Shapps announces crackdown on ferry firms to combat ‘outrageous’ P&O sackings

HMRC will target resources at companies’ minimum-wage compliance and Insolvency Service will explore Hebblethwaite ban
Grant Shapps. Screengrab: Parliament TV

By Jim Dunton

31 Mar 2022

Transport secretary Grant Shapps has set out the government’s detailed response to P&O Ferries’ decision to sack 800 crew members and hire cheaper overseas workers to run services from the UK mainland, a decision he described as “outrageous”.

Shapps’ “nine-plank package” includes a crackdown on ferry firms who fail to pay staff the national minimum wage, which was a driver for P&O’s decision, and a bid to get the firm’s chief executive Peter Hebblethwaite disqualified from serving as a company director.

The transport secretary told MPs yesterday that HM Revenue and Customs would be dedicating “significant resource” to checking that all UK ferry operators were compliant with the national minimum wage. P&O Ferries flags its vessels in Cyprus,  allowing it to take advantage of a legal loophole in relation to the minimum wage.

However, Shapps also announced plans to amend the Harbours Act 1964 to give British ports new statutory powers to refuse access to regular ferry services which do not pay their crew the national minimum wage.  

“It means that if companies like P&O Ferries want to dock in ports such as Dover, Hull or Liverpool, they will have no choice but to comply with this legislation,” he said.

“It means that P&O Ferries can derive no benefit from the action they have disgracefully taken. They have fired their workers to replace them with those who are paid below minimum wage. As a result of this measure, this cynical attempt will fail.”

He admitted that legislative change would not happen overnight, but insisted he wanted to see British ports refusing access to ferry companies which don’t pay a fair wage as soon as practical.

Shapps said earlier plans to amend the National Minimum Wage Act in light of the P&O sackings had been dropped following “expert maritime legal advice” that indicated it would not be effective.

“Maritime law is governed by international conventions that would too easily have overridden any changes,” he said.

Shapps said he had made no secret of his view that P&O Ferries’ boss Hebblethwaite should resign after Hebblethwaite admitted to the Transport Select Committee that the firm deliberately broke the law in relation to the sackings, and suggested he would do the same thing again.

The transport secretary said he had asked Insolvency Service chief executive Dan Beale to consider disqualifying Hebblethwaite as a director on the grounds that he is “unfit to lead a British company”.

“The Insolvency Service has the legal powers to pursue complaints where a company has engaged in, and I quote, so-called ‘sharp practice’,” Shapps said.

“Nothing could be sharper than dismissing 800 staff, and breaking the law whilst doing so.”

Failing to consult staff on its redundancy programme – which was announced via a pre-recorded Zoom message – was the area of employment law that Hebblethwaite acknowledged failing to comply with.

Other measures in Shapps’ package include a review of the Maritime and Coastguard Agency’s enforcement policies, to ensure they are fit for purpose, and action to make it harder and less rewarding for companies to use fire-and-rehire tactics like P&O Ferries sought to do.

“A new statutory code will allow a court, or employment tribunal, to take the manner of dismissal into account and, if an employer fails to comply with the code, impose a 25% uplift to a worker’s compensation,” Shapps said.

He told MPs P&O’s behaviour had united the whole country in sympathy with the sacked workers and their families – and in anger at those responsible – before launching into an unusually pro-worker conclusion.

“We are proudly a pro-business government. But not business like this,” he said. “We will never support those that treat workers with the callousness and disrespect that we’ve seen. British workers aren’t expendable. They are the backbone of this country.

“This robust package of measures announced today will give our maritime workers the rights they deserve, whilst destroying the supposed gains P&O Ferries hoped to obtain.

“And they will send a clear message that if you’re using British waters and British ports to ply your trade, then you must accept British laws.”

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