Grant Shapps fails to win industry support for plan to hit P&O Ferries

The British government has set out plans to force ferry operators to give seafarers decent pay by handing ports new powers to block access to the vessels of any company that does not pay the minimum wage.

But the initiative, aimed at forcing P&O Ferries to reverse its decision to sack 800 staff, immediately ran into difficulties when ports raised concerns.

Grant Shapps, UK transport secretary, said he had concluded that his original plan to legislate for shipping companies to pay the minimum wage was not feasible. Instead, he would “give British ports new statutory powers to refuse access to regular ferry services which do not pay their crew a national minimum wage”.

The new legislation is aimed almost entirely at P&O, which triggered political outcry when it fired nearly 800 UK-based crew without union consultation in order to replace them with low-paid agency workers.

Under P & O’s new crewing model it would pay its crew an average hourly wage of £ 5.50, well below the national minimum wage of £ 8.91 for anyone over the age of 23.

The transport secretary said the government wanted to take the legislation forward as quickly as possible but added that it had a legal obligation to consult with the sector first.

In the meantime, Shapps is writing to all ports in the UK urging them to refuse access to all ferry companies who do not pay a fair wage “as soon as practicable”.

Grant Shapps speaking in the House of Commons on Wednesday
Grant Shapps announced nine measures in the House of Commons on Wednesday as he said that attempts to make P&O voluntarily change course had ‘fallen on deaf ears’ ©

But Richard Ballantyne, chief executive of the British Ports Association, questioned how workable the plan to use ports to monitor compliance would be. “[We]do not feel that using ports as the vehicle to enforce rules on behalf of the government is suitable, ”he said.

Tim Morris, chief executive of the UK Major Ports Group, the trade body representing large commercial ports, also dismissed the idea. “We have neither the expertise nor resources to enforce employment law.”

Jason Chuah, a professor of commercial and maritime law at the City Law School, agreed and said the proposal flew “in the face of international norms”.

Shapps said he had asked the Maritime and Coastguard Agency to review its enforcement policies to make sure they were “fit for purpose” to assist ports. “The game is up,” Shapps said. “As a result of this measure, their cynical attempt will fail. My message to P&O Ferries is this: rehire those who want to return. ”

The proposed legislation was one of nine measures announced by Shapps as he said that attempts to make P&O voluntarily change course had “fallen on deaf ears”.

These included writing to his counterparts in EU countries served by P&O, including France, Ireland and the Netherlands, proposing to set up minimum wage “corridors”, where a common standard could be enforced without jurisdictional issues.

He said he had also written to the head of the Insolvency Service, asking the body to consider the disqualification of Peter Hebblethwaite, P&O Ferries chief executive, who he believed was “unfit to lead a British company”.

Andrew Burns, a QC specializing in industrial disputes, said the measure that would make the most difference to P & O’s workers was the minimum wage corridors proposal, calling it “one of the first forays back into having mutual obligations with EU countries” since Brexit.

Frances O’Grady, general secretary of the TUC, said the government’s plan “had gaping holes” and would not deliver a fair outcome for the sacked workers, whose previous pay had been well above the statutory minimum.

Opposition Labor MPs and unions also criticized a proposal for a new statutory code detailing how employers should consult staff on changes to terms and conditions. They said it fell far short of their calls to ban controversial “fire and rehire” tactics.

P&O has said it will pay minimum wage on its routes between Northern Ireland and Scotland, which fall under UK law, and it has indicated that it would be willing to do so on all of its routes if competing ferry companies followed suit.

But P&O has so far rebuffed government pressure to reinstate the sacked crew members, insisting that the company, which lost £ 100mn last year, would not be able to survive without slashing its staff costs.

P&O did not respond to a request for comment.

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