P&O Ferries offers £36m compensation to sacked staff

P&O Ferries has announced it is offering over £36 million in compensation to sacked staff, with 40 employees in line for packets of more than £100,000.

It comes after nearly 800 workers were fired without notice last week, sparking backlash from across the political spectrum.

The company said payouts would be linked to the period of service, and in some cases exceed £170,000.

It comes as a spokesman for Business Secretary Kwasi Kwarteng confirmed the Government had received a letter from P&O Ferries in response to his questions about the shock move by the 5pm deadline on Tuesday.

The total value of the settlement is £36,541,648, the company said.

Employees are also being given support to find a new job at sea or onshore.

The company added that 575 of the 786 seafarers affected are in discussions to progress with the severance offers.

A spokesperson for P&O Ferries 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.’

Meanwhile, MPs have said they are keen to question the P&O chief executive, Peter Hebblethwaite, about the situation.

Mr Hebblethwaite has been invited to attend an evidence session jointly held by the Commons Business, Energy and Industrial Strategy (BEIS) and Transport Committees on Thursday March 24, which will examine what options are available to Government and the workers who have lost their jobs.

In a statement, the committee chairs Darren Jones and Huw Merriman said: ‘From P&O Ferries, our members want to know why this action has been taken and how it can be justified.

‘From the Government and its agencies, we want confirmation that our laws are not being broken and safety is not being compromised on our ships.

‘This shocking story has raised questions about UK employment law, safety practices, the support of this business through a pandemic and the redress available.

‘We intend to hear from the key players about what they are going to do that means these workers are not left high and dry.’

The firm said it is paying (subject to settlement agreement) 2.5 weeks’ uncapped salary for each year employed rather than the statutory 1 or 1.5 weeks and up to 13 weeks’ salary in lieu of notice.

There will also be 13 weeks’ salary on top of this in absence of consultation.

Some employees are receiving 91 weeks’ pay and the chance of new employment, said the company.

Mick Lynch, general secretary of the Rail, Maritime and Transport union (RMT), said: ‘The pay in lieu of notice is not compensation, it is just a payment staff are contractually entitled to as there was no notice given.

‘The way that the package has been structured is pure blackmail and threats – that if staff do not sign up and give away their jobs and their legal right to take the company to an employment tribunal they will receive a fraction of the amount put to them.

‘The actions of P&O demonstrate the weakness of employment law and protections in the UK. P&O have flagrantly breached the law and abandoned any standards of workplace decency.

‘They have ripped away the jobs, careers and pensions of our members and thrown them on the dole with the threat that if they do not sign up and give away their rights they will lose many thousands of pounds in payments.

‘This is totally unacceptable and RMT will continue to campaign for our members to be reinstated at P&O and for better employment laws to protect all British workers.’

The Government has threatened to criminally prosecute and impose unlimited fines on P&O Ferries if the operator is found to have broken labour laws. 

Business Minister Paul Scully told the BBC’s Radio 4 Today programme: ‘If they have flouted the notification law where they are supposed to tell the Secretary of State when they are going to make more than a hundred people redundant, then there are criminal sanctions involved in that, including an unlimited fine.

‘We have reserved the right to approach the prosecuting authorities should that be the right thing to do.’

Mr Scully said Transport Secretary Grant Shapps was reviewing all Government contracts and dealings with the company and its owners, DP World, adding: ‘They need to realise that the relationship between the companies and the Government has changed as a result of their absolutely callous [conduct]’.

Asked if that could include a £25million subsidy to DP World to help develop London Gateway as a freeport, he replied: ‘We will look into all of these things as part of this.’

Tory politicians are demanding that the Government consider scrapping its relationship with DP World, with Conservative peer Baroness Roz Altman telling the Today programme: ‘I think what P&O Ferries have done is absolutely disgraceful.

‘I feel so sorry for those 800 seamen who were loyal to P&O who were sacked by video, escorted of their ships, no warning, and I think that the Government should think very carefully about forcing the employer to behave better, and if that means that they have to impose any kind of sanctions or warnings to them, I think that would be entirely appropriate.’

P&O Ferries has replaced the 800 sacked staff with £1.82-an-hour foreign agency workers from India, the Phillipines and war-hit Ukraine.

The company has until 5pm today to respond to Mr Shapps and Business Secretary Kwasi Kwarteng’s scathing letter over the mass redundancies. The Transport Secretary said he had instructed the Maritime and Coastguard Agency (MCA) to carry out inspections of all P&O Ferries vessels before they return to sea to check the new crews the company has ‘rushed through’ are safe.