial relations development in the UK has been the decision of P&O Ferries to move to a cheaper labour model using agency workers by dismissing around 800 employees without notice and after deliberately not engaging in a collective redundancies process with its recognised trade unions on its plan. This has led to an immediate and very significant public backlash against it, which has clearly highlighted the wider financial and reputational costs for businesses that abandon their social responsibilities to their employees. Indeed, the backlash has been so significant that the UK Parliament immediately held a hearing on the affair and the Government has announced that it will change the law to prevent employers (including P&O Ferries) from exploiting loopholes in the UK’s minimum wage legislation in future, as well issue a new statutory Code of Practice to clamp down on employers who fail to engage in meaningful consultation.