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UK Pressures Ports to Block P&O Ferries Over Firings

Bloomberg
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March 30, 2022

By Christopher Jasper and Charlotte Ryan (Bloomberg) —

The U.K. government put the onus on port owners to block operations by P&O Ferries after the company fired staff with no notice or consultation in a bid to slash costs.

Proposed legislation will give ports statutory powers to refuse access to regular ferry services which do not pay their crews the national minimum wage, Transport Secretary Grant Shapps told Parliament on Wednesday. 

Shapps pitched the move as the best way of targeting P&O, contending that simply changing wage legislation wouldn’t work, since maritime law is governed by international conventions.

The British Ports Association said steps to discuss pay improvements in the ferry sector were welcome but that ports were not the appropriate vehicle to enforce such rules.

“The expectation that port authorities will need to enforce minimum wage rules in the shipping sector could be unworkable,” Chief Executive Officer Richard Ballantyne said in a statement. “This will place ports in a difficult legal predicament, especially before any legislation is in place.”

The Trades Union Congress, an umbrella body for U.K. labor groups, said the plan “has gaping holes” and “won’t stop another P&O-style scandal.” It called for stronger government action including the severing of ties with P&O’s Dubai-based parent DP World.

Shapps said the need for consultation means legislative changes will take time, but that he’ll write to ports instructing them that they should be “refusing access” to firms that fail to pay a fair wage as soon as practical. Britain will also seek to broker an accord on wages for ferry crews with nearby nations.

“If companies like P&O ferries want to dock in ports such as Dover, Hull and Liverpool they will have no choice but to comply,” he said, adding that the customs and revenue department will also be dedicating “significant resource” to checking that ferry operators comply with the minimum-wage requirements.

P&O sparked uproar this month when it fired 800 seafarers, many by video call, without consultation. Chief Executive Officer Peter Hebblethwaite inflamed legislators by telling them his firm made a conscious decision to break the rules because it knew the union wouldn’t go along with its restructuring plan.

Shapps said the government will seek to combat such action by imposing a 25% uplift in worker compensation where there has been no reasonable effort to reach agreement.

The minister said he had also written to the Insolvency Service, a government agency which deals with company bankruptcies and misconduct, to ask  it to consider disqualifying Hebblethwaite from being able to lead the company. 

Hebblethwaite told lawmakers last Thursday that P&O had reduced its wage bill by about half by switching to agency workers. He said then that pay on ferries sailing to overseas destinations wasn’t covered by U.K. rules but instead fell under international maritime law.

© 2022 Bloomberg L.P.

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