P&O Ferries has said it will pay out £36.5m in compensation to workers sacked last week and replaced with agency staff paid less than the UK minimum wage.
The ferry operator scrambled to outline its plans to compensate former staff in a letter to business secretary Kwasi Kwarteng today, who had demanded an explanation from P&O following a fierce public backlash against the sackings.
Some workers are in line for payouts of as much as £170,000 and no one will receive less than £15,000, P&O said.
The payments are linked to length of service, with former crew receiving 2.5 weeks' pay for each year they have been with the company.
P&O highlighted that the terms were more generous than the statutory minimum redundancy payments of 1 week per year of service.
It claimed the announcement represented “the biggest compensation package” in maritime history. However, the RMT union slammed P&O’s announcement as the “actions of a bully”, and said the payments only amounted to what staff were contractually entitled to.
P&O will give former staff up to 13 weeks’ salary in lieu of notice and 13 weeks’ salary in the absence of a consultation period over the sackings.
Some staff are receiving 91 weeks’ pay “and the chance of new employment”, P&O said.
The company reported that 575 of the 786 seafarers affected are in discussions to move forward with the severance offers.
P&O faced caused widespread anger after sacking all of its UK crew with immediate effect last week.
In their place the company has hired agency staff on as little as £1.81 per hour, according to the RMT union. P&O disputes that figure.
Some of P&O’s vessels are registered in Cyprus meaning the company does not have to pay the UK statutory minimum wage.
A P&O spokesperson 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.”
Responding to the announcement, RMT union general secretary Mick Lynch said: "These are the actions of a bully trying to maximise profits by sacking workers and replacing them with agency staff below the minimum wage.
"The detail of what the company are imposing is not new. The 2.5 weeks is what we have negotiated in the past with P&O.
"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.”
