Government's warning to P&O Ferries over sacking of 800 staff is 'posturing'

ITV News Business and Economics Editor reports on the 'unacceptable' way P&O staff have been treated by the company and the consequences it could now face

Not one but two government ministers have written to P&O Ferries this evening, explicitly criticising the company’s behaviour and warning of grave consequences unless staff are reinstated and proper dialogue begins. As it happens, the letters were both addressed to an executive who left P&O in December but they also both spell out a determination to intervene and force a change of heart.

Grant Shapps, the transport minister, says firing 800 crew members on a Teams call was “completely unacceptable” and betrayed “undertakings the company gave not to change term and conditions”, in 2019. P&O hopes to restart operations with agency crews in the coming days - the Shapps’ letter suggests it may struggle.

Shapps says he has instructed the Martime and Coastguard Agency, the regulator, to “ensure that the new crews you have rushed through are sufficiently safe to go to sea”. In his letter, Kwasi Kwarteng, the business minister, refers to his “anger and disappointment”. He points out that P&O received “millions of pounds” of furlough support during the pandemic but now “does not appear willing to abide by the rules we have put in place to protect British workers”.

Kwarteng argues that large employers have a legal duty to consult unions and to notify the Secretary of State, via the Insolvency Service, of any plans to dismiss large numbers of staff. P&O does not appear to have done either of these things and Kwarteng’s letter spells out, and helpfully underlines, the consequences for the company if it is found to have broken the law. “Failure to meet the notification obligation is a criminal offence and can lead to an unlimited fine”. The letter sounds uncompromising and suggests that P&O’s decision to sack its workers may run into legal difficulties.

But the problem the government has is that none of the staff that P&O fired appear to have been employed in the UK. According to sources I have spoken to within the RMT and Nautilus unions, all 800 crew had contracts which had been issued in Jersey. An “offshore” employment model is, I’m told, common in the UK ferry industry. P&O, and other companies, issue contracts in places like Jersey, Guernsey and Singapore to avoid paying Employers National Insurance. Such contracts also tend to offer fewer protections for employees. The key question here is: where was the decision to terminate these contracts taken?

An industry source tells me: "I would be amazed if it was taken in the UK. There is no way P&O will have got this wrong. UK employment law won’t apply in this case. I think the government knows this, it’s just posturing." Interestingly, I’m told P&O has around 50 Dutch and French crews which weren’t dismissed yesterday because their Dutch and French employment contracts makes it much more difficult.