The actions of P&O Ferries’ leaders were labelled criminal by MPs at a parliamentary session today as it was revealed that government may have received warning of the firm’s eventual decision to make mass redundancies a lot earlier than it has so far acknowledged.
The chief operations officer of DP World, the owner of P&O Ferries, told MPs that a meeting took place at Dubai Expo on 22 November between senior leaders at the company and secretary of state for transport Grant Shapps, at which he was told significant changes to the ferry firm would take place in 2022.
Jesper Kristensen and P&O Ferries chief executive Peter Hebblethwaite said they did not know who exactly at DP World held the discussions but added that, since no decision had at that point been taken about the nature of the changes, the transport secretary could not have known the detail of what was to take place.
Today’s parliamentary hearing questioning P&O Ferries’ decision to sack 800 crew began with an abrupt question from Darren Jones MP, chair of the business, energy and industrial strategy (BEIS) committee, to Hebblethwaite: “When I was reading your biography it seemed pretty light. Are we to assume you don’t know what you are doing or are you just a shameless criminal?”
Huw Merriman MP, chair of the transport committee, called P&O Ferries’ behaviour “corporate thuggery” and asked Hebblethwaite: “You chose not to consult and wilfully broke the law” by paying people off without consulting. “Aren’t you concerned you are in breach of your obligations as a company director under company law? You came to parliament knowing you have wilfully broken the law.”
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Hebblethwaite repeatedly apologised to the crews and their families for the action but insisted throughout the session that it had no choice but to make the 800 redundancies if it wanted to survive. He did not deny he had broken the law by failing to consult staff in advance and notify the government in advance.
Ben Bradshaw MP joined Merriman in asking under-secretary of BEIS Paul Scully why not issue an injunction to prevent P&O from taking its action given that it had admitted to breaking the law. But Scully insisted that the insolvency service was looking in to the matter.
Kristensen supported the beleaguered P&O boss: “We supported the decision that was taken. P&O Ferries has made unsustainable losses. The business was not viable. This model was chosen as the only route that was an alternative to liquidation.”
To this, Jones asked given the breach of employment law, “Are you going to sack Hebblethwaite for gross misconduct?”
He added that many companies came before the committee with similar problems but did not break the law in failing to consult those affected by redundancies.
Business model
Hebblethwaite said the company needed to fundamentally change its business model and it knew no union would have accepted the changes. “Did you ask them?” asked Jones. “No,” came the reply. “You can’t just absent yourself from the UK legal system,” Andy McDonald MP told Hebblethwaite, “I’ve never heard such a farcical answer.”
The P&O boss went on to reveal that the workers would receive a minimum of £15,000 compensation with a maximum of about £170,000 being paid to very few crew members. By signing a settlement agreement the workers lost all rights to take further action, it was noted.
“These weren’t only UK nationals… these were international employees,” Hebblethwaite told MPs. “The previous model required us to have four crews on every ship on Dover-Calais. The new model requires us to have two crews and pay people when they work.” The average salary before the redundancies was £36,000, he said. The new model involved paying people between £5.15 and £6 per hour, he said.
Are we to assume you don’t know what you are doing or are you just a shameless criminal?” – Darren Jones MP
Gavin Newlands MP responded by saying such low rates were akin to those paid in modern day slavery but Hebblethwaite insisted such rates were internationally competitive in maritime businesses.
To the consternation of many of the MPs, Hebblethwaite said that “where we are governed by the laws of this country we will absolutely pay minimum wage but this is an international seafaring model consistent with our competitors. The seafarers we’re bringing in are international professional seafarers with international certifications and they are experienced workers.”
Kristensen was told by MPs that DP World had “completely trashed” human rights statements on its website. “Are you going to take them down because they are an insult?” asked Jones. Kristensen said there was no conflict between those statements and the company’s actions.
Reputational damage
Simon Jupp MP asked Hebblethwaite what view P&O Ferries took of the reputational damage it had suffered. “In the minds of customers you are morally bankrupt. What have you done to the brand?” he asked. Hebblethwaite admitted the brand had “taken a hit” and that on some routes such as Dover-Calais there had been a lot of cancellations. But by making the redundancies to the Jersey-registered crews and moving to an agency crew model in line with many of the firm’s competitors, it had reduced costs by about half.
British ships will cease to exist, and British ratings will cease to exist” – Mick Lynch, RMT
The question was raised over why French and Dutch employees were not made redundant. Hebblethwaite claimed not to know whether national or EU laws made these workers more difficult to sack but added that the vast majority of crew members were employed through Jersey. “This was about changing an uncompetitive crewing model concerning Jersey registered crew,” he added.
Earlier in the session Mick Lynch, general secretary of the RMT union, said P&O Ferries had broken the law and had “factored in what they’re going to have to pay for it,” which Hebblethwaite later confirmed.
He added that soon there would be “no ratings working in British ports. British ships will cease to exist, and British ratings will cease to exist.
“That’s what P&O are aiming to achieve, to kill our merchant marine and to kill our employment laws, and something’s got to be done about it today.”
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Government representatives at the hearing though, such as Scully, were keen to stress that the Insolvency Service needed to investigate P&O’s actions before any action would be taken.
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