P&O Ferries still paying crew less than £5 an hour two years after government pledged minimum wage

A joint investigation between ITV News and The Guardian found contracts and payslips which show P&O Ferries is still paying some crew less than £5 an hour, ITV News Business and Economics Editor Joel Hills reports

P&O Ferries continues to pay some of its crew less than half the UK minimum wage thanks to a gap in legal protection for seafarers, which the government promised to close.

On March 17, 2022, the company sacked 786 of its staff without warning and replaced them with agency workers who it said earned an average hourly rate of £5.50 an hour.

P&O admitted it had broken employment law by failing to consult the unions but insisted it had no choice as it needed to save money to avoid bankruptcy.

At the time, the company’s actions were widely condemned.

Grant Shapps, who was Transport Minister, accused P&O of behaving like “pirates of the high sea” and pledged to compel the company to pay UK minimum wage, which is £10.42 an hour and will rise to £11.44 an hour next month.

But while the Seafarers’ Wages Act became law last year, the secondary legislation that is necessary to implement it has not yet been laid.

ITV News and The Guardian have seen contracts and payslips from between December 2023 and March 2024, which show that P&O is still paying some crew less than £5 an hour.

To find out what it’s like to work onboard a P&O ferry, we posed as passengers and filmed undercover on the company’s three ships, which operate non-stop across the English Channel between Dover and Calais.

We spoke to more than a dozen crew whose identities we are protecting.

All of them told us they routinely work 12 hour shifts, seven days a week, for up to 17 weeks at a time, without a day off and without permission to leave the ship

“It’s the same place, the same people, you cannot go outside,” one crew member told us. “You go crazy. Every day it’s sleep, work. Sleep, work. That’s it”.

One crew member said the experience was “like [being in] a jail”.

The documents we examined were from workers from developing countries. The crew were employed by PhilCrew Management, a recruitment agency based in Malta.

The average hourly rate was £4.87 an hour.

P&O hires crew from a variety of countries, including India, Philippines, Indonesia, Honduras, Mauritius, Malaysia, Georgia, Serbia, Latvia, Russia and Ukraine.

Many crew told us they found it exhausting to work 84 hour weeks for several months at a time and that they missed their families.

As it stands, P&O’s conduct is entirely legal. Credit: PA

But many also said the rates of pay on offer at P&O were better than those on other international cruise or cargo ships they had worked on.

“[In my country] you cannot find a salary like this,” one said.

“You need to work,” another crew member confided. “When you have a family, you need to work”.

As it stands, P&O’s conduct is entirely legal.

The company is exploiting a gap in the law that means it is not required to pay the minimum wage to seafarers who work on foreign-registered ships that sail in international waters and are employed by agencies outside the UK.

Two years ago, the government said it would change the law.

On March 28, 2022, Mr Shapps wrote to the chief executive of P&O, Peter Hebblethwaite and promised “this government will not stand by while the requirement to treat seafarers with due respect and fairness is brazenly ignored”.

On April 27, 2022, Mr Shapps told the Commons Transport Select Committee P&O Ferries would need to do three things “to get out of this mess”: pay its crew the UK minimum wage; give back the £11 million of furlough money it received from the government during the pandemic and sack Mr Hebblethwaite.

As yet, none of these things has happened.

Mr Shapps also pledged to review government contracts with P&O and its owner DP World. He also ordered the Insolvency Service to investigate the actions of both the company and its directors “as a matter of urgency”.

A parliamentary question by Labour has since revealed that the government has paid $291 million (approximately £228 million) to both companies since the dismissals.

Last summer, the Insolvency Service decided not to pursue criminal proceedings. It tells us its civil investigation “remains ongoing and is making good progress”.

In its last set of accounts, P&O Ferries said it believes there is ”a less than remote possibility” of any sanction, as a result of the Insolvency Service’s work.

P&O Ferries said it needed to sack its crews because the business was on the verge of bankruptcy and needed to cut its costs.

Industry insiders tell us that by dramatically reducing its wage bill, P&O has also been able to lower its prices and gain a competitive advantage over its rivals.

In 2023, P&O’s freight and passenger traffic increased sharply between Dover and Calais - the UK’s busiest ferry route.

According to data from Freightstat, P&O won business from the ferry operator DFDS and Eurotunnel - both companies which pay the UK minimum wage.

P&O told us the company is “now on track to be profitable”. The company’s accounts for the year ending December 2022 are more than two months overdue at Companies House - a delay that constitutes a criminal offence.

P&O says the accounts will be filed “imminently”.

The evidence we have seen shows P&O is still paying some crew less than the £5.15 an hour which the company had previously suggested was the lowest hourly rate.

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In a statement, P&O Ferries told us that none of the its crew on the Dover-Calais ships earns “less than $2,400 per month, equivalent to £5.20 per hour, in line with international recommendations.”

The statement added: “We always pay at least the minimum wage required by national and international law.

“In addition to wages we provide all meals, modern accommodation, gym and sauna, and travel to and from their home country including flights for international workers coming onto our ships.

“We provide an industry-leading support package and work hard to ensure their welfare, wellbeing and mental health are properly cared for.

“The tough but necessary changes we made to the business [in March 2022] mean that P&O Ferries and 2,200 jobs have been saved.”

A spokesperson for the Department for Transport told us. "We acted swiftly and decisively against P&O Ferries’ appalling treatment of its staff and have made substantial progress to improve pay and conditions.

“We have since brought forward legislation, the Seafarers’ Wages Act, to ensure seafarers are paid at least UK National Minimum Wage, and working alongside international partners – including. France – we continue to further strengthen their rights around the world.”

The government says the final consultation on the secondary legislation required to implement the Seafarers’ Wages Act closed on 14 March and the regulations will be brought into force in the summer.

Neither Mr Shapps nor PhilCrew Management responded to our requests for comment.

Two years ago, P&O Ferries took a risk.

The company knew that illegally sacking staff would be controversial but it gambled that the shock and the anger would fade.

Today, bookings are up and overheads have been reduced. P&O’s gamble appears to have paid off.

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