P&O sacks 800 staff after receiving over £15m of public money support in a year

The company said it acted to preserve its long-term future calling the decision "very difficult but necessary".

Scottish Trades Union Congress said it was a "damning, outrageous move" and the RMT union said crew members were being "replaced with foreign labour" through agencies and told members to remain onboard.

As staff were being told about the redundancy over a Zoom call, motorists were being refused entry to Cairnryan, Dumfries and Galloway on Thursday morning and other ports across the UK.

The ferry operator said the "tough decision" to stop services was made to secure the future of the business.

But the UK government called the workers' treatment "wholly unacceptable".

The Herald has learnt that the P&O group received £14.972m in government grant income in 2020 - a mix of financial support provided as part of the Covid government job retention scheme and in relation to post-Brexit freight capacity agreements with the Department of Transport.

It is known that £4.4m in subsidies was also given to P&O subsidiary as part of the government's public service obligation scheme which began on May 9. 2020 and closed nine weeks later to safeguard vital freight routes across the UK. Only routes assessed to be at risk of becoming commercially unviable -and, so, at risk of closure - due to the impact of Covid-19 were considered for funding.

The Herald has learnt that £772,000 of the subsidies provided by the UK Government to P&O was used to support the key Scotland to Northern Ireland link between Cairnryan and Larne.

In the wake of the coronavirus outbreak, P&O Ferries said in May 2020 that around 1,100 workers would lose their jobs as part of a plan to make the business “viable and sustainable”.

In early April, 2020, P&O sought a £150 million bailout from the UK Government to avoid collapse, but no offer was made.

In the wake of the job loss announcement, the RMT said workers were being replaced with foreign workers.

It said P&O had replace 60 UK ratings on the Pride of Hull, which operates from Hull to Zeebrugge, with 57 agency crew from the Philippines who are paid £4.50 per hour.

P&O is owned by Dubai-based DP World, one of the world's biggest port operators, paid a £270m dividend to shareholders in 2020.

Profit attributable to owners of the company jumped by over 50% to $475 million in the period ended June 30, from $313 million last year.

The P&O land and sea group made a £105.3m after tax loss in 2020 after a £1.9m deficit in 2019 and a £2.7m profit in 2018. But P&O Ferries Limited, which operates the passenger services made a £63m after tax profit in 2020.

Shadow transport secretary Louise Haigh said the treatment of the workers was a "national scandal" and believe it was illegal.

"It is quite simply a scandal that this Dubai owned company, which received millions of pounds of taxpayers money in the pandemic, without consultation and without notice have upended the lives of 800 British workers, all while the profits of their owners DP World soared by 52% in the first half of 2021," she said.

"It is frankly a complete and utter scandal that a company should be behaving like this on British soil. To tell hundreds of workers on Zoom that they are going to be losing their jobs and then to try and physically remove them from ships when they have done absolutely nothing wrong. There is absolutely no financial situation that P&O could be in that could merit this kind of behaviour.

"Unions are advising that workers stay on the ships, but clearly there are really serious health and safety concerns. Agency security workers are working on wearing balaclavas and are handcuff trained. I'm fearful for the safety of the workers on the ships but they are doing everything they can to protect and fight for their jobs."

Aviation and maritime minister Robert Courts told the House of Commons that staff should take legal advice over what has happened.

"Reports of workers being given zero notice and escorted off their ships with immediate effect while being told cheaper alternatives would take up their roles shows the insensitive way in which P&O  approached this issue. A point I have made crystal clear to management when I spoke to them earlier this afternoon," he said.  "I am extremely concerned and frankly angry at the way workers have been treated today."

Sources suggested that the company which employs almost 4,000 workers and has 20 ships is to make hundreds of seafaring staff redundant and hire agency workers to operate its ships.

Union RMT, which said crew members were being "replaced with foreign labour" is demanding its members across P&O’s is threatening legal action against P&O, calling it one of the "most shameful acts in the history of British industrial relations".

"We've seen minibuses full of workers and security staff who have had handcuff training. This is how they plan to treat staff who show resistance," said Darren Procter from the RMT who said staff were given no warning.

P&O said its survival was dependent on "making swift and significant changes now", "In its current state, P&O Ferries is not a viable business. We have made a loss year on year, which has been covered by our parent DP World. This is not sustainable. Without these changes there is no future for P&O Ferries," it said.

"These circumstances have resulted in a very difficult but necessary decision, which was only taken after seriously considering all the available options. As part of the process we are starting today, we are providing 800 seafarers with immediate severance notices and will be compensating them for this lack of advance notice with enhanced compensation packages."

The First Minister Nicola Sturgeon said she had spoken directly to the chief executive of P&O and made clear her "utter disgust at this appalling treatment of its workers".

She added: "I made clear that the Scottish Government stands with these workers and will do everything possible to ensure fair treatment for them.

"I’m deeply concerned at P&O announcement - due to the importance to Scotland of the Cairnryan/Larne route obviously, but also the impact on 100s of workers. Fire & rehire is an appalling practice & offends the basic principle of fair work."

Scottish Trades Union Congress general secretary Roz Foyer said: “This is a damning, outrageous move from P&O and we offer our full support to the RMT Union and all their members.

“We cannot – and will not - permit hundreds of workers to be sacked on the spot to be replaced by cheaper labour whilst P&O scramble to remain viable."

The furore began at around 7.39am on Thursday when P&O said that it would be unable to run services for “the next few hours” ahead of a "major announcement".

Six hours later, it was repeating the same message.

Customers were told that they should arrive at the port as booked and that they would arrange to get them away on an "alternative carrier as quickly as possible".

The company that would become P&O was founded in 1837 after signing a government contract to transport post by boat between London and the Iberian Peninsula.