P&O offers more than £36 million in compensation to sacked staff

The company said payouts would be linked to the period of service, and in some cases exceed £170,000.

22 March 2022

P&O Ferries has announced it is offering more than £36 million in compensation to sacked staff, with 40 employees in line for payments of more than £100,000.

It comes after nearly 800 workers were fired without notice last week, sparking backlash from across the political spectrum.

The company said payouts would be linked to the period of service, and in some cases exceed £170,000.

It comes as a spokesman for Business Secretary Kwasi Kwarteng confirmed the Government had received a letter from P&O Ferries in response to his questions about the shock move by the 5pm deadline on Tuesday.

The total value of the settlement is £36,541,648, with no worker set to receive less than £15,000, the company said.

Employees are also being given support to find a new job at sea or onshore.

The ferry giant said that 575 of the 786 seafarers affected are in discussions to progress with the severance offers.

A P&O ferry remains moored at the Port of Dover in Kent (Gareth Fuller/PA)
A P&O ferry remains moored at the Port of Dover in Kent (Gareth Fuller/PA)

A spokesman for P&O Ferries said: “This has been an incredibly tough decision for the business: to make this choice or face taking the company into administration.

“This would have meant the loss of 3,000 jobs and the end of P&O Ferries.

“In making this hard choice, we have guaranteed the future viability of P&O Ferries, avoided large-scale and lengthy disruption, and secured Britain’s trading capacity.”

The company said that, subject to the settlement agreement, it would pay 2.5 weeks uncapped salary for each year employed, rather than the statutory one or 1.5 weeks.

It is also offering 13 weeks salary in lieu of notice, and 13 weeks salary on top of this in absence of consultation.

P&O Ferries said the settlement is believed to be the largest compensation package in the British marine sector.

But Mick Lynch, general secretary of the Rail, Maritime and Transport union (RMT), said that “the pay in lieu of notice is not compensation”.

“It is just a payment staff are contractually entitled to as there was no notice given,” he said.

“The way that the package has been structured is pure blackmail and threats – that if staff do not sign up and give away their jobs and their legal right to take the company to an employment tribunal, they will receive a fraction of the amount put to them.

“The actions of P&O demonstrate the weakness of employment law and protections in the UK. P&O have flagrantly breached the law and abandoned any standards of workplace decency.

“They have ripped away the jobs, careers and pensions of our members and thrown them on the dole with the threat that if they do not sign up and give away their rights they will lose many thousands of pounds in payments.

“This is totally unacceptable and RMT will continue to campaign for our members to be reinstated at P&O and for better employment laws to protect all British workers.‎”

Meanwhile, MPs have said they are keen to question P&O Ferries chief executive, Peter Hebblethwaite.

Mr Hebblethwaite has been invited to attend an evidence session jointly held by the Commons Business, Energy and Industrial Strategy (BEIS) and Transport Committees on Thursday March 24, which will examine what options are available to the Government and the workers who have lost their jobs.

In a statement, the committee chairmen Darren Jones and Huw Merriman said: “From P&O Ferries, our members want to know why this action has been taken and how it can be justified.

“From the Government and its agencies, we want confirmation that our laws are not being broken and safety is not being compromised on our ships.

“This shocking story has raised questions about UK employment law, safety practices, the support of this business through a pandemic and the redress available.

“We intend to hear from the key players about what they are going to do that means these workers are not left high and dry.”

Last week, Mr Kwarteng wrote to Mr Hebblethwaite to say P&O Ferries had “lost the trust of the public” and “given business a bad name”.

The letter demanded answers to a series of questions about what had happened, with a response requested no later than 5pm on March 22.

A BEIS spokesman said on Tuesday: “We have received a response to the Business Secretary’s letter to P&O and are reviewing their explanations.

“We will continue to work at speed with the Insolvency Service to consider if legal action is required and will provide an update as soon as possible.

“Given recent reports of staff being paid below the national minimum wage, the Business Secretary has also asked the Employment Agency Standards Inspectorate to investigate the terms of agency workers’ contracts.”

The Nautilus union said in a statement: “It has taken the company five days to come out in the open with an explanation, of sorts, not an explanation of its outrageous and illegal actions but an admission of guilt that it intends to swipe aside with money.

“P&O Ferries’ shameless actions now extend to trying to buy its way out of a legal predicament exposed by the unions, obligation to report to the secretary of state and to consult with the recognised trades unions.

“P&O Ferries are claiming to be offering the ‘largest compensation package in the British marine sector’- a company in such desperate financial circumstances that it is prepared to spend £36.6m on a fake redundancy.

“Let’s be clear, this statement is confirmation that P&O Ferries believes that with enough money it has no need to follow the laws of this country or be hindered by ethical business standards despite the glitzy commitments of its parent company in Dubai.

“Instead, it intends to bully our maritime professionals into signing settlement agreements to buy their silence.

“Nautilus members have been put under intense pressure by P&O Ferries management to accept these redundancy terms whilst threatening them with withdrawal of the offer made if they talk to the press or demonstrate against the company.

“We are not surprised that many of our members are voting with their feet and leaving.

“We seriously doubt many will return for reduced terms and conditions and the promise of a bonus in 12 months from a Maltese outfit that didn’t exist five weeks ago.

“This company has been badly run of that there can be little doubt. Questions must be asked about the directors who have run a once-proud company, with nearly two centuries of history, into the ground.”

Nautilus general secretary Mark Dickinson said: “We demand that P&O Ferries engages with the recognised unions, reinstate all staff who were sacked, and discuss our serious safety concerns about how the company now plans to operate the ships.

“Only then will P&O Ferries be able to live up to its heritage, contribute to the achievement of the Government’s Maritime 2050 strategy and recover the damage it has done, not only to the nation’s standing, but to its own reputation and once-proud shipping brand.”

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