Grant Shapps: P&O faces criminal prosecution over 'no notice' firing of 800 staff

UK ministers have been accused of endorsing P&O's plan in a memo sent across Whitehall before the sackings of its staff.

Mr Shapps spoke out as demands were made for legal action as claims emerged that P&O hired foreign agency workers for as little as £1.82 an hour to replace sacked 800 staff - with some temps living in tents.

Unions have raised concerns over the "exploitative practice" as they told of the low payments, saying they were expected to work huge 12-hour shifts for eight weeks at a time.

The 800 workers were fired with no notice through a view message - with reports some staff were removed from ships in handcuffs.

In the UK, when 100 or more employees are proposed to be made dismissed, a 45-day consultation has to take place and collective redundancy rules apply and the business secretary has to be notified.

A failure to comply is a criminal liability.

P&O say that the sacked staff were Jersey-contracted seafarers, while three years ago the company said it was shifting the registration of its UK vessels to Cyprus ahead of Britain’s departure from the European Union. It has raised questions over whether the depth of their legal employment rights in the UK.

P&O, which has received over £50m in UK government contracts and subsidies in two years suspended its services on Thursday before axing the staff.

Services between Cairnryan to Larne, Dover to Calais, Dublin to Liverpool and Hull to Rotterdam were to be out of action for between seven and 10 days.

Mr Shapps said they would now consider whether to outlaw fire and rehire practices after a review.

"We have asked the Insolvency Service to look at the notification requirements and consider if further action is appropriate, especially if, as we are concerned, the relative notice periods weren't given and I can inform the House that that would be a matter for criminal prosecution and unlimited fines as well," he said.

He said the government is reviewing all government contracts with P&O Ferries and its parent company Dubai-based DP World "as a matter of urgency" and "where possible" look to use other providers."

"We're considering further steps that we can take to remove P&O's influence from British maritime including positions on key advisory boards, because again, I do not want to see that company with the way the management has behaved, advising the way that British maritime is shaped and rolls out.

He said to P&O: "Please repair some of the damage done last week by fully engaging in a true dialogue with seafarers and trade unions.

"We'll make sure we send a powerful message to every other employer in this country that such disgraceful treatment of workers will never be tolerated again."

P&O attributed the move to £100 million of losses built up during the pandemic, although DP World, reported record profits this month of £2.9bn.

The memo said the company's now widely condemned move would "ensure (it) remains a key player in the UK market for years to come through restructuring".

Apparently written by a senior official, it talked about the re-employment of staff on "new terms and conditions" and mentioned agency staff.

It added that the move would "align" P&O Ferries with other companies which had "undertaken a large reduction in staff".

Armed with the memo, Louise Haigh, shadow transport secretary demanded that government takes action to outlaw the so-called fire and rehire staff accused ministers of failing to act on what she called a "national scandal".

The memo reportedly said: "We understand that P&O Ferries have an intention to try and re-employ many staff on new terms and conditions or use agency staff to restart routes; they estimate disruption to services lasting 10 days."

Ms Haigh said the memo was no "vague outline" it was the "game plan of P&O".

"It not only makes clear that the government was made aware that 800 seafarers were to be sacked, it explicitly endorses the thuggish fire and rehire tactics that P&O had clearly discussed with the department ahead of Thursday.

"There is no indication nothing in this memo at all, that expresses any concern, ny opposition, raises any alarm about the sacking of 800 loyal British workers. This is the clearest proof that the government's first instinct was to do absolutely nothing."

Mr Shapps said only a small number of officials were contacted by P&O management during the late afternoon, and they had completed a "write up" of it.

But he said the first he knew of the scale of what was happening was shen he stood at the Commons despatch box on Wednesday evening.

"Of course, we understand the financial pressures that many businesses face right now and regretfully sometimes redundancies are inescapable, but there is no excuse, no excuse for what we saw occur last Thursday," he said.

"No consultation with the workforce, no consultation with the unions, and the first time I heard about it was 830 in the evening, not through the memo, which I did not see, but instead, through communication with my private office to indicate that P&O would be making redundancies the next day now.

"I was stood at this despatch box when I was passed a note about redundancies taking place and it was with considerable concern that I saw how the company was deploying those redundancies by the method of a pre recorded Zoom."

Ms Haigh said: "We cannot allow British workers and this country to be taken for a ride. But the truth is that P&O Ferries and DP World did this precisely because they thought they could get away with it. They knew they could exploit the UK's shamefully weak employment law. They knew the investments that government have with them would be prized more highly than the livelihoods of 800 people.

"And they knew that when they did what they did, the government would not stand in their way. The impotent response so far for ministers shows that they were right "They have set back and allowed this to happen.

She added: "And it is nothing short of a scandal that this Dubai owned company, which received millions in taxpayers money during the pandemic can tear up the rights of British workers, all while their profits soared by 52% last year. This cannot, it must not stand."

The Department for Transport (DfT) said the document was sent "before ministers were advised of the full details".

It said in a statement: "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 and as soon as they were informed, they made clear their outrage at the way in which P&O staff had been dismissed.

"It is clear from the memo that our immediate priority was to work with unions to ensure workers' rights continue to be protected and the transport secretary has urged the company to sit down with workers and reconsider this action."

Seafarers hired to replace sacked P&O Ferries crews were being paid salaries as low as 2.38 US dollars (£1.81) an hour, the Rail, Maritime and Transport union (RMT) has claimed - well below the minimum wage of the UK, which for people aged 23 and above is £8.91 per hour.

P&O say they are compensating all 800 Jersey-contracted staff for lack of notice with enhanced severance packages and it is understood they have a deadline of Thursday to accept or reject them.

It has denied that their actions have put the safety of ships at risk and says  wage figures cited were wholly inaccurate but could not say what they are actually being paid. 

Companies using UK ports often register ships in other countries, allows them to pay lower wages.

In 2019, P&O said it was shifting the  registration of its UK vessels to Cyprus ahead of Britain’s departure from the European Union, in part to keep its tax arrangements in the bloc.

Questions have been raised about the employment rights of the seafarers as as they were all Jersey-contracted.

P&O have confirmed that their new recruiting agency partner is a Malta-based company called International Ferry Management which has one registered director, Antonio Ciriale, who applied to become director and was set up on February 11.

RMT general secretary Mick Lynch claimed the staff replacement with cheaper labour was unsafe.

He said: “We don’t believe it’s safe to bring a crew that’s never even seen the vessels and get them to run them a few days after they’ve been introduced to them.”

The general secretary of the RMT was speaking ahead of a parliamentary debate about P&O Ferries’ decision on Thursday to make 800 crew redundant and swap them for cheaper agency staff.

Mr Lynch said: “We’ve got to see a situation where our people are put back on board those ferries so they can run them safely, and that this injustice is put right.

“If they’re not prepared to maintain standards and employ British workers on British ferries, then something’s got to be done.

A spokesman for the company said: “Safety is the utmost priority for P&O Ferries and our crewing management partners.

“They have recruited high-quality experienced seafarers, who will now familiarise themselves with the ships, going through all mandatory training requirements set out by our regulators.

“Safety is paramount in our new crewing management model, which is used by many of our competitors and has been proven to be the most successful model in this industry and the competitive baseline.

“We will not be reducing crewing numbers. We don’t have a business if we don’t have a safe business.”

P&O Ferries has refused to comment on the pay of agency workers.

When the firm informed staff on Thursday they were losing their jobs, it told them it was aiming to halve crewing costs.

Protesters gathered outside the London offices of P&O Ferries owner DP World on Monday afternoon, before marching to Parliament.

Mr Lynch accused the logistics business of refusing to meet him and his counterparts at unions Nautilus and the TUC, who all attended the demonstration.

He said: “This company are quite happy to sack our members by Zoom but they are not prepared to meet us face to face. That speaks volumes about their complete contempt for their staff.

“We will continue to use political, industrial and public pressure to secure justice for the P&O workforce and we are at Parliament today to step up that campaign.”

Labour has called on the Government to suspend contracts with DP World until the matter with P&O Ferries is resolved.

On Friday afternoon, Mr Shapps and Business Secretary Kwasi Kwarteng mistakenly sent strongly worded letters to a man who is no longer chairman of P&O Ferries.

Mr Kwarteng later corrected his error. His letter to Peter Hebblethwaite, current CEO of P&O Ferries, said the company "appears to have failed" to follow the process for large-scale lay-offs, including negotiations with employee representatives, and called for P&O officials to answer 10 questions by the end of play on Tuesday.