P&O Ferries CEO admits disregarding UK rules, Malta-based company used to pay new crew members
The chief ferry operator at the center of a fierce labor dispute stunned UK lawmakers on Thursday when he acknowledged that the company had chosen to disregard the law and employment contracts when dismissed 786 workers without consulting them in advance.
P&O Ferries CEO Peter Hebblethwaite said during intense questions from members of a parliamentary committee that the company had decided not to discuss its plans with workers because it knew workers’ unions had never been will agree. Lawmakers have repeatedly characterized the move as a deliberate decision to break the law.
The company, which operates in the UK and is owned by a Dubai-based subsidiary of DP World, has fired workers as part of a cost-cutting plan it says was needed to bring the business and 2,200 another job will be saved. Dismissed seafarers shall be replaced by cheaper personnel provided by a third-party crew provider.
“There is absolutely no doubt that we were required to consult with the unions,” Hebblethwaite said. “We have chosen not to consult and we … will fully compensate for everyone.”
The drop – which came after P&O received millions of pounds of aid from the British government during the COVID-19 pandemic – caused outrage and sparked protests by trade unions in UK ports. P&O canceled all services between Britain, Ireland and mainland Europe following last week’s announcement, disrupting the movement of passengers and freight. Many routes are still closed a week later.
Unions representing redundant workers say P&O is paying for new crew members provided by International Ferry Management Ltd. based in Malta the equivalent of 1.81 liri ($ 2.38) per hour. Britain’s current minimum wage is £ 8.91.
Trade unions have long objected to “fire and recovery” plans in which companies cut costs by firing workers and then re-employing them on less generous terms. Under British labor law, such extreme action is intended to take place only after extensive consultations with employees and unions.
P&O’s decision to ignore those rules has raised strong questions from members of the British Parliament’s committee.
In one exchange, Labor lawmaker Andy McDonald challenged Hebblethwaite to explain why the company ignored its legal obligations to consult with workers.
“When you get in your car and drive down the highway, you see the 70 mph signal, you decide that won’t apply to me, I’ll do 90 because I think it’s important to do that? Is that how you live your life? ” asked McDonald.
“No,” Hebblethwaite admitted.
Lawmakers later expressed astonishment at the testimony.
Huw Merriman, a member of parliament from the ruling Conservative Party, said Hebblethwaite should “consider his position.”
“It is untenable for Parliament to come and say that you have decided to break the law, do not regret it,” Merriman told the BBC. “We can’t have companies run by people like that, so he needs to pass his card.”
Hebblethwaite said P&O had lost hundreds of millions of dollars over the past two years and needed to change its business model to survive. When asked if the company can survive the damage to its reputation by its recent actions, he acknowledged that it would be difficult.
Business Minister Kwasi Kwarteng last week warned P&O that the company could face unlimited fines and other penalties if it is found to have broken laws that require it to notify the government in advance before large-scale shootings.
P&O responded by saying that the company did not believe it had broken the law because all the ships on which the crew members worked were registered outside the UK.
The sailors worked on eight ships registered in the Bahamas, Bermuda and Cyprus. They were employed by three P&O units incorporated in Jersey, a dependency on the self-governing crown which is not part of the United Kingdom.
Crew members employed by two other subsidiaries based in France and the Netherlands were not fired, P&O said.
P&O said it would pay the dismissed workers 13 weeks ‘salary to compensate for the lack of prior notice, and another 13 weeks’ salary instead of consultation. In addition, P&O states that dismissed crew members will receive a salary of two and a half weeks for each year of service, instead of the legally required week and a half.
Workers will receive a minimum of £ 15,000, and some long-serving crew members will receive up to £ 170,000, Hebblethwaite said.