Grant Shapps will hold crisis talks this week with P&O Ferries’ competitor’s operators, as ministers try to avoid chaos at ports during the Easter holidays.
The Sunday Telegraph reports that the Transport Secretary will meet with DFDS and Stena Line bosses on Monday to discuss the aftermath of the mass sackings 10 days ago of P&O seafarers.
P&O’s fate is expected to be top of the agenda. Also, the Government’s plans for rushing legislation to enforce the UK minimum wage for seafarers will likely be high on the agenda.
According to reports, Mr Shapps is pushing for French and Dutch commitments to enforce minimum wage requirements for “foreign-flagged vessels”.
On Wednesday, the House of Commons will debate new laws to close a loophole Mr Shapps called a “loophole” that allowed ferry operators to pay workers a fraction of the minimum wage of PS8.91 an hour.
P&O was widely condemned for laying off 800 employees without consultation or notice. They hired agency staff at an average rate of PS5.50 per hour.
Last week, Peter Hebblethwaite, chief executive of the company, admitted that it had violated the law. However, he said that he would do it over again if necessary.
P&O stated that it had to drastically cut its costs after suffering losses of PS100m over the past two years. P&O insists that it was down to the choice of firing 800 employees or losing all 3,000 workers in the UK because it wouldn’t be able to stay afloat. He said that negotiations with trade unions would have been “a sham” had they not been for Mr Hebblethwaite.
P&O transports approximately 10,000 passengers daily from Dover during the Easter holidays.
Industry sources stated that sailings with all operators on the English Channel are often fully booked during breaks. This means standard arrangements allowing P&O passengers instead to use their tickets on the Eurotunnel or DFDS will prove extremely difficult.
Copenhagen-headquartered DFDS, one of Europe’s biggest shipping companies, is expected to be based to fill a potential void left by P&O, which is unable to restart services until Government officials sign vessels staffed by agency workers as seaworthy.
P&O failed Friday’s first inspection of a ferry carrying passengers. The Maritime and Coastguard Agency of the Department for Transport impounded a ferry in Northern Ireland “due to crew familiarisation, vessel documentation and crew training”.
Swedish operator Stena primarily operates services in the Irish Sea, rather than on the English Channel. It has already offered additional sailings between Britain, Ireland. According to a spokesperson, it does not intend to operate from Dover.
The operators and Mr Shapps will likely discuss the long-term implications of the Government’s plans for imposing a minimum wage for seafarers. P&O has previously stated that the minimum wage is not feasible unless staffing costs are reduced. The Dubai owners could opt to close down their business.
DFDS, Stena Line and Stena Line did not comment on the talks.
Stockbrokers in the City warned that P&O would not be able to stop a crackdown if it was imposed.
John Musk, an analyst at Royal Bank of Canada, stated that either P&O Ferries will remain on Channel with a lower price base, but a damaged consumer image or they will retrench.
Irish Ferries could also be hard hit. It transferred its vessels to the Cypriot Register in 2006 and has faced protests by trade unions over claims that it is not paying the minimum wage.
Karl Turner, Labour MP for Hull East said that “if P&O don’t reverse this illegal determination, there will absolutely be chaos.”
After Mr Hebblethwaite’s appearance before a House of Commons committee, a spokesman for the Prime Minister and Mr Shapps demanded that Mr Hebblethwaite resign.
Labour called Kwasi Kwarteng (the Business Secretary) to remove Mr Hebblethwaite from his right as a company director this weekend.
A spokesperson for the Government stated that the Business Secretary had already written to Insolvency Service to ask them to immediately conduct an investigation into the actions taken by P&O Ferries.
“This will include any legal action against the directors of the company. If we find any evidence of wrongdoing, we will not hesitate in taking further action.”
A spokesperson for the Department for Transport stated: “Ministers are trying to understand how we can continue services in collaboration with other operators such as DFDS or Stena.”
“We are certain that the Government doesn’t support the actions of P&O Ferries [or] DP World. We are therefore looking for strong working relationships with employers that we believe to be more accommodating towards their employees.”
