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P&O Ferries CEO acknowledges ignoring rules in mass lay-offs

LONDON (AP) – The head of a ferry operator at the centre of a bitter labour dispute stunned United Kingdom (UK) lawmakers on Thursday when he acknowledged that the company chose to ignore the law and labour contracts when it fired 786 workers without consulting with them in advance.

P&O Ferries Chief Executive Peter Hebblethwaite said while under intense questioning from members of a parliamentary committee that the company decided not to discuss its plans with workers because it knew labour unions would never agree. Lawmakers repeatedly characterised the move as a willful decision to break the law.

The company dismissed the workers as part of a cost-cutting plan it said was necessary to save the business and 2,200 other jobs. The fired seafarers are to be replaced by cheaper staff provided by a third-party crew provider.

“There is absolutely no doubt that we we were required to consult with the unions,” Hebblethwaite said. “We chose not to consult and we… will compensate everybody in full for that.”

The cuts – which came after P&O received millions of pounds of British government aid during the COVID-19 pandemic – have caused outrage and sparked protests by trade unions at UK ports. P&O cancelled all services between Britain, Ireland and continental Europe after last week’s announcement, disrupting the movement of travellers and goods. Unions representing the dismissed workers said P&O is paying new crew members provided by Malta-based International Ferry Management Ltd the equivalent of GBP1.81 (USD2.38) an hour. Britain’s current minimum wage is GBP8.91.

Protesters stand behind a banner during a demonstration against the sacking of 800 P&O workers outside the House of Parliament. PHOTO: AFP

Trade unions have long objected to “fire and rehire” plans in which companies cut costs by firing workers then re-hiring them under less generous terms. Under British labour law, such extreme action is only meant to occur after extensive consultations with employees and unions.

P&O’s decision to ignore those rules prompted scathing questions from members of the British Parliament committee. Huw Merriman, a Member of Parliament from the governing Conservative Party, said Hebblethwaite should “consider his position”.

“It is untenable to come to Parliament to say you have decided to break the law, you have no regrets,” Merriman told the BBC. “We can’t have companies run by people like that, so he needs to hand his card in.”

Hebblethwaite said P&O has lost hundreds of millions of dollars over the past two years and it needed to change its business model to survive. When asked whether the company could survive the reputational damage from its recent actions, he acknowledged it would be difficult.

Business Minister Kwasi Kwarteng last week warned P&O that the company could face unlimited fines and other penalties if it was found to have violated laws requiring it to notify the government in advance before any large-scale firings.

P&O responded by saying the company didn’t believe it had violated the law because all the ships on which the crew members worked were registered outside the UK.