Grant Shapps calls for ‘brazen’ P&O Ferries boss to QUIT ‘right now’

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Transport Secretary Grant Shapps today demanded that the millionaire boss of P&O Ferries resign after his ‘brazen’ and ‘breathtaking’ admission in Parliament yesterday that he broke the law by sacking 800 workers without notice.

Peter Hebblethwaite, who is paid £325,000 to run the firm and lives in a plush £1.5million Cotswold farmhouse, told Members of Parliament during a dramatic joint evidence session that he ‘would do it again’ and called the new workers’ £5.50 hourly wage ‘competitive’.  

Outraged MPs branded the disgraced boss a ‘shameless criminal’ and called on him to quit, calling his position ‘untenable’, and fuelled calls for a criminal prosecution. Boris Johnson has repeatedly threatened to impose potentially unlimited fines ‘running into millions of pounds’ if the operator were found to have broken any British laws.

Speaking to Sky News this morning, Mr Shapps thundered: ‘I thought what the boss of P&O said yesterday about knowingly breaking the law was brazen and breathtaking, and showed incredible arrogance.

‘I cannot believe that he can stay in that role having admitted to deliberately go out and use a loophole – well, break the law, but also use a loophole.’

Pressed on whether that meant he was calling for Mr Hebblethwaite to resign ‘right now’, he added: ‘Yes.’

The Cabinet minister also downplayed his own department’s role in the fiasco, after Mr Hebblethwaite told MPs that Mr Shapps knew about the intention to slash jobs in November.

Asked if Mr Hebblethwaite was ‘lying’ about this, the Transport Secretary told Sky News that P&O Ferries was trying to ‘distract attention’ from its failure to provide notice of job cuts by claiming it informed him of its plans last year.

‘I’ve sent the note, actually, from the meeting in November, which was with a parent company – DP World – when I was at World Expo, where they simply said the competition’s very tough, the conditions are very tight… and they’ll be looking at the shape of their business. I’ve actually sent the formal civil service note of that meeting,’ Mr Shapps said.

‘I think we can all see that what they’re trying to do is distract attention. The fact of the matter is that they needed to give 45 days’ notice to ministers, in fact to the Secretary of State for Business, if you’re making these kind of redundancies. They did not do that, they did not provide the notice.’

Asked when he first became aware of the crisis at P&O, he said: ‘I was actually stood at the despatch box on Thursday when news started to come out about it. 

‘For completeness, I should say that the night before I was informed by my office that there’d be another round of redundancies at P&O. But P&O have made redundancies in the normal way in the past, including particularly during coronavirus, and so that in itself, whilst obviously really unfortunate – if they’d gone through the normal consultation process, worked with the workers, worked with the unions, we wouldn’t be sitting here where we are today.’

Union bosses today announced they will hold talks with P&O Ferries to demand the reinstatement of sacked seafarers.

More protests are being planned this weekend as unions keep up the pressure on the company and the Government to take action.

The Rail, Maritime and Transport union (RMT) said it will be meeting with the company following the huge outcry. Its general secretary Mick Lynch said: ‘RMT will be holding talks with P&O today to demand the reinstatement of our sacked seafarers.

‘We welcome the massive public and political support for our campaign. P&O Ferries need to change course and reinstate these loyal key workers.’ 

Darren Jones, the Labour chair of the business committee, said following the hearing yesterday that he was ‘amazed’ by Mr Hebblethwaite’s evidence and said he should be ‘fined, struck off and prosecuted’.

His counterpart on the transport committee, Tory MP Huw Merriman, added that Mr Hebblethwaite should ‘consider his position’, telling the BBC’s World At One Programme: ‘It is untenable to come to Parliament to say you have decided to break the law, you have no regrets.’ 

It came after Mr Jones sensationally asked Mr Hebblethwaite: ‘Are you in this mess because you don’t know what you’re doing, or are you just a shameless criminal?’.

Mr Hebblethwaite subsequently issued a public apology to the hundreds of staff, and their families, dropped in the lurch after giving them no notice of their redundancy via Zoom. 

He was then accused of unlawfully implementing redundancies without consulting the trade union beforehand, after telling the group of astonished MPs: ‘There is absolutely no doubt that we were required to consult with the unions. We chose not to do that.’

Andy McDonald, the former shadow transport secretary, asked: ‘You chose to break the law?’. Mr Hebblethwaite replied: ‘We chose not to consult, and we will compensate everybody in full for that.’

Mr McDonald asked: ‘Do you get in your car and drive down the motorway and see the 70mph sign and say, ‘That’s not going to apply to me, I’m going to do 90 because I think it’s important that I do that’? Is that how you go about your life?’.

‘No it isn’t,’ Mr Hebblethwaite replied.

The millionaire boss admitted that he would ‘do it again’, telling MPs: ‘I completely throw our hands up, my hands up, that we did choose not to consult. 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’.

He also refused to answer if he could survive on £5.50 per hour, the rate he is paying cheap foreign workers. The minimum wage in the UK for people aged 23 and above is £8.91 per hour. By comparison, the sacked crew earned an average of £36,000 per year.

Mr McDonald asked Mr Hebblethwaite: ‘That’s below the national minimum wage of this country. How do you reconcile that?’.

Mr Hebblethwaite insisted that the wage was ‘competitive’, adding: ‘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.’

The ferry company boss offered no answer when Mr McDonald asked ‘could you sustain your lifestyle?’, if he was paid the same as the new workers. The Labour MP added: ‘How do you expect them to be able to feed their families and pay their bills?’.

Mr Hebblethwaite also told MPs that Transport Secretary Shapps was informed on November 22 last year by P&O Ferries’ owner DP World that the company would be changing its business model.

It is understood that Mr Shapps did talk to DP World chief executive Sultan Ahmed bin Sulayem on that date, but the DfT insisted the Cabinet minister was only told the ferry operator faced challenges from competitors.

Earlier, Nautilus International shared a photo of what it claimed were ‘binned items’ belonging to staff who had worked in the Pride of Kent, and thundered in a tweet that it was ‘yet another example of the utter contempt P&O Ferries holds for its crew’.

Marine Tracker also shows the Pride of Hull sailing along its usual route from Hull to Rotterdam last night, where it is currently moored up. 

Also giving evidence yesterday, the Director of UK Maritime Services, Katy Ware, said the ship was cleared to sail to Holland yesterday without passengers or cargo. She added that the Pride of Hull would undergo inspections by Dutch authorities, and that P&O aims to have passengers and cargo on board for its return journey to East Yorkshire.

Nautilus International claimed that P&O Ferries is training the new recruits without any passengers, and that the Maritime and Coastguard Agency (MCA) has not given the ferry permission to return to normal operations. P&O Ferries declined to comment. 

Addressing the joint evidence session, union bosses also accused P&O Ferries of a ‘flagrant breach of law’ and of ‘blackmailing’ former workers.  

Mick Lynch, general secretary of the Rail, Maritime and Transport union (RMT), said: ‘They’ve done it deliberately and they’ve factored in what they’re going to have to pay for it, and they’re threatening and blackmailing our people, saying ‘if you do not sign this document by next Thursday, you will be out of work and you’ll potentially get no award whatsoever, and you have to give up all of your legal rights to take this company to task’. This is absolutely outrageous.’

He added: ‘The whole thing is a setup and the law in this country is a shambles.’  

Mr Shapps warned that the Government will legislate to close a ‘loophole’ in the law which he claimed P&O had sought to exploit. 

Calling the actions of the company ‘unacceptable’, he told broadcasters: ‘We think that the P&O management have exploited a loophole here in order to sack British workers, bring in very some very low paid international workers. We don’t think that’s right.

‘Next week we will be returning to Parliament with a package of measures to make sure that situation is undone. We will change the law to make that happen.’ 

Boris Johnson has threatened the disgraced operator with criminal prosecution and potentially unlimited fines ‘running into millions of pounds’ for allegedly breaking UK labour laws. 

However, moments after the Prime Minister made the dramatic remarks in the Commons yesterday, Government sources indicated that he may have ‘overstepped the mark’.

Legal experts have said that changes to EU law adopted by former Tory minister Chris Grayling in 2018 mean that the Secretary of State does not have to be notified of mass redundancies on ships registered overseas – but instead, officials in the locations where ships are flagged.  

Giving evidence today, Mr Hebblethwaite said: ‘Can I start these with an apology? An apology to seafarers that were affected on Thursday of last week, an apology to their families, an apology to the 2,200 of our employees who have had to face very difficult questions over the last week or so.

‘You may see this as a late apology and I just want to reassure you the reason that you’re hearing this for the first time today is because I’ve spent the last week in the business, talking to our people one to one.’

Writing to Tory ministers, Mr Hebblethwaite said the mass sacking was necessary to save the business. 

Asked how much money P&O Ferries will now save by employing cheaper agency workers, the company’s chief executive told MPs: ‘This entirely different model is about half the price of the previous model.’

Questioned on what the lowest hourly rate would be in the new model, Mr Hebblethwaite said: ‘About £5.15. The average rate is from about £5.50 to about £6, depending on exchange rate.’

Commenting on whether he believed that was a fair wage or whether he saw it as ‘modern day slavery’, Mr Hebblethwaite said: ‘The rates we are paying are in line or above ITF minimum standards and it is the operating model that the vast majority of operators across the globe work to. So this is the competitive standard.’

Questioned on whether he believes his actions have done more to end the business rather than save it, Mr Hebblethwaite told MPs: ‘I think we’ve got a tough job to do now to rebuild the business.

‘But I think P&O with a future and P&O that is able to be competitive, pay its own bills, and offer the customer service that is required, has a much better chance.’

Mr Hebblethwaite also told MPs that the Transport Secretary was informed by DP World that the company would be changing its business model on November 22 last year.

The millionaire boss had previously insisted that the company did not break UK labour laws because the ships are registered outside in Cyprus and the Bahamas. 

Writing to Business Secretary Kwasi Kwarteng, he said that the ‘very clear statutory obligation in the particular circumstances that applied was for each company to notify the competent authority of the state where the vessel is registered’.  

But Kevin Barnett, head of employment at marine law specialists Lester Aldridge LLP, said that the minister was ‘incorrect’ on this point, telling Sky News: ‘The amendment states the notification must be made to the competent authority of the state where the ship is registered, instead of the Secretary of State.’

The Trade Union and Labour Relations (Consolidation) Act 1992 was amended by statutory instrument in February 2018.

The change signed off by Mr Grayling states: ‘[If] the employees concerned are members of the crew of a seagoing vessel which is registered at a port outside Great Britain… the employer shall give the notification required… to the competent authority of the state where the vessel is registered (instead of to the Secretary of State).’

The Department for Transport (DfT) said in an explanatory note that the amendment was supposed to improve seafarers’ employment rights.

The department claimed the amendment had been supported by the unions who have led protests against P&O’s actions. It added that no formal consultation was carried out before the change was made, and no impact assessment was carried out.

It comes after a memo leaked to the Sunday Times suggested that officials at DfT had been notified of P&O Ferries’ intent to sack hundreds of its staff without notice.

At a joint hearing of the Transport Select committee and the Business, Energy and Industrial Select Committee, Mr Lynch told MPs:  ‘The politicians and the lawyers in this country have watched over the last 30 years, while not only workers have been made vulnerable, but our merchant marine has been decimated and destroyed.

‘If this goes the way it’s likely to go from what I’ve seen, we won’t have a merchant navy in this country.

‘There will be no ratings working in British ports. British ships will cease to exist, and British ratings will cease to exist. That’s what P&O are aiming to achieve, to kill our merchant marine and to kill our employment laws, and something’s got to be done about it today.’

Also giving evidence to MPs, Andrew Burns QC, barrister at Devereaux Chambers, said: ‘In broad terms, all employers with ships must give a notice to the appropriate authority 45 days before dismissal.

‘My understanding from what I’ve been told this morning is that the notice was given to the appropriate authorities in the countries where the ships are flagged only on the day of the dismissals and not in advance.’

He said that ‘appears to be a breach’ of employment law, and ‘it may be that [P&O Ferries] are liable to a prosecution’.

Mr Hebblethwaite yesterday publicly apologised for the impact of the mass layoff, but insisted that it was ‘the only way to save the business’.

P&O Ferries also announced that it would pay more than £36million in compensation to sacked staff, with 40 employees in line for payments of more than £100,000. It said payouts would be linked to the period of service, and in some cases exceed £170,000.

The total value of the settlement is £36,541,648, with no worker set to receive less than £15,000, the company added.

But the Trades Union Congress (TUC) has said that P&O’s claims that it had not broken any laws do not mean that the ferry firm will not face legal action.

Its general secretary Frances O’Grady told BBC Radio 4’s Today programme: ‘We don’t believe their legal advice is right and in the past, in fact, P&O has followed consultation rules, so either their very expensive legal advice has changed or their morals have just fallen through the floor.’

In a statement, Mr Hebblethwaite said: ‘I want to say sorry to the people affected and their families for the impact it’s had on them, and also to the 2,200 people who still work for P&O and will have been asked a lot of difficult questions about this.

‘Over the last week, I’ve been speaking face-to-face to seafarers and their partners. They’ve lost their jobs and there is anger and shock, and I completely understand.

‘We needed fundamental change to make us viable. This was an incredibly difficult decision that we wrestled with but once we knew it was the only way to save the business, we had to act.

‘All other routes led to the closure of P&O Ferries. I wish there was another way and I’m sorry.’

Former workers have reacted with fury to the announcement, with one telling The Times newspaper: ‘This is a total betrayal. It is clear, just as they were due to respond to the Government, that they want everyone to think they have done the right thing. I don’t want a payoff, I want the job I loved and gave me a life’.

The Nautilus union said P&O Ferries’ ‘shameless actions now extend to trying to buy its way out of a legal predicament exposed by the unions, obligation to report to the secretary of state and to consult with the recognised trades unions’.

They added: ‘P&O Ferries are claiming to be offering the ‘largest compensation package in the British marine sector’ – a company in such desperate financial circumstances that it is prepared to spend £36.6million on a fake redundancy.

‘Let’s be clear, this statement is confirmation that P&O Ferries believes that with enough money it has no need to follow the laws of this country or be hindered by ethical business standards despite the glitzy commitments of its parent company in Dubai.

‘Instead, it intends to bully our maritime professionals into signing settlement agreements to buy their silence.’

Miss O’Grady said it was the case that one of their ferries was registered in Cyprus and another in the Bahamas, adding: ‘These are all about tax arrangements, but it’s the workers’ contracts that we’re looking closely at’.

She told the Today programme: ‘We believe that P&O has acted unlawfully. It’s now clear that they deliberately flouted UK law in failing to consult with workers and their unions and sacking those 800 loyal and skilled seafarers.

‘We also now know, of course, that ministers knew that the sackings were imminent, and they knew before the workers knew, and they failed to inform unions too, so now the ball is in the Government’s court to make sure that P&O either reinstates those workers or they pay a very high price.’

She also insisted ministers ‘must come down on P&O like a ton of bricks’, adding: ‘If P&O is allowed to get away with a slap on the wrist, it will be a green light for employers up and down the land to treat staff like disposable labour.’

A spokesman for P&O Ferries said: ‘This has been an incredibly tough decision for the business: to make this choice or face taking the company into administration. This would have meant the loss of 3,000 jobs and the end of P&O Ferries. 

‘In making this hard choice, we have guaranteed the future viability of P&O Ferries, avoided large-scale and lengthy disruption, and secured Britain’s trading capacity.’

The company said that, subject to the settlement agreement, it would pay 2.5 weeks uncapped salary for each year employed, rather than the statutory one or 1.5 weeks. It is also offering 13 weeks salary in lieu of notice, and 13 weeks salary on top of this in absence of consultation.

But Mick Lynch, general secretary of the Rail, Maritime and Transport union (RMT), said that ‘the pay in lieu of notice is not compensation’. 

‘It is just a payment staff are contractually entitled to as there was no notice given,’ he said.

‘The way that the package has been structured is pure blackmail and threats – that if staff do not sign up and give away their jobs and their legal right to take the company to an employment tribunal, they will receive a fraction of the amount put to them. 

‘The actions of P&O demonstrate the weakness of employment law and protections in the UK. P&O have flagrantly breached the law and abandoned any standards of workplace decency.

‘They have ripped away the jobs, careers and pensions of our members and thrown them on the dole with the threat that if they do not sign up and give away their rights they will lose many thousands of pounds in payments.’

Last week, Mr Kwarteng wrote to Mr Hebblethwaite to say P&O Ferries had ‘lost the trust of the public’ and ‘given business a bad name’.

A BEIS spokesman said on Tuesday: ‘We have received a response to the Business Secretary’s letter to P&O and are reviewing their explanations. We will continue to work at speed with the Insolvency Service to consider if legal action is required and will provide an update as soon as possible.

‘Given recent reports of staff being paid below the national minimum wage, the Business Secretary has also asked the Employment Agency Standards Inspectorate to investigate the terms of agency workers’ contracts.’