DfT to review contracts with P&O Ferries after company sacks 800 staff

Decision is "wholly unacceptable", minister says, as firm faces call to repay furlough cash
People protest in Dover after P&O Ferries suspended sailings and handed 800 seafarers immediate severance notices. Photo: PA Images/Alamy Stock Photo

The Department for Transport will review any contracts it has with P&O Ferries and its parent company DP World, after the freight company caused an uproar by firing 800 of its employees.

Transport minister Robert Courts said he had instructed civil servants to review “contracts that may exist” between DfT and either company, after facing calls to scrap any deals that are in effect.

The company made 800 of its employees redundant over Zoom with no notice yesterday, prompting a massive backlash from unions and customers.

Courts told the House of Commons that P&O Ferries' treatment of its workers was "wholly unacceptable".

"Reports of workers being given zero notice and escorted off their ships with immediate effect while being told cheaper alternatives would take up their roles shows the insensitive way in which P&O have approached this issue, a point I have made crystal clear to P&O's management when I spoke to them earlier this afternoon," he said yesterday.

Shadow transport secretary Louise Haigh urged the government to review "any and every contract and licence that the government have with P&O or DP World", including DP World's running of two freeport schemes.

Courts said he would update MPs on officials’ findings on contracts "in due course".

"Conversations about freeports would have to take place across government, involving, in particular, the Treasury and the Department for Levelling Up, Housing and Communities," he said.

Haigh added that it was a “scandal” that DP World, which is based in Dubai, had “upended the lives of 800 British workers” despite receiving millions of pounds in grants during the pandemic.

P&O Ferries is facing calls to give back some £10m it received through the Coronavirus Job Retention Scheme, when it placed around 1,100 staff on furlough.

Conservative former transport minister Sir John Hayes slammed P&O Ferries' "capricious, careless, callous" decision to sack its workers, and said the government should "recover any monies granted to P&O Ferries during the pandemic".

Defence minister James Heappey said this morning that it would be “right” for the firm to return the furlough payments.

“It certainly feels to me that it would be the right thing to do for P&O to hand that money back,” the minister told Times Radio. “I’m sure that colleagues at the Treasury and Department for Transport will be looking into it.”

P&O has said it needed to save money after a £100m loss in the last year that had been absorbed by its parent company. DP World’s profits rose by 52% in the first half of 2021, according to Haigh.

In a statement, a P&O Ferries spokesperson said: "We have made a £100m loss year-on-year, which has been covered by our parent DP World.

"This is not sustainable. Our survival is dependent on making swift and significant changes now."

A DfT spokesperson said: “Ministers and officials have expressed their outrage and frustration at P&O Ferries on their decision and handling of their announcement, and is closely considering its relationship with the company.  

“The transport secretary has instructed a total examination of any contract in place with P&O Ferries and DP World across government, and the department is working closely with unions, Department for Work and Pensions, and industry bodies to ensure that workers are supported and signposted to the most relevant support.

“We have serious concerns that their handling may not have followed the correct and legal processes, and strongly urge P&O Ferries to pause the changes announced, and speak with workers as soon to repair the damage caused.”

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