P&O Ferries chief executive Peter Hebblethwaite has told a parliamentary committee that a company decision to make mass job cuts without consulting trade unions was a breach of UK employment law.
Last week, the Dubai-owned firm offloaded 800 workers and will replace most of them with staff sourced from abroad who will be paid £5.50 per hour. Although the new workers’ salaries are below the UK minimum wage, the amount does comply with international maritime standards.
Hebblethwaite told a joint business and transport committee: “On the routes that are international routes, that are governed by ITF [International Transport Workers' Federation] standards, we are paying above ITF minimum wages.
“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.”
Hebblethwaite explained that P&O Ferries “chose not to consult” workers’ unions amid concern that they would not have accepted the redundancy plans, adding that there was “absolutely no doubt” that his firm had broken the law by taking such action.
He said: “We've moved from one operating model to another. It was our assessment that the change was of such a magnitude that no union could possibly accept our proposal.
“So, as I say, I completely throw our hands up, my hands up, that we did choose not to consult.”
He went on to promise that P&O Ferries would “compensate everybody in full” for the decision but warned that anyone accepting the package would lose their right to pursue legal action against the company.
Hebblethwaite also argued that the loss-making business had to take the decision to dismiss staff in order to balance its books. When asked if he would forgo his annual bonuses that he earns on top of his £325,000 per year salary following the mass cuts, Hebblethwaite declined to respond.
He said: “We did not believe there was any other way to do this. We weren’t viable before, and I know that if we hadn't made radical changes the business would have closed”.
In the aftermath of Hebblethwaite's appearance in Parliament, he has faced numerous calls to resign including from transport secretary, Grant Shapps.
Shapps said: "I think he should go. The idea that you come to Parliament and you admit that you deliberately set out to break the laws in order to sack your staff and bring in below minimum wage people and that you'll buy off the staff to do that is quite simply unacceptable."
Shapps separately described the action taken by the business as "brazen and breathtaking" and indicative of "incredible arrogance".
He added: "They've exploited loopholes, they've been completely disgraceful and I'm clear that is no way to behave and not the right individual to have at the top of a British business."
The Rail, Maritime & Transport Union [RMT] also announced that it was calling for Hebblethwaite to be immediately disqualified as a director.
