P&O Ferries has claimed it did not break the law by making 800 staff redundant without consultation or warning last week.
It has now revealed it will offer a £36.5 million compensation package to the affected workers, with around 40 of them getting more than £100,000 each.
It said some employees would get 91 weeks’ pay and the chance to apply for new employment, adding that no employee would receive less than £15,000.
However, Boris Johnson used today’s Prime Minister’s Questions today to urge workers to “take action under the 1996 Employment Rights Act”, saying “it looks to me as though the company concerned has broken the law”, and that the government would be taking action as a result.
The company was accused this week of hiring temporary staff to replace the workers at rates as low as £1.81 an hour, getting around UK national minimum wage regulations because its vessels are registered outside the UK.
It claims the sums paid to employees will be the “largest compensation package in the British marine sector”.
In a letter to business secretary Kwasi Kwarteng, chief executive Peter Hebblethwaite said: “We know that for our people this redundancy came without warning or prior consultation, and we are painfully aware that this has caused distress for them and their families.”
It added it saw “no other viable means of preserving our iconic British business, saving the 2,200 remaining jobs it provides and protecting the 15% of Britain’s trade capacity it facilitates”.
Hebblethwaite also denied rumours that security staff had boarded vessels wearing balaclavas to manage the situation.
The letter explained that some shoreside employees could be impacted further by the changes made to crewing arrangements, but further collective redundancies would happen under consultation.
“Where there is a potential that their role may be made redundant they, and any relevant employee representatives, will be consulted with. We confirm that all consultation requirements in respect of these employees will be complied with,” the letter said.
The RMT union said that “pay in lieu of notice is not compensation” amid some reports that workers had been forced to sign non-disclosure agreements in order to secure the pay-off.
“If staff do not sign up and give away their jobs and their legal right to take the company to an employment tribunal they will receive a fraction of the amount put to them,” said general secretary Mick Lynch.
Tomorrow (24 March) two House of Commons Committees – on transport and business, energy and industrial strategy (BEIS) – will hold an evidence session to examine the options available to the workers who have lost their jobs.
It’s hoped the session will be attended by representatives from P&O’s parent company DP World, trade unions, the Maritime and Coastguard Agency and ministers from the relevant departments.
Huw Merriman, chair of the transport committee and Darren Jones, chair of the BEIS committee, said the “cruel nature of their dismissal put employment practices and UK plc under the microscope”.
“From P&O Ferries, our members want to know why this action has been taken and how it can be justified. From the government and its agencies, we want confirmation that our laws are not being broken and safety is not being compromised on our ships.
“This shocking story has raised questions about UK employment law, safety practices, the support of this business through a pandemic and the redress available. We intend to hear from the key players about what they are going to do that means these workers are not left high and dry.”
Changes to law on collective redundancies
According to one maritime lawyer, the government made changes to employment legislation in 2018 that enabled P&O to dismiss staff registered outside the UK without advance notice.
Kevin Barnett of marine law firm Lester Aldridge LLP told Sky News that the then transport secretary Chris Grayling signed off an amendment to legislation whereby employers must notify the government in collective redundancies of more than 100 staff, so the “notification must be made to the competent authority of the state where the ship is registered, instead of the secretary of state”.
Hebblethwaite referred to this in his letter to BEIS, adding: “The very clear statutory obligation in the particular circumstances that applied was for each company to notify the competent authority of the state where the vessel is registered.
“All relevant vessels are registered outside the UK. Notification was made to the relevant authorities on March 17.”
The TUC has urged the government to take over P&O’s vessels as “an operator of last resort” and reinstate all staff who were sacked.
General secretary Frances O’Grady said “ministers must come down on P&O like a ton of bricks”.
“If P&O is allowed to get away with a slap on the wrist, it will be a green light for employers up and down the land to treat staff like disposable labour,” she added.
“The government needs to hit the firm where it really hurts. That means suspending all of P&O’s licences immediately and cancelling its lucrative freeport contracts until all workers have been reinstated.”