In an era when many companies trumpet their commitment to treating all stakeholders fairly, some are all too ready to do the wrong thing. Everything about P&O Ferries’ sacking of 800 crew last week — the brief video statement, the coach loads of waiting replacement agency workers, the security contractors standing by — suggests it was meticulously orchestrated. Only the seafarers themselves had no prior warning. The UK government has asked the Insolvency Service to investigate whether P&O breached employment law. Whatever the precise legalities, P&O and its owner, Dubai’s DP World, appear to have made a cynical calculation to rapidly shrink the ferry operator’s cost base by ignoring contemporary British standards on how to treat employees — and their implicit contract with broader society.
In laying off 800 UK-based seafarers with immediate effect and no consultation, P&O showed contempt, too, for British taxpayers, who provided it with £10mn in furlough support in 2020; the company also received £4.4mn through a government contingency plan to keep cargo flowing. DP World paid £270mn in dividends to shareholders that year. P&O’s actions also demonstrated scant regard for safety — with agency workers suddenly expected to take on skilled work on some of the world’s busiest shipping lanes — or for the resulting supply chain disruptions.
A company as large as P&O, responsible for about a third of the cross-channel ferry market with France, will no doubt have taken legal advice before its announcement. UK law stipulates a minimum 45-day consultation period when a company makes more than 100 employees redundant. This is aside from the collective bargaining arrangement P&O had with Nautilus International, the seafarers’ union, which has announced a formal dispute. According to unions and an internal P&O letter, the 800 sacked crew were on Jersey-based contracts. But Nautilus has claimed their jobs still fell under UK law and protections since this was the jurisdiction specified in their contracts. Some employment lawyers also argue UK statutory protections should apply if Britain was the place of employment.
For employees, however, a UK employment tribunal would probably take a year to be heard, and they would initially bear the costs. P&O seems likely to have reckoned that, in a looming cost of living crisis, most employees would accept a package similar to what they might achieve at a tribunal, if successful, and move on. A company losing £100mn a year, hit first by the pandemic and now by inflation and soaring fuel prices, needs to restructure. But this is no way to go about it.
Sheikh Mohammed bin Rashid al-Maktoum, billionaire ruler of Dubai, the state that ultimately owns P&O, could easily afford the £554mn a London court ordered him to pay his ex-wife in a high-profile divorce case last year — although the negative publicity the case generated was less easy to write off. DP World now faces its own reputational reckoning, with multiple legal challenges set to come P&O’s way.
This case should be especially sensitive for a Conservative government that has insisted that UK pay in many sectors would increase, post-Brexit, as businesses would no longer be able to rely on “cheap foreign labour”. It highlights the need to ensure that statutory protections for UK-based workers are strong enough and properly enforced. If P&O is found to have broken UK employment law, it should bear the legal consequences. The government should also reconsider whether its parent DP World’s Gateway and Southampton ports should still benefit from its freeport scheme.