Tue. Jul 5th, 2022

P&O Ferries’ flouting of the law to summarily fire 800 British-based seafarers only to replace them with cheaper agency crew has prompted the UK government to unveil measures to try to prevent such abhorrent cynicism. Unfortunately, the hastily drawn-up package will do little to strengthen UK worker rights, which the debacle has shown to be tenuous. Yet a long-awaited employment bill is unlikely to make it into next month’s Queen’s Speech. It beggars belief that a government that is supposedly keen to tackle unscrupulous employers should shelve what it has already promised to help workers.

The employment bill was conceived long before the P&O firings and instead targets other sharp practices, bolstering the rights of those on zero-hour contracts. However, the bill was widely expected to include a single agency to enforce worker rights. Patchy and toothless enforcement, and negligible consequences for breaking existing rules, are at the heart of the P&O scandal. They need an overhaul.

It can not be right that a deliberate calculation to bypass workers by simply paying them off is more cost-effective than complying with the law. Yet P & O’s decision to set aside £ 36.5mn to compensate sacked seafarers rather than abide by a lengthy consultation seems to have worked: just one seafarer has spurned its offer. The rest have accepted a package that is better than they would have received at a tribunal. The government is introducing a statutory code around consultations, with a proposed 25 per cent uplift to tribunal awards for workers fired by companies that ignore it. But it is unlikely to be enough to shift that cynical equation. Allowing tribunals to make unlimited awards would.

Equally, a code is unlikely to achieve much when penalties are derisory, if they are meted out at all. Grant Shapps, the transport secretary, has declared that HM Revenue & Customs will ensure that ferry operators are paying the national minimum wage “where they should be”. But HMRC’s record in enforcing minimum pay, now £ 9.50 an hour, hardly has rogue bosses trembling: there have been fewer than 20 criminal prosecutions since 2007.

Besides, P&O shows that ferry operators have many loopholes to exploit. It does now face a criminal investigation by the Insolvency Service over its alleged failure to notify the government. But P&O is adamant it has not broken the law in this regard – as opposed to its obligations to its workers, which its chief executive, Peter Hebblethwaite, readily admitted to flouting. P&O maintains that as its ferries were flagged in other countries, it only had to notify authorities in those jurisdictions. With three Jersey-incorporated P&O companies firing staff working five routes on eight different vessels, the probe may not be clear-cut.

Poor enforcement, and the complexity of getting rapid international agreement to tighten maritime law, is perhaps why Shapps thought it might be more efficient to put the onus on the private sector, allowing ports to refuse entry to vessels from operators that pay less than the minimum wage. But such a burdensome and legally complicated expectation on ports is hardly the stuff of a pro-business party.

The UK is among the easiest countries in the world to hire and fire workers. The government wants to keep it so. But it need not sacrifice its business credentials in making existing worker rights worth more than the paper they are written on. Ensuring rogue employers face consequences means supporting companies that do the right thing, and stopping what would otherwise be a race to the bottom.

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