P&O Ferries has admitted breaching labor law by firing 800 workers without notice. Chief executive Peter Hebblethwaite told MPs there was ‘absolutely no doubt’ the ferry operator was required to consult with unions.
The company replaced its teams with cheaper temps last week. Mr Hebblethwaite said new crew were paid below the UK minimum wage, except on domestic routes, but insisted this was allowed under international maritime rules.
He also claimed that Transport Secretary Grant Shapps knew of the plan to cut jobs in November last year, although this was strongly denied by the Department for Transport (DfT). Explaining the decision not to consult the unions, Mr Hebblethwaite told a joint session of the Transport and Commons Select Committees: ‘We felt that given the fundamental nature of the change, no union could accept it and therefore we chose not to consult because a consultation process would have been a sham.
“We didn’t want to put anyone through that. We are compensating people in full and in advance for this decision.
Asked whether he feared he had breached his legal duties as a company director, Mr Hebblethwaite said: ‘I put my hands up completely, hands up, which we have chosen to do not consult. We didn’t think there was any other way to do this.
Asked if he would make the same decision again in hindsight, Mr Hebblethwaite said: “We weren’t viable before, and I know that if we hadn’t made radical changes, the business would have closed.” The chief executive also told MPs that Mr Shapps was told on November 22 by P&O Ferries owner DP World that the company would be changing its business model.
The PA news agency understands that Mr Shapps met DP World chief executive Sultan Ahmed bin Sulayem in Dubai on that date, but the DfT insisted the Cabinet Minister had only been told that the ferry operator was facing challenges from competitors. A DfT spokeswoman said: “DP World did not tell the Transport Secretary of any changes it would make to P&O Ferries and there was no indication of the completely unacceptable changes it subsequently made. “
The minimum wage in the UK for people aged 23 and over is £8.91 per hour. Mr Hebblethwaite, whose basic annual salary is £325,000, revealed the average hourly wage for the new crew was just £5.50.
“We pay more than the ITF (International Transport Workers’ Federation) minimum wage,” he said. Works council member Andy McDonald pointed out that it was “below this country’s national minimum wage” and asked “how do you reconcile that?”.
Mr. Hebblethwaite replied: “This is an international maritime model which is consistent with models around the world and our competitors. The ferry company boss remained silent when Mr McDonald asked ‘could you maintain your lifestyle?’ if his salary was so low.
Mick Lynch, general secretary of the Rail, Maritime and Transport (RMT) union, told MPs that P&O Ferries was guilty of “flagrant breaches of the law”. He said: “They did it deliberately and they factored in what they’re going to have to pay for it.”
He said the company was “threatening and blackmailing” its former employees, telling them they had to sign a document or “you potentially won’t get any rewards and will have to give up all your legal rights.” He added: “It’s absolutely outrageous.”
Mr Lynch described UK employment law as “a shambles”. Andrew Burns QC, solicitor at Devereaux Chambers, told MPs that ‘all employers owning vessels must give 45 days’ notice to the competent authority before dismissal’.
He continued: ‘From what I was told this morning, the notice was given to the relevant authorities of the countries where the vessels are flagged only on the day of the redundancies and not in advance.’ It “appears to be a violation” of employment law, and “it may be that (P&O Ferries) could be subject to legal action”, he said.