Business

Britain’s P&O Ferries broke the law in laying off 800 staff, boss admits

Three P&O Ferries, Spirit of Britain, Pride of Canterbury and Pride of Kent moor up in the cruise terminal at the Port of Dover in Kent as the company has suspended sailings ahead of a “major announcement” but insisted it is “not going into liquidation.”
Gareth Fuller | PA Images | Getty Images

The boss of British ferry operator P&O Ferries has admitted the company broke the law by laying off 800 staff without consulting workers’ unions.

CEO Peter Hebblethwaite told lawmakers on Thursday that there was “absolutely no doubt” that, under U.K. employment law, the company was required to speak to unions before making mass redundancies.

“I completely throw our hands up, my hands up, that we did choose not to consult,” Hebblethwaite said, before adding that laid-off employees would be compensated “in full.”

The Rail, Maritime and Transport union (RMT) called for the government to issue an immediate injunction to prevent P&O ships from sailing and ensure the reinstatement of laid-off workers.

P&O Ferries attracted public and parliamentary outrage last week after firing 800 workers via video message and replacing them with low-wage agency staff reportedly earning under £2 ($2.63) an hour — less than a quarter of the national minimum wage.

Footage quickly emerged of crew being marched off of boats by balaclava-clad security while replacement staff waited in vans at ports, in what lawmakers dubbed a “national scandal.”

Speaking to U.K. members of Parliament at a joint transport and business committee, Hebblethwaite acknowledged that no union would have accepted the company’s job-cutting plans.

“We’ve moved from one operating model to another. It was our assessment that the change was of such a magnitude that no union could possibly accept our proposal,” he said.

Indeed, workers unions and the government’s opposition Labour Party have accused companies of attempting to “fire and rehire” staff, a move which effectively enables them to switch permanent workers with those on weaker contracts with lower pay.

Peter Hebblethwaite, chief executive of P&O Ferries, answering questions in front of the Transport Committee and Business, Energy and Industrial Strategy Select Committee in the House of Commons.
House Of Commons – Pa Images | Pa Images | Getty Images

RMT said the evidence provided by Hebblethwaite showed “multiple breaches of the law.”

“The company not only broke the law but would do it again, [and] we are calling for the government to issue [an] immediate injunction to prevent the ships sailing and reinstate the sacked workers,” RMT Secretary-General Mick Lynch said.

“This should include the government seizing control of the ships if necessary,” Lynch said.

RMT also called for the immediate disqualification of Hebblethwaite as a director.

Under U.K. employment law, a company is obliged to inform and consult with unions ahead of collective redundancies.

It is also duty-bound to notify governments in the country where its ferries are registered that it is planning such redundancies. The firm only informed authorities in Barbados, Bermuda and Cyprus on March 17, the day of the layoffs.

Hebblethwaite said reports from unions that new staff would earn under £2 were unfounded, noting that the average hourly rate of pay for new crewmembers would be £5.50 — a figure still well under the minimum wage of £8.91 for those aged 23 and up.

U.K. minimum wage for those aged 23 and above is set to rise to £9.50 as of April 1.

The company said earlier that the 800 layoffs will receive combined compensation of £36.5 million, with around 40 receiving £100,000 each. No staff member would receive less than £15,000 it added.

Legal experts called on the government to do more to ensure other companies are not able to mistreat workers in the same way in the future.

“The government including the prime minister have made all the right noises about what has happened, expressing outrage and sympathy, but the ball is in their court to do something about it,” said Neil Todd, a trade union law expert at Thompson Solicitors.

“The government now has the opportunity to put off any employer thinking that this type of behaviour is acceptable.”

British Transport Secretary Grant Shapps said he will announce next week a “package of measures” aimed at removing the loopholes “exploited” by P&O.

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