The millionaire boss of P&O Ferries has insisted that the disgraced operator did not break British labour laws by sensationally sacking 800 seafarers without notice in one fell swoop via video call – because their ships were registered outside of the UK.
Writing to Business Secretary Kwasi Kwarteng yesterday, Peter Hebblethwaite said 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’ – in this case, Cyprus and the Bahamas.
The chief executive, who fired 800 crew on the spot to replace them with cheaper agency workers and defended an earlier round of sackings by declaring ‘only the fittest survive’, wrote that notification had been made to the relevant authorities on March 17, and that no offence had been committed regarding notifying the Secretary of State.
Mr Hebblethwaite added that the firm was ‘painfully aware’ of the ‘distress’ caused to workers and their families on being sacked without warning or consultation, but added that this course of action was taken as a ‘last resort’.
P&O Ferries also announced that it would pay more than £36million in compensation to sacked staff, with 40 employees in line for payments of more than £100,000. It said payouts would be linked to the period of service, and in some cases exceed £170,000.
The total value of the settlement is £36,541,648, with no worker set to receive less than £15,000, the company added.
But the Trades Union Congress (TUC) has said that P&O’s claims that it had not broken any laws do not mean that the ferry firm will not face legal action.
Its general secretary Frances O’Grady told BBC Radio 4’s Today programme: ‘We don’t believe their legal advice is right and in the past, in fact, P&O has followed consultation rules, so either their very expensive legal advice has changed or their morals have just fallen through the floor.’
It comes as the Government threatened to criminally prosecute and impose unlimited fines on P&O Ferries if the operator is found to have broken labour laws.
Former workers have reacted with fury to the announcement, with one telling The Times newspaper: ‘This is a total betrayal. It is clear, just as they were due to respond to the Government, that they want everyone to think they have done the right thing. I don’t want a payoff, I want the job I loved and gave me a life’.
The Nautilus union said P&O Ferries’ ‘shameless actions now extend to trying to buy its way out of a legal predicament exposed by the unions, obligation to report to the secretary of state and to consult with the recognised trades unions’.
They added: ‘P&O Ferries are claiming to be offering the “largest compensation package in the British marine sector” – a company in such desperate financial circumstances that it is prepared to spend £36.6million on a fake redundancy.
‘Let’s be clear, this statement is confirmation that P&O Ferries believes that with enough money it has no need to follow the laws of this country or be hindered by ethical business standards despite the glitzy commitments of its parent company in Dubai.
‘Instead, it intends to bully our maritime professionals into signing settlement agreements to buy their silence.’
Miss O’Grady said it was the case that one of their ferries was registered in Cyprus and another in the Bahamas, adding: ‘These are all about tax arrangements, but it’s the workers’ contracts that we’re looking closely at’.
She told the Today programme this morning: ‘We believe that P&O has acted unlawfully. It’s now clear that they deliberately flouted UK law in failing to consult with workers and their unions and sacking those 800 loyal and skilled seafarers.
‘We also now know, of course, that ministers knew that the sackings were imminent, and they knew before the workers knew, and they failed to inform unions too, so now the ball is in the Government’s court to make sure that P&O either reinstates those workers or they pay a very high price.’
She also insisted ministers ‘must come down on P&O like a ton of bricks’, adding: ‘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.’
A spokesman for P&O Ferries said: ‘This has been an incredibly tough decision for the business: to make this choice or face taking the company into administration. This would have meant the loss of 3,000 jobs and the end of P&O Ferries.
‘In making this hard choice, we have guaranteed the future viability of P&O Ferries, avoided large-scale and lengthy disruption, and secured Britain’s trading capacity.’
The company said that, subject to the settlement agreement, it would pay 2.5 weeks uncapped salary for each year employed, rather than the statutory one or 1.5 weeks. It is also offering 13 weeks salary in lieu of notice, and 13 weeks salary on top of this in absence of consultation.
But Mick Lynch, general secretary of the Rail, Maritime and Transport union (RMT), said that ‘the pay in lieu of notice is not compensation’.
‘It is just a payment staff are contractually entitled to as there was no notice given,’ he said.
‘The way that the package has been structured is pure blackmail and threats – that 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.
‘The actions of P&O demonstrate the weakness of employment law and protections in the UK. P&O have flagrantly breached the law and abandoned any standards of workplace decency.
‘They have ripped away the jobs, careers and pensions of our members and thrown them on the dole with the threat that if they do not sign up and give away their rights they will lose many thousands of pounds in payments.’
Last week, Mr Kwarteng wrote to Mr Hebblethwaite to say P&O Ferries had ‘lost the trust of the public’ and ‘given business a bad name’.
A BEIS spokesman said on Tuesday: ‘We have received a response to the Business Secretary’s letter to P&O and are reviewing their explanations.
‘We will continue to work at speed with the Insolvency Service to consider if legal action is required and will provide an update as soon as possible.
‘Given recent reports of staff being paid below the national minimum wage, the Business Secretary has also asked the Employment Agency Standards Inspectorate to investigate the terms of agency workers’ contracts.’
According to a leading maritime lawyer, former Tory minister Chris Grayling cleared the way for P&O Ferries to sack 800 staff last week without needing to tell the Transport Secretary.
Kevin Barnett, head of employment at marine law specialists Lester Aldridge LLP, has claimed that laws to protect employees in Britain were amended by Mr Grayling in 2018 so that the Secretary of State does not have to be notified of mass redundancies on ships registered overseas.
Mr Kwarteng had threatened P&O Ferries with unlimited fines, warning Mr Hebblethwaite that ‘clear rules’ include ‘notifying in advance… the Secretary of State’.
But Mr Barnett says that the Business Secretary is ‘incorrect’ on this point, telling Sky News: ‘The amendment states the notification must be made to the competent authority of the state where the ship is registered, instead of the Secretary of State.’
The Trade Union and Labour Relations (Consolidation) Act 1992 was amended by statutory instrument in February 2018.
The change signed off by Mr Grayling states: ‘[If] the employees concerned are members of the crew of a seagoing vessel which is registered at a port outside Great Britain… 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).’
The Department for Transport (DfT) said in an explanatory note that the amendment was supposed to improve seafarers’ employment rights.
The department claimed the amendment had been supported by the unions who have led protests against P&O’s actions. It added that no formal consultation was carried out before the change was made, and no impact assessment was carried out.
A memo leaked to the Sunday Times suggested that officials at DfT had been notified of P&O Ferries’ intent to sack hundreds of its staff without notice.
The memo, believed to have been written by a senior official, claimed that if the company did not sack the 800 workers then ‘an estimated 2,200 staff would likely lose their jobs’ in future. It also allegedly shows that the Department for Transport did nothing to oppose or question the company’s decision, even though it may have been against the law, according to the Sunday Times.
Source: The Dailymail