Most seafarers replacing the 800 workers sacked by P&O Ferries are being paid below the UK’s national minimum wage, the boss of the company has admitted.
Chief executive Peter Hebblethwaite, whose basic annual salary is £325,000, told a joint session of the Commons’ transport and business select committees that the average hourly pay of the new crew is just £5.50.
I have insisted that it is allowed under international maritime rules.
The minimum wage in the UK for people aged 23 and above is £8.91 per hour.
Mr Hebblethwaite went on to acknowledge that P&O Ferries broke employment law in how it handled the sackings.
He also claimed Transport Secretary Grant Shapps knew about the intention to cut jobs in November last year, although that was strongly denied by the Department for Transport (DfT).
In terms of how much the agency workers hired to replace the fired employees are being paid, Mr Hebblethwaite told MPs: “On the routes that are international routes, that are governed by ITF (International Transport Workers’ Federation) standards, we are paying above ITF minimum wages.”
Business committee member Andy McDonald said: “That’s below the national minimum wage of this country. How do you reconcile that?”
Mr Hebblethwaite replied: “Where we are governed by national minimum wage, we will absolutely pay national minimum wage.
“This is an international seafaring model that is consistent with models throughout the globe and our competitors.”
The ferry company boss offered no answer when Mr McDonald asked “could you sustain your lifestyle?” if he was paid the same as the new workers.
The Labor MP added: “How do you expect them to be able to feed their families and pay their bills?”
Asked about what aspects of employment law the company has broken, Mr Hebblethwaite replied: “We have not consulted and for that we are fully compensating people.”
He said a consultation on the new crewing model would have been “a sham” as “no union could accept it” because of the “fundamental nature of change”.
He went on: “We didn’t want to put anybody through that.”
Asked on whether he is concerned he had breached his legal obligations as a company director, Mr Hebblethwaite said: “I completely throw our hands up, my hands up, that we did choose not to consult.
“We did not believe there was any other way to do this.”
In response to being asked if he would make the same decision again with the benefit of hindsight, Mr Hebblethwaite said: “We weren’t viable before, and I know that if we hadn’t made radical changes the business would have closed.”
The chief executive also told MPs that Transport Secretary Grant Shapps was informed on November 22 last year by P&O Ferries’ owner DP World that the company would be changing its business model.
The PA news agency understands that Mr Shapps did meet DP World chief executive Sultan Ahmed bin Sulayem in Dubai on that date, but the DfT insisted he was only told the ferry operator faced challenges from competitors.
A DfT spokeswoman said: “DP World did not mention to the Transport Secretary any changes it would be making to P&O Ferries and there was no indication of the completely unacceptable changes it has subsequently made.”
Mick Lynch, general secretary of the Rail, Maritime and Transport union (RMT), told MPs that P&O Ferries “made flagrant breaches of the law”.
He said: “They’ve done it deliberately and they’ve factored in what they’re going to have to pay for it.”
He said the company is “threatening and blackmailing” its former employees, telling them they must sign a document or “you’ll potentially get no award whatsoever, and you have to give up all of your legal rights”.
He added: “This is absolutely outrageous.”
Mr Lynch described UK employment law as “a shambles”.
Andrew Burns QC, barrister at Devereaux Chambers, told MPs “all employers with ships must give a notice to the appropriate authority 45 days before dismissal”.
He continued: “My understanding from what I’ve been told this morning is that the notice was given to the appropriate authorities in the countries where the ships are flagged only on the day of the dismissals and not in advance.”
That “appears to be a breach” of employment law, and “it may be that (P&O Ferries) are liable to a prosecution”, he said.