P&O Ferries has rejected the UK transport secretary’s demand that it reinstate the 800 seafarers sacked without notice this month, warning the move would topple the company.
In a letter to Grant Shapps seen by the Financial Times, the P&O chief executive, Peter Hebblethwaite, said: “Complying with your request would deliberately cause the company’s collapse, resulting in the irretrievable loss of 2,200 jobs.”
He said making the staff redundant without due process had been a “regretful step” taken to save the company after considering all other options.
Shapps wrote to Hebblethwaite on Monday to give management “one further opportunity” to rehire the staff and “go some way in starting to repair your firm’s reputation with the public”.
P&O is in the process of replacing the sacked sailors with agency staff on more flexible contracts who will be paid an average of £ 5.50 per hour, well below the UK’s minimum wage but legal because the crew work offshore.
Ministers have pledged to end this loophole with legislation forcing all ferry companies operating out of UK ports to pay the minimum wage.
P&O has indicated it would be willing to pay the national minimum wage if other ferry operators did likewise, but insists it must change its crewing structure and put staff on more flexible agency contracts, regardless of how much they are paid per hour.
It has said the new crewing model, which is used by 80 per cent of global shipping, offers savings from the removal of job duplication as well as lower wages.
Crews are paid for the actual time they work – plus holidays – rather than the previous model, in which they were granted full pay for working 24 weeks a year.
Hebblethwaite described this previous model as “unsustainable” in his letter to Shapps.
“I would welcome the opportunity to explain this crewing model in greater detail,” he said.
P&O said more than 500 of the 786 redundant crew had accepted settlement offers, including 67 officers who had accepted or are in the process of transferring to the new agency. He said 765 had “taken steps” to accept the settlement.
Hebblethwaite has come under concerted political pressure to resign following his handling of the sackings and his assertion that the company knowingly broke the law when it laid off the staff without properly consulting unions.
Adding to the crisis at the company, two of P & O’s ferries have been detained by the Maritime and Coastguard Agency following inspections on crew familiarization and training in ports in Dover and Larne.