On Thursday 17th March 2022, P&O Ferries Limited, which carries approximately 10 million passengers every year and accommodates 15% of UK freight travel, sacked over 800 of its staff during a three-minute video message without notice and will be replaced by agency workers on a wage of £1.81.
The rationale for this controversial decision, which has been labelled as a ‘last resort’ by one of the company’s spokespersons, was founded on the need to plug the gap of £100million losses year on year despite receiving a £15million government grant in 2020 to alleviate the effects of revenue slumps over the pandemic.
Not only have P&O’s actions received backlash across the media, particularly when the parent company of P&O, DP World, paid £270 in dividends in 2020, but the ruthless sackings have resulted in protests on ships which resulted in workers needing to be escorted off vessels.
Though an outrageous decision to make, one interesting point to note is that the repercussions of the similar decision have proven unusual. Indeed, in recent times, Boohoo was paying their factory workforce less than the minimum wage. Whilst such actions by companies would naturally trigger poor reputational damage, the company nonetheless received an increase in revenue despite such backlash with no prolonged consumer boycott.
Therefore, corporations looking to reshuffle their workforce to reduce overheads may look to see how P&O comes out of this situation. Indeed, it has been reported that the current market for new jobs is lucrative and fired staff may be able to find new positions with minimal struggle.
That said, the government has announced that they are beginning to review their contracts with P&O as a show of detestation for the company’s actions. Further, Labour has urged the UK Business Secretary Kwasi Kwarteng to take legal action against the company due to the scandalous actions, with the Prime Minister also stating that this action has been a breach of the relevant law.
As well as this pressure to launch action, the government has faced criticisms in the wake of voting against the rule for stopping fire and re-hire. Under the process, which has been previously used by British Airways, British Gas and Tesco, employees are either fired without the prospect of further work or re-hired on less favourable terms.
The action encouraged by the Labour party is to pursue a criminal action under s. 193 Trade Union Labour Relations (Consolidation) Act 1992. Under this legislation, employers who intend to make over 100 people have a duty to notify the Secretary of State in writing and give notice of 45 days before taking any action against employees. Failure to notify under this provision renders the corporation liable for financial penalties.
When P&O announced the sacking, the government stated that no notice was given to them under the relevant law. However, it has been claimed by Chris Grayling, the Transport Secretary between 2016 and 2019, that the need for notification under the Trade Union and Labour Relations (Consolidation) Act is not necessary by virtue of a 2018 EU Directive. As such, the position of the law regarding notification remains unclear.
Additionally, the actions of P&O could give rise to claims in the Employment Tribunal. The most likely claim to be brought by employees, potentially as a class action, would be founded on Wrongful Dismissal. Under this common law rule, a claim is based on an alleged breach of contract by the employer at the employee’s expense.
In such cases, the issue for the court or tribunal is whether a breach of contract has occurred – with many claims being founded on whether sufficient notice has been given under the contract. Given that there are claims that no notice is given, it is likely that many claims will be brought against P&O because of their recent actions.
Article written by Andrew Dewey
The Divorce, Dissolution and Separation Act 2020 (DDSA 2020) is coming into force on 6 April 2022, and the Act is touted to be the biggest shakeup in UK divorce laws in the last 50 years.
The Bill was introduced in June 2019 following a public consultation with the government publishing its response to the consultation in Reducing Family Conflict: Reform Of The Legal Requirements For Divorce and was published on 9 April 2019.
The Act received Royal Assent on 25 June 2020. However, its enactment is later than previously intended, with this delay being intentional in enabling the HMCTS online portal to be brought up to speed in facilitating the changes imposed by the Act’s enactment.
The Act enables ‘fault-free divorces, and in turn, reduces family conflict. It is a further materialisation of the courts’ encouragement of quicker settlement of potentially tempestuous family dispute cases, and it extends some way in addressing the shift initiated by the Family Law Act 1996 to no-blame divorces from the fault-based approach of the Matrimonial Causes Act 1973 (MCA 1973), but which was somehow cumbersome in achieving this aim.
Primarily and as previously alluded to, the DDSA 2020 imposes married couples issue divorce proceedings without apportionment of blame, and in facilitating the aim of reducing familial disputes in this context, the main changes brought about by the Act are as follows:
Thus evidently, in light of the above, the DDSA 2020 appears to support the courts’ overriding objectives under Rule 1.1 of the Civil Procedural Rules, in that, inter alia, cases must be dealt with justly, at proportionate costs whilst saving expense and ensuring that all cases are dealt with expeditiously and fairly.
The practical application of the DDSA 2020 is that it will, most importantly, protect children caught in often acrimonious and weaponised separations attributable to the need for apportionment of blame. It will be a less costly process when issuing divorce proceedings as the length and complexity of litigation are significantly reduced, which in turn reduces clients’ overall financial input.
The DDSA 2020 helps put parties on an equal footing to an extent, and it will be a lesser contributing factor to the case build up and subsequently backlogs in the judicial system, thus freeing up court resources for perhaps more urgent cases. Finally, the DDSA 2020 will help reduce the entanglement in what is often a painful, stressful and emotionally draining process, no matter how amicable a separation may be.
It will take some years to glean whether or not the DDSA will successfully achieve its ambitious aim. However, as the then Justice Secretary and Lord Chancellor, the Right Honorable Robert Buckland QC MP, states, ‘the institution of marriage will always be vitally important, but we must never allow a situation where our laws exacerbate conflict and harm a child’s upbringing’, and the DDSA 2020 seeks to do just that in attempting to strip off a very sizeable portion of antagonism from divorce proceedings.
Such an ambition could never be perceived as a bad thing.
Short selling. The age-old investment strategy is widely adopted by some of the world’s most successful hedge funds, individual traders, and investment firms. Existing for centuries, this strategy certainly divides opinion. To some, the strategy ensures fairness in the market by enabling the trusted powers-that-be to flesh out fraudulent companies.
To others, the tactic epitomises the ‘advantage’ enjoyed by institutional investors over the retail investor. Whatever your view, one thing is clear – the US government are concerned. In this article, we will explore the US Department of Justice’s investigation into potential short selling malpractice, explain why this is happening, and discuss why this may be an important milestone in the regulation of institutional investors.
In short (no pun intended), short selling is a trading strategy that enables a trader to benefit from the fall in the price of a stock. This is achieved by a trader essentially borrowing shares in a stock and selling it at market value. The trader then speculates that the stock will fall in price, hoping to purchase it at a lower price than they originally sold it and pocket the profits in turn.
Despite its extremely high-risk nature, short selling has deep-rooted origins beyond Wall Street. The practice first surfaced amidst a fallout within the first company to offer shares to the public, ‘The Dutch East India Company’.
When co-founder Isaac La Maire stood down as a director in 1605, just three years after the company’s formation, he sought revenge on his East India counterparts by shorting the stock and spreading false rumours of the company’s supposed shortcomings. The Dutch government didn’t like what they saw and made short selling illegal.
In February, it was announced that the US Department of Justice would be investigating dozens of short selling investment firms. The investigation has been ongoing for a year and includes some of the most renowned names in the market.
According to reports in Bloomberg, the FBI raided the home of Citron Research founder Andrew Left, who famously shorted Gamestop stock during the heights of the Wall Street Bets short squeeze fiasco. Furthermore, dozens of other major players have been handed subpoenas in recent months, including Melvin Capital Management and Orso Partners.
Paramount to the investigations is the power possessed by the Justice Department following an investigation. Most investigations into potential market wrongdoing in the US are spearheaded by the Securities and Exchange Commission (SEC), an independent agency of the United States federal government. Whilst their investigations are incredibly effective, the SEC only has the power to pursue civil actions against individuals and companies alike. To pursue criminal action following an investigation, the SEC would require the help of a federal executive department of the US government.
Enter the US Department of Justice.
The primary purpose of the Department of Justice is to ensure the enforcement of federal law. They possess the power to prosecute anyone proven to have committed wrongdoings under US federal law. The DOJ will be pivotal to any criminal action pursued if such evidence is found. This reflects a massive paradigm shift in the government’s perceptions of short sellers and highlights their clear market manipulation and malpractice concerns.
At present, the DOJ hasn’t specifically accused anyone of criminal wrongdoing. Whilst raids, subpoenas, and requests for information have been enforced, the investigation is yet to tie anyone to criminality directly.
Nonetheless, the investigation highlights the US government’s concerns with short sellers. Whilst it is too early to speculate whether this is indeed the ‘beginning of the end’ for short selling in the US, it is clearly the beginning of a paradigm shift on Wall Street.
Freeports are allocated or specified areas where special economic rules whereby the usual tax and customs regulations do not apply. They are located within the UK’s borders and usually around air, sea and rail ports.
These special rules permit imported goods, such as raw materials, are free from tariffs, and importers need only pay tariffs on exporting finished products.
Importers or companies based in freeports are subject to lower rates of national insurance tax. Land purchases in these sites are subject to full SDLT relief with specific stipulations, and full Business Rates reliefs apply to all new businesses and specific existing businesses within those sites.
They are similar to enterprise zones, yet, a critical difference between the two business models is that freeports are primarily for supporting businesses that import, process those imports and then export those processed imports, whilst enterprise zones only provide general business support.
The first freeports were opened under the Thatcherite regime to bolster the declining economy, ending with a total of seven. However, in 2012, permission to renew their licences was revoked due to increasing criminal activity, especially money laundering and tax evasion. Additionally, their impact on bolstering economic activity in supposedly deprived areas did not pan out as hoped.
Perhaps surprisingly to some, in its March 2021 Budget, the current government announced that eight new freeport locations in England had been given the green light, with the first operation in Teesside commencing in November 2021.
The government has justified the freeports’ renewed operation as an opportunity to attract investments in areas that need them the most, with Prime Minister Boris Johnson stating it will be a vital tool in closing the gap between the rich and the poor or ‘levelling up’ to coin a phrase.
However, there are arguments that unless more stringent measures are in place, freeports remain at risk of money laundering and tax evasion, perhaps even more so than before with the increasingly sophisticated techniques used by criminals to achieve their goals and the seeming lack of regulation surrounding these sites. Furthermore, there is the additional threat of the ports being targets for human trafficking gangs.
Some also believe freeports are tax havens, with the government receiving less money from taxation, and it is therefore highly probable the government may increase tax elsewhere to make up for the deficit, for which the current trend appears to be the taxation of the poor instead of the rich.
Whichever side of the fence you are on, the recommencement of freeports is still at its humble beginnings. However, if the recent landmark deal between the Tories and the Scottish government for the opening of two new Green freeports in Scotland and further plans to extend freeport locations in the other devolved nations are to go by, there should be a general concession that, as at now, freeports appear a good tool for ‘levelling up’.
Article written by Aqua Koroma