Transport secretary Grant Shapps has called for P&O Ferries boss Peter Hebblethwaite to step down after calling his attitude to the law ‘brazen’ and ‘breathtaking’ over the sackings of 800 workers and replacement with agency staff last week.
Hebblethwaite admitted to MPs at a special parliamentary hearing on Thursday 24 March that he broke the law by not consulting workers but said he would make the same decision again if he had to.
The transport committee chairman has also called for Hebblethwaite to go, with Conservative Huw Merriman saying: “It’s untenable to come to parliament and say you decided to break the law, you have no regrets.”
Calls for the P&O boss to resign were amplified by the Rail, Maritime and Transport union (RMT) calling for the immediate disqualification of Hebblethwaite as a director and the Institute of Directors suggesting Hebblethwaite could face court proceedings under the Company Directors Disqualification Act (1986).
Yet despite the clear-cut expressions of outrage over P&O Ferries actions, the MPs at yesterday’s session also heard that the law itself was not exactly crystal clear in relation to shipping crews.
Much of the anger has focused on the lack of notice given with many stating the failure to notify the secretary of state and Insolvency Service 45 days in advance was among the company’s principal misdeeds.
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Where are the ships registered?
But in 2018 the Seafarers Regulations amended the 1992 Trade Union and Labour Relations (Consolidation) Act to insert a section on redundancies for workers at sea. The section says: “The employer shall give the notification required… to the competent authority of the state where the vessel is registered (instead of to the Secretary of State).”
P&O’s ferries are registered in Cyprus, where 45 days’ notice is needed for making more than 20 employees redundant; Bermuda (30 days) and the Bahamas (30 days). Jason Chuah, professor of commercial and maritime law, the City Law School, told MPs that failure to notify the flag state may not attract sanctions under the Trade Unions and Labour Relations Act because only failure to notify the secretary of state is mentioned. This was a gap in the law that needed plugging, he said.
Minimum wage
The failure of P&O Ferries to pay the minimum wage to the new workers employed by an agency to operate its ferries was also highly controversial. But, said Andrew Burns QC, barrister at Devereaux Chambers, it was not clear who was “in” and who was “out” when it came to UK employment law. Parliament could amend the law to ensure more ship crews were subject to UK minimum wage law.
Contracts of employment for P&O are made in Jersey, the MPs heard. But this should not affect any proceedings at employment tribunals, the session heard, because tribunals looked at where employees were based and where their employment was administered from. In most cases this was Dover or Hull.
Chuah pointed out that since 2020 there was a requirement to pay minimum wage for anyone working in UK territorial waters or the UK sector of the continental shelf. Sailing from Scotland to Northern Ireland would be covered but sailing from Ireland to the UK wouldn’t be. This was an anomaly that needed addressing he said.
The P&O workers’ employment contracts are registered in Jersey but this would not be an obstacle to any employment tribunal proceedings, the lawyers agreed, because the tribunal would look at where the roles were carried out rather than the administrative side.
Failure to deal with fire and rehire has set a broader tone that has encouraged a culture of impunity” – Alan Bogg, University of Bristol
Fire and rehire
Fire and rehire legislation was irrelevant to the P&O case, said Burns. Centrica and British Airways had negotiated successfully with unions and employees on new terms and conditions and show this was a reasonable way to proceed. P&O’s lack of engagement with staff showed that the case should not be mentioned in the context of fire and rehire and in any case, he argued, the penalties for getting fire and rehire wrong, as in a recent Tesco case, were very severe. This meant no new laws were needed in this area, he said.
But Alan Bogg, professor of labour law, University of Bristol, added a caveat to this. He told the MPs that P&O’s sackings were “fire and rehire on steroids” in that although the mooted legislation of recent months was irrelevant, the government’s “failure to deal with fire and rehire had set a broader tone that has encouraged a culture of impunity”.
Breach laws with impunity
For Bogg the key issue was now remedy. He said current rules favoured large companies that could breach laws with impunity having factored in the price of compensation. He said P&O Ferries was in effect “buying itself out of the rule of law”.
He added: “I’d be in favour of removing caps and limitations on remedies in situations when you have such gross violations of employment laws as you have here. Efficient breach is an affront of the rule of law.”
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Bogg was asked by Ben Bradshaw MP to explain why Dutch and French P&O workers were not affected by the redundancies. In legal terms, Bogg suggested it was because these jurisdictions had more significant restrictions in place in terms of remedies and enforcements. He said: “Dismissals such as these were likely to be made null and void or subject to injunction by courts in those countries.”
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