Photo by Tudor Smith on Pexels
Last week P&O Ferries made the disastrous decision to replace 800 staff with low paid agency workers. Over the course of the last five days, this has proven to be an unmitigated disaster. Every day seems to bring a new headline. As it stands, the company has faced boycotts, industrial action, legal challenge and service shutdowns. The backlash has even started to hit the Prime Minister and Transport Secretary.
What has happened so far?
Over the last few years, P&O Ferries has suffered a pretty disastrous run of events. They lost £39m in 2019 before the pandemic even struck, with a further loss of £86m in 2020. 2021’s figures have not been published yet, but losses greater than £100m are expected. Of course, the pandemic has played a big part in this. But Brexit has also weighed heavy.
Freight makes up the vast majority of P&O Ferries business, particularly the Channel crossing. This has suffered catastrophically as UK / EU trade has declined. It seems that the government has been advised of this repeatedly, but has refused assistance whilst simultaneously pursuing a dogmatic hard Brexit. Whilst this may elicit sympathy, some crucial context is missing. P&O Ferries is owned by DP World – a company that made a £670m profit in 2021.
On 17th March this came to a head and P&O Ferries advised 800 workers that they were sacked. In a bid to stay afloat, if you’ll forgive the pun, these 800 workers will be replaced with agency staff. Agency staff who will be paid substantially less than minimum wage. This happened on a 3 minute call. No prior notice was given, and no consultation was held. This move has been condemned by virtually everyone and rightly so. This is the second round of mass firings P&O has instituted, after sacking 1,100 employees at the start of the pandemic. This was particularly egregious as it came at the same time that a £270m dividend was paid to DP World shareholders.
What has happened since?
Shortly before the announcement, P&O suspended all services except the Liverpool – Northern Ireland line. Today, the Northern Ireland service was sent into disarray as port authorities held ships. It appears that safety and documentation issues have arisen over the new workforce. The result is that P&O Ferries appears to have no services in operation at present. This can hardly be good for their operating profit.
The public have also reacted with outrage. There were immediate calls for a boycott, which captured the imagination of politicians like Andy Burnham. Some of this heat has even spread to P&O Cruises, a completely different company. They have been forced to launch a campaign to make it clear to customers that they are not P&O Ferries.
On the other side of the political spectrum, the government has been quick to distance itself. This lost some of it’s impact when it became clear that P&O Ferries had been warning the government this might happen for months. In November last year, minutes show that Grant Shapps (Transport Minister) met with DP World. In this meeting he clearly stated he understood the current financial concerns, and that this meant P&O would have to make “commercial decisions”. He did nothing.
The CEO has now come out and admitted that the action potentially falls foul of UK law. In light of this revelation, Boris Johnson has subsequently called for the CEO of P&O Ferries to resign. For once I am in complete agreement with him. Breaking the law should be a resigning matter. We can only hope he will follow his own advice when Partygate comes to a head. Then again, that is unlikely from this “one rule for me, one rule for you” conman.
What happens next?
In an attempt to recover, P&O announced a £36m “compensation package” for workers. A large chunk of this is payment in lieu of notice. So, let’s recap…
P&O acted with unnecessary haste by dismissing without notice or consultation. To remedy this PR disaster, they are now paying their staff not to work. But, as mentioned above, their new staff (who they are also paying) are not yet trained. This means that they have had to suspend or been forced to suspend all services.
The decision seems staggeringly stupid. Remember this all started due to financial difficulty, yet they are now paying two workforces and are unable to run any ferry services. They are also facing legal action and have annihilated their reputation. One does wonder why they didn’t just run a consultation period?
