The chief executive of P&O Ferries has admitted that the company broke the law by failing to consult unions “in good time” ahead of announcing its decision to sack 800 staff members with immediate effect over Zoom.
Representatives of P&O and parent company DP World were grilled by the House of Commons transport and business committees today amid the fallout from the mass redundancies.
Labour MP and business committee member Andy McDonald asked P&O chief executive Peter Hebblethwaite: “Did P&O have a duty to consult the unions in good time over the redundancies?”
Hebblethwaite replied: “There is absolutely no doubt that we were required to consult with the unions. We chose not to do that.” McDonald interrupted to ask: “You chose to break the law?”.
Defending the decision, Hebblethwaite said the company chose not to consult unions “because we chose not to consult and… we are [compensating] and will compensate everyone in full for that”.
The Labour MP said: “You haven’t escaped the law of this country. You’ve still got to do it within the legal framework. You can’t just decide that you’re gonna absent yourself from the legal system of the United Kingdom.”
In response, the CEO explained: “It was our assessment that the change was of such a magnitude that no union could possible accept our proposal”. McDonald said he had “never heard such farcical answers to a series of questions”.
Business committee chair Darren Jones, a Labour MP, began the session by asking Hebblethwaite: “Are you in this mess because you don’t know what you’re doing, or are you just a shameless criminal?”
The CEO revealed that his basic salary is £325,000, plus performance-related bonuses. “If your employers are, might I suggest, mad enough to offer you a performance related bonus, will you accept it or reject it?” the MP asked. Hebblethwaite said he did not know the answer.
DP World chief operations officer Jesper Kristensen said of the need for the redundancies: “P&O Ferries has definitely lost a lot of money over the last few years. No business can sustain that forever. The business was not viable.”
Jones replied that “lots of other businesses in trouble follow perfectly legal routes”, adding that Kristensen seemed to have “no regrets” about the decisions taken by his business.
Kristensen stressed that “you have not heard me say that we have no regrets”, adding: “We acknowledge the pain that this has caused to a lot of people, employees, seafarers, their families, et cetera.”
Asked about how much the replacement crews will be paid, Hebblethwaite said the average hourly rate is £5.50. He said: “On the routes that are international routes, that are governed by ITF standards, we are paying above ITF minimum wages.
“On our domestic routes… where we are governed by national minimum wage, of course we are paying national minimum wage.”
Labour MP Andy McDonald clarified that this meant crews on board boats leaving Dover would be paid an average of £5.50 per hour, asking: “That’s below the national minimum wage of this country – how do you reconcile that?”
Hebblethwaite replied: “Where we are governed by national minimum wage, we will absolutely pay national minimum wage.” He claimed that the same business model was used throughout the sector.
McDonald asked: “Could you live on it, Mr Hebblethwaite? £5.50 an hour? Could you sustain your lifestyle on £5.50 per hour?”
“No you couldn’t, could you,” the Labour backbencher said. “Why do you expect people who’ve got such responsible jobs to be able to do that? How do you expect them to be able to feed their families and pay their bills?”
Hebblethwaite told the committee that Transport Secretary Grant Shapps was informed of P&O’s plan in a meeting in Dubai on November 27th, although he stressed that the details were far from finalised at that time.
The Department for Transport sources have described the assertion that the government knew the highly controversial intentions of the company back in November as “categorically untrue”.
Commenting on the claim by P&O, Shadow Transport Secretary Louise Haigh said: “Grant Shapps has huge questions to answer. He was told in a meeting in Dubai of P&O’s plan to change their business model.
“That model meant brazenly breaking the law to sack loyal workers to pay destitution wages. He must come clean and publish the record of that conversation.”
"Are you in this mess because you don’t know what you’re doing, or are you just a shameless criminal?"@CommonsBEIS chair @darrenpjones quizzed P&O Ferries chief executive Peter Hebblethwaite on why he did not consult unions before sacking 800 workers pic.twitter.com/vQC74hvdyM
— PoliticsHome (@politicshome) March 24, 2022
"There's absolutely no doubt that we were required to consult with the unions. We chose not to do that," P&O Ferries chief executive Peter Hebblethwaite tells MPs, after sacking of 800 workers
— BBC Politics (@BBCPolitics) March 24, 2022