If The Body Shop can flout the law by firing its staff, the law is an ass

First, it was P&O. Now, it’s The Body Shop.

As revealed by The Independent, the struggling cosmetics retailer sacked 270 employees, including at least 15 women on maternity leave, at a moment’s notice via Microsoft Teams last Tuesday. So much for its brand values (its website mentions the firm’s founding vision that “business could be a force for good”).

The way the firings were conducted may well have put the company in breach of employment rights. After all, the administrators admitted that “normal regulations” – which require that employees or their representatives are consulted before redundancy programmes – were ignored.

In their response to an email campaign by staff, The Body Shop’s administrators, FRP Advisory, stated that they had not engaged in consultations because “a swift reduction” in head office payroll costs was required. They cited their statutory duty to take actions to benefit the company’s creditors.

Well, phew! That’s all right then.

The P&O Ferries case was somewhat different, although the callousness of P&O’s behaviour towards its employees was the same. The ferry operator recalled its fleet on the morning of 17 March 2022. Some 786 members of staff were treated to a stark video message: “I am sorry to inform you that your employment is terminated with immediate effect ... Your final day of employment is today.”

Terminated workers were replaced by agency staff, who were paid a pittance. The company claimed it had been forced to make the redundancies because its previous business model was unsustainable. Unlike The Body Shop, it was not in administration.

P&O Ferries, which failed to engage in the statutory consultations, had a duty to notify the secretary of state, or the appropriate authorities where its vessels were registered, of its intention to announce mass lay-offs. It did not do this. The affair led to an astonishing hearing before a parliamentary committee at which CEO Peter Hebblethwaite told MPs the company had knowingly acted illegally and would do so again should the need arise.

The Body Shop’s behaviour wasn’t so brazen. Tina Maxey, an employment lawyer at Ellisons Solicitors, told The Independent that while a failure to properly consult staff was a breach of employee rights, it was not a criminal offence on the part of administrators or the business. “As long as it has notified the secretary of state of the redundancies, the company can choose whether or not it collectively consults,” she said.

But the fact that workers were not trampled on in a nakedly illegal manner will come as slim comfort to redundant staff left pleading with their banks for mortgage payment holidays. The Body Shop employees do have the option of pursuing unfair dismissal claims, but these are obviously difficult, expensive, stressful and take time.

Against this backdrop, Labour has promised a new deal for workers. Polling suggests that enhancing their rights would be highly popular. Commissioned by the TUC, the survey carried out by Opinium found 67 per cent support for all workers having a “day one” right to protection from unfair dismissal. This included 61 per cent of Conservative 2019 voters. Just 16 per cent of UK adults were opposed.

Six in 10 (62 per cent) backed giving workers in the gig economy new rights and protections, such as sick pay and holiday pay – including 59 per cent of 2019 Conservative voters. Just just 6 per cent of UK adults opposed this. Bans on “fire and rehire” and zero-hours contracts also attracted strong support.

There should also be greater sanctions imposed on employers who ride roughshod over their employees’ rights and the law. As it stands, the law is an ass.

I was struck by The Body Shop’s administrators saying that a swift cut was needed to keep creditors sweet. Leigh Day solicitor Michael Newman said he would “question whether the law has got the balance right between creditors and employees” in the wake of this episode.

It also serves to highlight just how weak the legislation is more generally. If I park illegally because I need to get into a Tesco Express on my way home, I’ll get a ticket and short shrift if I use “inconvenience”, or the need to be quick, as grounds for an appeal against my fine. The Body Shop, by contrast, need have no such concern. It might have to fight some unfair dismissal claims, but there will be no official sanction.

It is troubling that organisations such as the CBI are now already seeking to water down Labour’s plans to redress the balance; new president Rupert Soames told the Financial Times it had been providing “private feedback” on the proposals and that it wanted to “help” the party, which has a sizeable lead in the polls, to avoid “unintended consequences”.

This is reminiscent of the CBI’s opposition to the introduction of the minimum wage, which we were told would cost thousands of jobs. It didn’t. Should we also believe that a secure workforce would harm Britain’s competitiveness? Or should we consider that this would make for a more productive and confident workforce to the benefit of the economy?

At the very least, scandals such as The Body Shop and P&O Ferries need to be addressed. What has happened is quite unconscionable.