P&O Ferries has insisted it did not commit any offence in firing nearly 800 workers without notice, as it announced what it said was believed to be the largest compensation package in the British marine sector.
MPs had asked for confirmation that laws were not broken with the shock sacking and said the situation, which caused widespread outrage, had raised questions about UK employment law.
But P&O Ferries chief executive Peter Hebblethwaite said all vessels involved were registered outside the UK and the relevant authorities in each case had been notified.
In a letter to Business Secretary Kwasi Kwarteng dated 22 March, 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”.
He wrote that notification had been made to the relevant authorities on 17 March, and that no offence had been committed regarding notifying the Secretary of State.
He said 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”.
Hebblethwaite has been invited to attend an evidence session jointly held by the Commons Business, Energy and Industrial Strategy (BEIS) and Transport Committees on Thursday, which will examine what options are available to the UK Government and the workers who have lost their jobs.
In a statement, the committee chairmen Darren Jones and Huw Merriman said: “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.”
P&O Ferries has announced it is offering more than £36m 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 said.
Employees are also being given support to find a new job at sea or onshore.
The ferry giant said that 575 of the 786 seafarers affected are in discussions to progress with the severance offers.
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”, adding “it is just a payment staff are contractually entitled to as there was no notice given,”.
Last week, Kwarteng wrote to 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.”
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”.
TUC general secretary Frances O’Grady 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.”
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