Government ministers knew about P&O Ferries’ plan to slash 800 jobs before staff were informed but were told by officials it would ensure the firm remained “a key player in the UK market for years to come”, it was claimed on Saturday.
A leaked memo, apparently written by a senior Whitehall official, justified the mass redundancies, stating that “without these decisions, an estimated 2,200 staff would likely lose their jobs”.
The memo, said to have been written before ferry staff were told their jobs were being lost last Thursday, said the redundancies “will align them [P&O] with other companies in the market who have undertaken a large reduction in staff previously”.
The memo was “widely shared across government”, including copies to the prime minister’s private office while the transport secretary, Grant Shapps, is understood to have received a copy, the Sunday Times reported.
Louise Haigh, Labour’s shadow transport secretary, said: “This proves the government was not only aware of P&O ferries’ scandalous action but complicit in it.
“They knew people’s livelihoods were on the line and they knew P&O was attempting to use exploitative fire and rehire practices. But they sat back and did nothing. The shambolic response to this shameful episode proves the Conservatives cannot and will not stand up for British workers.”
A Department for Transport spokesperson said: “This was an internal government memo which, as standard practice, outlined what officials had been told by P&O Ferries shortly before their announcement was made. This was sent before ministers were advised of the full details. As soon as they were informed, they made clear their outrage at the way in which P&O staff had been dismissed.”
P&O Ferries has been accused of wanting to exploit a loophole in minimum wage laws to draft in cheap foreign workers for its vessels.
The company has previously faced allegations of hiring crew for as little as £1.83 an hour, because the national minimum wage laws do not apply on international sea routes. Union officials say P&O may be able to cut its wage bill by up to half.
MPs are furious at the mass sackings via online video by a firm that has relied on more than £10m of taxpayers’ support to pay staff wages during the pandemic. Ministers face urgent calls to review the operations of its Dubai-based owner DP World, which also operates ports at London Gateway and Southampton.
Karl Turner, the Labour MP for Hull East, said: “They can now bring in cheaper crews because the national minimum wage laws do not apply. It is an outrage, and the government needs to urgently close this loophole.”
P&O’s ferry fleet was ordered to dock on Thursday and staff were told it was their final day of employment. The company said it had made a £100m loss in a year, and “swift and significant” changes were needed.
P&O suspended services on routes between Dover and Calais, Larne in Northern Ireland and Cairnryan in Scotland, Dublin and Liverpool, and Hull and Rotterdam. New crews are already in place, and P&O’s Liverpool-Dublin crossings resumed on Saturday afternoon.
DP World paid £322m for P&O Ferries in February 2019. The chairman and group chief executive is Sultan Ahmed bin Sulayem, and it is ultimately owned by Dubai’s ruling royal family. In May 2020, the firm announced up to 1,100 redundancies, the majority of which were crew in Hull and Dover. Unions warned MPs they were concerned about a long-term plan to replace UK-based crews with “low-cost foreign crews”.
Surveys by the International Transport Workers’ Federation (ITF) and contracts have previously revealed P&O has been at the bottom or near bottom of the league table of pay for overseas staff.
In 2019, an ITF survey claimed that P&O was paying catering staff a basic hourly rate as low as £1.83, excluding overtime. Staff from Poland, Portugal and the Philippines complained they were struggling to cope with working 12 hours a day, seven days a week, for two months at a time.
