P&O Ferries - mass redundancies without consultation

[maniacmartin]

It seems ridiculous to me that the law is such that a ferry that spends its entire life in british and french waters can be allowed to be flagged in a third country and have employment contracts drawn up in yet another. This whole hands off approach to regulation leads to a race to the bottom.

The graph in post 295 is as I expected. Not a "year on year" loss as they claim, but more likely to be a one-off bad year due to covid. I think profit would likely have picked up on its own accord now that the world is opening up again and people are travelling more.

Whilst the staff have suffered the most here, customers have too. I presume that P&O were still taking bookings for this 10 day period right up until they shut everything down, knowing that they had no intention of running the service. I have lost all trust in the company so will be taking my business elsewhere, as will everyone I have spoken to. That said, I fear that it might not make too much of a dent in their profits if it mostly comes from haulage who will likely go for whatever is cheapest. It's pretty sad as I have always been loyal to P&O in the past, choosing them over Eurostar, mostly for nostalgic reasons.

Also, regarding Dover's local MP Mrs Elphicke, listen to the end of the BBC video of the heckling a few times. I'm pretty sure she swears after she's turned her back on the camera as she walks off. I'm surprised no-one else picked up on that

 

[SamYeager]

The graph in post 295 is as I expected. Not a "year on year" loss as they claim, but more likely to be a one-off bad year due to covid. I think profit would likely have picked up on its own accord now that the world is opening up again and people are travelling more.

It seems very telling that they'd already had a big drop in profits from 2017 to 2018. I doubt there was an especially large pay increase for workers in that year. The small loss in 2019 was probably affected by the start of Covid lockdoewn. It really does seem as if P&O were already having problems well before Covid.

 

[paul1609]

I suspect that whilst the Channel is wholly within British & French territorial waters, the fact that both are signatories to the United Nations Convention of the law of the sea prevents either government excluding Foreign flagged ships.

 

[alangla]

It seems ridiculous to me that the law is such that a ferry that spends its entire life in british and french waters can be allowed to be flagged in a third country and have employment contracts drawn up in yet another. This whole hands off approach to regulation leads to a race to the bottom.

The Cairnryan to Larne ferries are registered in the Bahamas, but never leave the UK.
Also, state owned CalMac have their ferries crewed by a subsidiary in Guernsey. If the state owned operator is indulging in these sorts of practices...

Description of Calmac corporate structure including offshore crewing company - https://www.calmac.co.uk/corporate/about-us

 

[LNW-GW Joint]

I suspect that whilst the Channel is wholly within British & French territorial waters, the fact that both are signatories to the United Nations Convention of the law of the sea prevents either government excluding Foreign flagged ships.

Territorial limits are 12 nautical miles from the coast, so Dover-Calais fits your description.
Dover-Calais could therefore probably operate to a bi-lateral UK/FR treaty like Eurotunnel does.
But no other route on the channel fits within the 12-mile limit, so there will always be some international waters involved.

The UK and France have defined a boundary of their interests, roughly in the centre of the Channel.

France–United Kingdom border - Wikipedia

en.wikipedia.org

The border between the countries of France and the United Kingdom in Europe is a maritime border that stretches along the Channel, the North Sea and the Atlantic Ocean. The Channel Tunnel links the two countries underground and is defined as a 'Land Frontier', and not widely recognised as a Land Border.
It is defined by several international arbitrations from 1977, 1978, 1982, 1988 and 1991[1] for the maritime border and by the Treaty of Canterbury (1986) for the channel tunnel.

There are also juxtaposed controls for the short-sea crossings, by treaty.

 

[brad465]

The RMT Union are claiming the new workers are set to be paid the equivalent of £1.81ph, which if true is possible because the ships are registered in Cyprus, allowing avoidance of UK minimum wage:

New P&O crew on less than £2 an hour, union claims

The RMT union says Indian seafarers recruited to work in Dover are on rock bottom rates.

www.bbc.co.uk

Indian agency workers hired to replace P&O Ferries crews in Dover are being paid £1.81 an hour, a union claims.
The Rail, Maritime and Transport union (RMT) said the low pay was a "shocking exploitation" and "a betrayal of those who have been sacked".
P&O said the figure was inaccurate but said it could not comment on how much agencies pay workers on ferries.
Some of P&O's ferries are registered in Cyprus, meaning they do not have to pay the minimum wage required by UK law.
Firms using UK ports often register ships in other countries, allowing them to pay lower wages.
The minimum wage in the UK for people aged 23 and above is £8.91 per hour.

Transport Secretary Grant Shapps told Parliament: "Maritime employees have not, in this country, indeed throughout much of the world, received some of the same benefits and protections that exist otherwise for workers and this simply not good enough and it's a practice we have been seeking to end."
He added: "One of the many issues that we operate under is the fact that the UK operates under international laws that we are treaty members to, meaning that UK law doesn't apply in all circumstances.
"These complications allow for employers to take advantage in a way that we've seen I think with P&O Ferries.
"Which is why we will do all that we can to ensure that domestic law is applied in full absolutely everywhere around the country."
A spokesman for P&O said safety was the utmost priority and the new crewing management model was used by many competitors.
"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," he said.
Mr Shapps said he had asked the insolvency service to look at whether P&O followed notice period and consultation rules and said if they had not "that would be a matter for criminal prosecution and unlimited fines."
He said: "We are reviewing all government contracts with P&O and DP World with urgency."
Mr Shapps also told MPs P&O Ferries should remove British references from their ships if they replace sacked workers with non-UK staff.
The Spirit of Britain, Pride of Canterbury and Pride of Hull are among the names used for the operator's ferries.
The Transport Secretary told MPs it would be "completely inappropriate" for the company to "attach themselves to this country" without having British workers.

 

[Grumpy Git]

Being reported that Shapps was informed of the redundancies the day before. Did he "do a Boris" and not bother reading his notes?

 

[adamello]

because the ships are registered in Cyprus, allowing avoidance of UK minimum wage

It's one of the main drivers of shipping away from the UK Flag, Carnival Corp (Cunard, PO Cruises etc.) have stated that they would UK Flag all of their ships, but minimum wages would be a massive burden. It sounds horrific from our point of view, but remember the bulk of their crewing from East Asian countries (Philippines, Malaysia etc.) this could be fairly standard rates and not unexpected.

That said POCruises have flagged a couple of ships to the UK, probably to push those ships (Britannia, Iona) as 'British Cruise Ships'

 

[thejuggler]

I'm not sure registering cruise ships as British does tie them to UK minimum wage.

The majority of staff are still largely Asian/Far Eastern and they are generally employed through agencies in their home countries.

I've been on cruises and one time had some good conversations with our Indian room steward as he was from Goa, a place I've visited a few times.

Like he said it is hard work, but so is living in India for £20-40 a week working in a cheap hotel and sleeping on a bed behind the outside bar. He was looked after and well paid compared to home country, could keep the tips, with time off in places he would never see otherwise.

However 6 months doing 20 mile return trips between Dover and Calais for £1.80 an hour is a different proposition, so no idea how staff are managed on a day to day basis and whether they stay on board in staff accommodation.

 

[BayPaul]

I'm not sure registering cruise ships as British does tie them to UK minimum wage.

The majority of staff are still largely Asian/Far Eastern and they are generally employed through agencies in their home countries.

I've been on cruises and one time had some good conversations with our Indian room steward as he was from Goa, a place I've visited a few times.

Like he said it is hard work, but so is living in India for £20-40 a week working in a cheap hotel and sleeping on a bed behind the outside bar. He was looked after and well paid compared to home country, could keep the tips, with time off in places he would never see otherwise.

However 6 months doing 20 mile return trips between Dover and Calais for £1.80 an hour is a different proposition, so no idea how staff are managed on a day to day basis and whether they stay on board in staff accommodation.

Correct, British flag doesn't directly tie into minimum wage for non-UK employees, but there is some complex equal pay legislation that makes it complicated to employ a multi - national crew on different wage scales. That, combined with the inability to offer weddings at sea on a UK flag ship means there are very few UK flag cruise ships.

Generally, as you say, wages for Asian staff in particular are excellent for their own country, to the extent that it is very common to see highly qualified people (doctors, lawyers etc) working as cabin stewards on cruise ships.

Asian crew are much less common on ferries, as the lower wage costs tend to be outweighed by high travel costs, though it appears that P&O ferries are using Indian crew according to Media reports.

As discussed above, all P&O Ferries have good quality cabin accommodation (max 2 sharing, all en-suite with windows on an upper deck) for all crew, as well as good messrooms, gyms etc, so long contracts aren't necessarily a massive problem, though personally I would go insane spending more than a few weeks on the repetitive Dover-Calais route!

 

[Cletus]

P&O have crawled out of the woodwork

P&O's 'biggest compensation package ever' with some getting £170k+

P&O has said its compensation package is "the biggest ever" and some staff will get more than £170k, although others will get as little as £15k.

www.kentonline.co.uk

P&O has announced what it claims is “the biggest compensation package” in maritime history worth £36.5m, with 40 staff getting more than £100,000.

The under-fire cross Channel operator says 575 of the 786 sacked staff are in discussions to take up the offer.

Pay-outs are linked to the period of service and in some cases are more than £170,000, it said in a press release this afternoon.

The company, owned by Dubai-based DP world, sacked 786 staff over Zoom last week and then sent handcuffed trained security guards to escort them off the ships.


P&O says it is paying 2.5 weeks’ uncapped salary for each year employed "rather than the statutory 1 or 1.5 weeks" (capped at £544).

It will also give sacked staff:

• Up to 13 weeks’ salary in lieu of notice
• 13 weeks’ salary on top of this in absence of consultation period

And says some staff are receiving 91 weeks’ pay "and the chance of new employment"

P&O says no employee will receive less than £15,000.
A spokesman 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.”

 

[thejuggler]

£170k sounds impressive, but I hope P&O will also be paying for their tax lawyers to give some basic pointers on how to avoid the tax which could be due on a payment of £100k plus.

Apart from the first £30,000 of any redundancy, income tax and NI will be due on the rest of the payments and high income child benefit charge may also kick in.

 

[BayPaul]

£170k sounds impressive, but I hope P&O will also be paying for their tax lawyers to give some basic pointers on how to avoid the tax which could be due on a payment of £100k plus.

Apart from the first £30,000 of any redundancy, income tax and NI will be due on the rest of the payments and high income child benefit charge may also kick in.

Seafarers don't pay income tax in most cases, so this shouldn't be an issue.

 

[jamesontheroad]

One week later, and it seems from @POFerriesUpdate on Twitter that only Dublin-Liverpool is operating. Hull-Rotterdam, Larne-Cairnryan and Dover-Calais are all still suspended.

 

[Bletchleyite]

Does seem this has been their Gerald Ratner moment, doesn't it?

 

[LAX54]

If you use the flexible fare, the tunnel is the same price as P&O for the crossing, and of course if you want a slow crossing, feet up, or sleep, there is Harwich to the Hoek, depending where you are going in Europe not that much further to drive, if at all. (was checking a day crossing in March a few weeks back, including a cabin on a day run, with car an passengers £164)

 

[johncrossley]

When the Tunnel opened, did people think that ferries would still be heavily used 25 years later? Is there enough capacity on the Tunnel if all ferries from Dover to Calais and Dunkerque were scrapped?

 

[Bald Rick]

When the Tunnel opened, did people think that ferries would still be heavily used 25 years later?

used, yes, but not heavily

Is there enough capacity on the Tunnel if all ferries from Dover to Calais and Dunkerque were scrapped?

not without buying more trains, and possibly building more loading platforms.

 

[Bletchleyite]

used, yes, but not heavily

I'm slightly surprised it sustains more than one company, but freight and coaches like it because the hour-and-a-half sailing is enough for a legal rest break, whereas 40 minutes in the tunnel isn't, and tourists like it because it's a pleasant experience going on a boat if you aren't in a hurry.

 

[Ediswan]

I'm slightly surprised it sustains more than one company, but freight and coaches like it because the hour-and-a-half sailing is enough for a legal rest break, whereas 40 minutes in the tunnel isn't, and tourists like it because it's a pleasant experience going on a boat if you aren't in a hurry.

A big thing for me is that the ferries offer on-board catering. Though when P&O introduced 'night service' that benefit was significantly diminished.

 

[brad465]

Does seem this has been their Gerald Ratner moment, doesn't it?

This latest confession will cement that I think, with the P&O boss admitting to breaking the law:

P&O Ferries: Not consulting on job cuts broke law, boss admits

Peter Hebblethwaite admits P&O should have consulted unions before sacking 800 ferry workers.

www.bbc.co.uk

P&O Ferries boss Peter Hebblethwaite has admitted to MPs that a decision to sack 800 workers last week without consulting the unions broke the law.

He said there was "absolutely no doubt" that under UK employment law the firm was required to consult unions before making the mass cuts.

"We chose not to consult and we are, and will, compensate everybody in full for that," he said.

He said no union would have accepted P&O's job slashing plans.

 

[Bletchleyite]

A big thing for me is that the ferries offer on-board catering. Though when P&O introduced 'night service' that benefit was significantly diminished.

Even so, having taken one at about 3am with a Scout coach party, it was nice just to sit in a lounge area with a coffee and let the kids disappear off elsewhere for a bit.

 

[LNW-GW Joint]

£5.15 (agency crew) versus £9.50 (minimum UK wage) per hour seem to be the key numbers.
P&O claims the £5.15 is competitive with other international operators.
That would presumably not apply to domestic UK routes (eg Cairnryan-Larne).
I'd be interested to know what Stena and DFDS pay their crews, and if they are facing an existential threat like P&O.
If P&O Ferries were losing a fortune on their prior rates, you'd think the opposition would be in the same boat, so to speak.
There has been repeated past industrial disputes on the French Dover ferries (now DFDS), not so much on Stena, I think.

 

[Eyersey468]

This latest confession will cement that I think, with the P&O boss admitting to breaking the law:

P&O Ferries: Not consulting on job cuts broke law, boss admits

Peter Hebblethwaite admits P&O should have consulted unions before sacking 800 ferry workers.

www.bbc.co.uk

I have lost all trust in P&O now and will never use them again.

 

[Bletchleyite]

I have lost all trust in P&O now and will never use them again.

I think this is very likely to put them out of business, the very thing they were trying to avoid.

 

[Gloster]

I am afraid that I don’t think that this is likely to put P&O out of business. They may have a bad few months or even a whole summer season, but after that people will be back to, ”Which one’s cheapest?” They might just have to close or downgrade a route, but that is about the worst that will happen. They are probably working on the principle that a few short term losses for the owners will lead to long-term savings.

Their biggest threat is this country’s general economy and relationship with Europe. If that all goes down the pan, they may be better placed than their competitors to adjust to the new circumstances.

 

[thejuggler]

The whole 2 hour session of the Committee is on Youtube skynews channel.

The first to be questioned were various barristers and lawyers and whilst it is probably the case that numerous employment laws were broken (and admitted later by the CEO), it was easy to price in as the sanctions for doing so are defined and have upper limits in terms of recompense for the staff.

Whether they broke the law by not serving paperwork to Government in advance (which under UK law is a criminal offence with unlimited fine), isn't known as it gets messy legally very quickly due to UK, Cyprus, Bahamas and Bermuda government all being involved. Even then an unlimited fine is nothing when the ultimate holding company is worth trillions.

Assuming they can cover losses for another couple of years, remember DP World have ports in the UK with Government contracts, the gamble will pay off.

 

[357]

Those thinking this will put them out of business - who remembers the Wetherspoons boycot after COVID?

 

[Tetchytyke]

I think this is very likely to put them out of business, the very thing they were trying to avoid.

Depends.

If regular holidaymakers stop using P&O then, to a large extent, meh.

If logistics firms stop using P&O, they're screwed.

IMO what is more likely to do for P&O is the fact their actions have caused two weeks of delays and disruption to logistics firms, not what they've done to their staff. And the fact they deliberately caused this disruption, knowing it would cause disruption, won't go down well with logistics firms who've borne the brunt of the resultant losses.

I'm surprised DFDS were so happy to dig them out of that hole, tbh.

 

[Bletchleyite]

I'm surprised DFDS were so happy to dig them out of a hole, tbh.

Agreed. Interestingly Stena appear to have told them to get lost with regard to the Scottish route.