P&O Ferries is under mounting pressure to repay millions of pounds in government support it received during the pandemic after a decision to replace 800 UK-based crews with cheaper agency staff drew heavy condemnation from politicians and unions.
The company, which is owned by Dubai’s DP World, suspended sailings on Thursday and ordered ships to return to port to discharge their crews, who were dismissed effective immediately through a short video message.
“When companies are behaving as badly as P&O has clearly done, it is right for the government to point it out,” Armed Forces Secretary James Heappey said on Friday.
Unions said the company has received £10million in holiday pay during the pandemic.
Heappey said: “For me, if P&O gives this money back, it’s definitely the right thing to do. I am sure that the colleagues in the Ministry of Finance and in the DFT will deal with it.”
P&O also received £4.4million through a government contingency scheme to keep cargo flowing during the lockdown between May and July 2020.
DP World has invested in the Thames Freeport and its deep sea container port, Southampton, was one of eight bidders to be granted free port status, which brings tax advantages, by the government last year.
A Downing Street official said the Government needed to “get the facts” before deciding whether DP World should lose its access to free ports or return furlough funding.
Grant Shapps, Secretary of State for Transport, added that it was not too late for management to meet with workers to discuss the redundancies and that he would “put pressure on all sides” for them to do so. He said he’s asked officials and legal teams to “check” if the government has any contracts with P&O.
Government officials were alerted to P&O’s plans to sack British crews on Wednesday night, but ministers didn’t know until Thursday.
Labor said ministers should reclaim money handed over during the pandemic, suspend government contracts handed over to DP World and remove it from the UK government’s Transport Advisory Group.
“The government must now act to ensure that loyal workers in Britain are being undermined by foreign billionaires,” said secretary for transport Louise Haigh.
Peter Hebblethwaite, chief executive of P&O Ferries, told the company’s remaining employees in a letter submitted to the Financial Times that replacing UK-based crew with cheaper staff would cut crewing costs by 50 per cent.
“It’s a model that’s proven to work across the industry while still allowing us to maintain the level of service and security,” he wrote.
Irish Ferries uses the agency brokerage model, but most others in the industry, including Denmark’s DFDS, another of the three ferry operators between Dover and Calais, employ the majority of crew directly.
A large crowd of protesters led by union leaders and MPs gathered at Maritime House in Dover on Friday morning before marching to the docks.
The RMT Union drew comparisons to measures taken against Russian oligarchs and said ministers should “seize” P&O’s ships.
Darren Proctor, national secretary of the RMT, said redundant workers had been advised not to sign severance packages while unions sought legal advice.
He said agency staff hired on ships in the last 24 hours were only contracted for a two-week period and management would likely hire cheaper overseas staff thereafter.
“This is an international route so to hire a UK seaman at this point you would have to pay the national minimum wage. If they hired someone from outside the UK, they wouldn’t have to pay them the national minimum wage,” he said.
P&O has warned it doesn’t expect to be able to resume departures for days.
The sudden capacity shortage on key freight routes, including the short strait between Dover and Calais, prompted warnings of pressure on already congested supply chains.
DFDS said passenger bookings are three or four times higher than usual for the coming days and over Easter and summer.
The Danish operator added that it has been able to handle traffic in the ports so far and the weekend lull in cargo volumes should help keep goods and passengers flowing. The Port of Dover handles goods worth £144 billion and a third of UK trade with the EU.
Some P&O freight ferries, such as those to terminals on the Thames, which are owned differently and operated differently than the ferries directly affected by the downsizing, are still operating.
https://www.ft.com/content/d2910ca8-5bc8-4b26-90f6-3da6355d99b5 P&O faces calls to return government Covid funds after British occupation is sacked