Wednesday, March 30, 2022

As the Sacked Ferry Workers Row Continues All Sides Debate the Key Points

Should a Director Look After the Company or the Minority of Staff?
Shipping News Feature

UK – The case of the dismissal of almost 800 seafaring staff by P&O Ferries unsurprisingly continues to dominate the local headlines. The issue will doubtless have ramifications for months or years to come, turning as it does normal employment procedure on its head.

What is certain is that, despite the company clearly committing a totally unreasonable, if not illegal act, by sacking the crews without recourse to any form of discussion or arbitration, there seems to be no sign of regret from the DP World owned employer. And might it not be the case that many company directors will be whispering behind their hands along the lines of ‘well what else were they supposed to do’?

The answer to that might well be act a little, or a lot, sooner. Accumulating a debt of £200 million over two years could be said to be beyond careless, although doubtless the Covid card, despite government assistance paid out, would be played. So what exactly have the parties involved, P&O Ferries, DP World, the government and a variety of unions been saying as the case develops.

Let us start with that letter from the P&O boss, CEO Peter Hebblethwaite to Grant Shapps on the 29th March. He said in full:

Dear Secretary of State, Thank you for your letter dated 28 March 2022.

As I stated at the Select Committee session last week, we carefully considered all feasible options and painstakingly explored all possible alternatives. Still, we concluded that we had no choice but to act as we did for compelling business reasons. Had we failed to do so, we would have risked the entire company collapsing with the loss of 3,000 jobs.

Therefore, regretfully, we had no choice but to make 786 of our colleagues redundant without following due process. For this, we are correctly and promptly compensating those crew who have left our employment.

You have asked me to reverse our decision and ‘offer all 800 workers their jobs back.’ Unfortunately, this ignores the situation’s fundamental and factual realities. Firstly, the circumstances which led P&O Ferries to make the decision in the first place still apply. Complying with your request would deliberately cause the company's collapse, resulting in the irretrievable loss of an additional 2,200 jobs. I cannot imagine that you would wish to compel an employer to bring about its downfall, affecting not hundreds but thousands of families.

Secondly, of the 786 redundant crew, over 765 have taken steps to accept the settlement offer. Of these, over 500 have now accepted and signed settlement agreements, including 67 officers who have either accepted the offer to work with the new crew provider or are in process. These are legally binding agreements, and crew members who have entered them will rightly expect us to comply with their terms. Accordingly, we cannot offer a change to the 31 March deadline for our redundancy offer to seafarers.

We recognise that Parliament is entitled and empowered to introduce laws it deems appropriate, as is in its gift. Moreover, we welcome the Government’s commitment to increasing the minimum wage for all seafarers working in British waters. We have never sought to undermine the minimum wage regulations. Indeed, from the outset, P&O Ferries has called for a level playing field regarding salaries on British ferry routes.

The crewing model we have adopted is relevant for 80% of the global shipping industry and is common amongst our competitors. The adoption of a flexible crewing model will allow us to meet the demands of our customers whilst remaining commercially competitive. It is important to emphasise that most of the anticipated savings arise from the removal of job duplication and the benefits of increased flexibility, not from reducing wages.

Please note that even if the national minimum wage were to be applicable, the need to adopt a different crewing model would not change. Under this model, crews are paid for the actual time they work (plus holidays) rather than the previous model in which crews were granted full pay for working 24 weeks a year. That model is unsustainable in the current and very competitive operating environment. I would welcome the opportunity to explain this crewing model in greater detail.

I have endeavoured to present the facts in this letter and before the Select Committees with absolute candour and transparency. This includes the tough choices we faced and the consequences for our workforce, both those facing redundancy and the thousands who remain employed. We have made this difficult decision in the knowledge that it would be highly unpopular and, for some, difficult to reconcile. I reiterate my great distress that no other options could be identified, and I profoundly regret the pain caused to so many dedicated P&O Ferries employees. I can further assure you that I am fully cognisant of the reputational cost to the P&O Ferries brand and me personally.

That notwithstanding, I am compelled to discharge my duties for this historical company, saving the jobs of the 2,200 dedicated employees who continue working for P&O Ferries and providing for the effective operation of the trade routes upon which this country depends. I will therefore continue to do my utmost to ensure that this company has a sustainable business for the future.

Yours sincerely, Peter Hebblethwaite CEO.

As we have reported previously P&O have used the services of a third party overseas agency to offer key crew members job security and sizeable bonuses to stay in post for two years or more, thereby protecting the quality of its services.

And so to the reaction, the Secretary of State has responded today with nine proposals, unsurprisingly with the main focus on ships which call at UK ports having crews paid to the country’s minimum pay standards. He also proposed official ‘minimum wage corridors’ between the UK and agreeable other nations. He is also expected to press the Insolvency Service to ensure the P&O CEO is banned from holding any directorship.

However many consider this more government bluster. If Hebblethwaite (basic salary some £325,000 per annum) is quizzed by the Insolvency Service his defence that to not dismiss the 800 would cause the company’s demise might meet with acceptance if not approval as his job as a director is to protect the company and the bulk of the staff.

A note of conciliation came from the UK Chamber of Shipping which said in a statement:

“The ferry sector has faced huge challenges during the pandemic and we understand that P& O Ferries faced an incredibly difficult commercial situation. The Chamber does not condone how P&O Ferries dismissed 800 seafarers without consultation. Following this afternoons announcement by the Secretary of State we are working closely with the Department for Transport, our members and other stakeholders to create a commercially viable UK model for our international ferry services. We must establish and agree with all stakeholders a construct which ensures a level playing field, to allow fair competition between UK ferry operators.

”On this foundation they will be able to deliver quality training jobs for seafarers and quality services for their passengers and freight customers. Our priority now is to support our members in seeking to stabilise ferry operations ahead of a busy season, when services have been hit significantly by vessels that are currently out of operation. And we will analyse and respond continuously as we fill in the detail and better understand the measures which are being introduced.”

Mention of vessels out of operation does not necessarily mean those stopped from sailing by the owners however. Since the sackings were announced P&O ships have been prevented from sailing by the Maritime and Coastguard agency (MCA) which has suddenly discovered faults in not one, but two, of the company’s vessels so as to prevent them from sailing, with the Pride of Kent held in Dover and the European Causeway tied up in Northern Ireland for breaches in safety and documentation matters.

And so to the unions reactions, whilst Nautilus International gave its usual measured response one could almost hear General Secretary of the RMT Mick Lynch’s blood pressure rising as the days passed. On the 28th March he said:

"The seizing of the Pride of Kent by the MCA this evening should be adequate evidence for the Government that the gangster capitalist outfit P&O are not fit and proper to run a safe service after the jobs massacre. It's rare enough for the MCA to impound a ferry but P&O have now had two in a week after the jobs carve up which speaks volumes about the dire state of their operation. It's now high time for these important vessels to be taken over under public control with the sacked crews reinstated as the only way to get these crucial ferry routes back running safely.

"RMT is meeting with DFDS, Stena and the DfT today to discuss the ongoing crisis from P&O's illegal dismissal of its crews. P&O need to immediately withdraw the false and arbitrary deadline for staff sign-up this Thursday 31st. The sacked workers have to be reinstated and we need regulation and legislation to secure UK-based seafarers' jobs and agreed contracts of employment."

He followed up on the 29th, having seen the correspondence from P&O with:

“The latest letter from Peter Hebblethwaite is a direct challenge to the legal framework and government authority in Britain. The diabolical arrogance that is on display by P&O Ferries is equivalent to highway banditry and must be opposed. This whole rotten fiasco shows why the government must step in, take over the running of P&O, and reinstate all 800 sacked staff with no loss of pay.”

As is so often the case, the government’s reaction to the whole affair has embittered Mr Lynch and his response to the proposals today to curb such activity were concise, as he stated:

"Despite all the bluster, Grant Shapps has failed to grasp the opportunity to adequately stand up to the banditry behaviour of P&O. The Prime Minister repeatedly said to parliament that the Government would be taking legal action save British seafarers’ jobs but he has failed to keep his word.

“This continued lack of action and courage has meant a ferry company owned by the Dubai royal family has been able to break our laws and disrupt our ports and ruin people’s lives with impunity and we will keep pressing the government to ensure justice for our members. What has been announced today is far too little, far too late and we are calling for urgent action for speedier more radical reforms to save the UK seafarer from oblivion.”

The RMT response followed a meeting yesterday in which the union, together with Nautilus International, met with government to lay out their proposals for a ‘Fair Ferries Strategy’, a proposal which, if adopted, they say would ensure the outrageous actions by P&O Ferries can never be repeated again.

The Fair Ferries strategy would require legislation for an industry wide ‘fair ferries national framework collective bargaining agreement’ with a certification approval process to enforced by the Maritime and Coastguard Agency. This would ensure all ferry operators in the UK are required to work with UK social partners and apply as a minimum the agreed framework. Nautilus general secretary Mark Dickinson said:

”On any other day this would feel like a victory for our long running campaign for pay fairness in the UK ferry sector both domestically and internationally. But today, when we had high hopes for legislative measures to tackle P&O Ferries’ illegal actions, it falls someway short.

”P&O Ferries are already extolling that extending the UK National Minimum Wage to international ferry routes will not cause them to change direction and that their cheap labour agency-based crewing strategy will remain intact. The company has achieved its objective and our members, and the safety of passengers and freight will be the casualty.

”We broadly welcome all the measures in the package announced today, and the proposal for NMW corridors with neighbouring countries is encouraging. We urge the Secretary of State to prioritise the achievement of this proposal and to ensure the NMW is enforced in the ferry sector with the support of the countries of destination.

”We also welcome action against the company’s chief executive Peter Hebbelthwaite, it is clear he is not a fit and proper person but we had also hoped for action against other members of the P&O Ferries board of directors and for details of how the government plans to ensure that fire and rehire is outlawed, how the government can injunct a company, and levy unlimited fines, when they transgress UK employment law.”

And so one worders if suddenly the US Jones Act may look a little less restrictive in its practices than it has before to so many UK advocates of 'free trade'.

Photo: Pride of Kent in happier times.