The chief executive of P&O Ferries has admitted to breaking the law by firing the company’s entire UK crew without notice or consultation.
Giving evidence to UK MPs on Thursday, Peter Hebblethwaite was asked if he had “wilfully” broken the law by paying off almost 800 staff instead of launching a formal consultation as the law requires, he said: “I completely hold my hands up . . . we did choose not to consult.”
“There’s absolutely no doubt that we were required to consult with the unions. We chose not to do that . . . and will compensate everybody in full for that,” he said.
Any consultation would have been a “sham”, he argued, because the company was moving to an entirely different operating model and “no union could accept our proposal”.
Under the new model, new P&O crews will be paid an average of £5.50 an hour, which is legal despite being well below the UK minimum wage. This is because P&O ships operate in international waters.
Hebblethwaite apologised to the people fired last week but insisted that replacing them with cheaper international agency staff was the only way to “save the company”.
“The business was not viable . . . I would make this decision again I am afraid,” he said.
MPs accused the company of “thuggery” and “behaving like gangsters”.
“You haven’t escaped the law of this country. You still have to do it within the legal framework, you can’t just decide you can absent your self. I’ve never heard such farcical answers,” said Andy McDonald MP.
Hebblethwaite, who did not rule out accepting a bonus this year, admitted that some customers had been cancelling bookings and that there was “no question the brand has taken a hit”.
P&O has been heavily criticised for sacking the crew members without notice last week, many of whom found out via video message.
P&O also chose not to conduct a full staff consultation after calculating that the process would cost more than £300mn and potentially deal a fatal blow to the business, according to two people close to the company.
The operator last year conducted a study into options to sustain the business, protect its other 2,200 staff and maintain its role in facilitating 15 per cent of UK trade.
The people said P&O concluded that it would cost its Dubai owner at least £309mn to sustain the company through a likely consultation period of three months or longer, with no guarantee of recovery.
They claimed the process would have fatally undermined the business, with a potential flight of customers to competitors.
Business minister Paul Scully was unable to outline any immediate action against P&O but told the hearing that the government was considering “any options that are open to us”.
He added that P&O had also appeared to break the law in Cyprus, where some of its ships are registered, by failing to warn there authorities about the sackings. “We need to test UK jurisdiction,” he said.
MPs also heard that P&O is still at least days away from restarting services on the busy Dover to Calais stretch, given that none of its ships on that route has yet been inspected by the Maritime and Coastguard Agency.
Hebblethwaite said transport secretary Grant Shapps had been warned that P&O was in trouble and needed to make changes during a trip to Dubai in November.
One government official said the claim that Shapps was forewarned about the looming crisis was “rubbish”.
Shapps was in the United Arab Emirates from November 21 to 24 last year and met Sultan Ahmed bin Sulayem, chief executive of DP World, on November 22.
“The minutes say that the only thing that Sulayem said to the transport secretary was that there was a new low-cost operator on the market and that posed challenges in respect of P&O’s operation,” the official said.
“He didn’t say anything about potential redundancies, or redundancies, let alone hundreds of redundancies.”
P&O owner DP World, which is one of the UAE’s largest investor in the UK with about £3bn, has ploughed more than $700mn into the ferry business.
Jesper Kristensen, chief operating officer at DP World, said the company had supported the sackings despite knowing “this decision could have some kind of impact beyond P&O” in the UK.