Why did P&O Ferries sack 800 staff?

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P&O Ferries fired 800 staff on the spot in March – a mass layoff that sparked nationwide protests and holiday travel chaos in Dover

P&O Ferries laid off 800 employees on March 17.

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P&O Ferries has been heavily criticized for using fire and reinstatement tactics (Image: Getty Images)

It has taken more than a month for P&O Ferries services to resume on the vital Dover to Calais route – a delay that has severely impacted UK-EU trade.

So why has P&O Ferries cut so many jobs – and restarted services?

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Who owns P&O Ferries?

P&O Cruises is owned by another company – Carnival – and therefore has nothing to do with the mass layoffs.

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P&O Ferries operates an important trade artery for the UK between Dover and Calais (Image: AFP/Getty Images)

DP World is a Dubai-based logistics company.

It operates some of the world’s largest ports, terminals and economic zones, including London Gateway.

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Corresponding Reuters DP World bought P&O Ferries for £322m in February 2019, having previously owned it between 2006 and 2009.

It sold the company in 2009 to its main shareholder – the UAE’s state-owned holding company, Dubai World.

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Why did P&O Ferries lay off 800 employees?

P&O Ferries suspended all its services “for a few days” on March 17 as it announced a major overhaul of its operations.

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It said its business was no longer “viable” and would therefore have to lay off 800 seafarers to ensure its “sustainability” – and announced the move to shocked staff via Zoom.

The company touted a £105million loss it made in 2020 as a key factor in its decision – although the loss was covered by its owner DP World.

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In its 2020 financial statements, P&O Ferries said Covid-19 had significantly impacted its business.

Passenger numbers plummeted from 7.8 million in 2019 to just 2.7 million in 2020, with cargo crossings falling from 2.1 million to 1.95 million during that time.

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However, the accounts said there had been “signs of recovery” in 2021.

P&O Ferries workers have protested their sudden sacking (Image: PA)

A company insider told the PA news agency, P&O Ferries conducted a study in 2021 to see how it could stay afloat.

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The source said the firm had calculated it would cost £309million to keep the business going while it consulted with staff about job losses.

In a statement released on the day of the layoffs, P&O Ferries said its survival “depends on rapid and significant changes” and that without them there is “no future” for the company.

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Several P&O ferries have been prevented from operating over safety concerns after seafarers were laid off and replaced with agency workers (Image: Getty Images)

P&O Ferries turned to cheaper agency workers after laying off 800 staff – a move that raised safety concerns and resulted in four of its boats being detained by the Maritime and Coastguard Agency (MCA).

Three of these boats are now back at sea.

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On Monday (April 25), P&O rejected allegations reported by the BBC from the RMT Union for trying to get agency workers to agree to even lower wages.

Dover, a port no stranger to lorry queues since Brexit, experienced severe disruption on Thursday (Image: PA)

The government reacted furiously to the P&O Ferries layoffs.

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On March 28, Transport Secretary Grant Shapps issued a letter to P&O Ferries CEO Peter Hebblethwaite, saying the mass redundancy had “left P&O Ferries’ reputation and, I’m afraid, you personally, in tatters”.

Both Mr Shapps and Prime Minister Boris Johnson have called on Mr Hebblethwaite to resign, with Mr Shapps also urging the company to “return all 800 workers to their jobs on their previous conditions and wages”.

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But in a reply to that letter, P&O Ferries said it would collapse if it returned the jobs.

Protests against the mass redundancies at P&O Ferries continue in ports across the UK (Image: Getty Images)

Mr Shapps has unveiled plans to create “minimum wage corridors” on ferry routes between the UK and other nations.

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Labor leader Sir Keir Starmer has urged the Government to go further and cancel a £50million freeport deal it has given to P&O Ferries owner DP World.

Ministers said such contracts are currently under review.

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Are P&O Ferries services active?

Full P&O Ferries service between Liverpool and Dublin and Hull and Rotterdam has resumed.

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The route from Cairnryan, Scotland to Larne, Northern Ireland resumed on Sunday (24 April).

P&O Ferries ships are still tied up in ports across the UK (Image: Getty Images)

P&O Ferries services from Dover to Calais are still suspended more than a month after the mass redundancies.

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However, the PA news agency has reported that cross-channel cargo trips are due to resume on Wednesday (27 April), while tourist trips are due to resume in early May.

What did Peter Hebblethwaite, CEO of P&O Ferries, say to MPs?

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On March 24, Peter Hebblethwaite, the slip-up-prone CEO of P&O Ferries, was put to the test by MPs from the Transport Committee and the Business, Energy and Industrial Strategy Committee.

He apologized to everyone affected by the redundancies, but also admitted the company had breached UK labor law.

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Mr Hebblethwaite said there was “absolutely no doubt” that P&O Ferries would need to consult unions before laying off so many workers.

He also revealed new agency staff were being paid below the UK national minimum wage, with the average hourly wage standing at just £5.50 an hour – although he said that was “above” International Transport Workers’ Federation (ITF ) will be paid.

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The minimum wage in the UK for people aged 23 and over is £9.50 an hour.

After the MPs barbecue, Transport Secretary Grant Shapps said Mr Hebblethwaite’s admission of using loopholes and “knowingly breaking the law” was “brazen and breathtaking and displayed an incredible arrogance”.

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