If Grant Shapps hoped P&O Ferries would fold before his ultimatum this week and reinstate 800 sacked workers, a letter by return quickly disabused him.
Such a move, P&O Ferries’ chief executive Peter Hebblethwaite said, would lead to the company collapsing, adding the transport secretary was “ignoring the situation’s fundamental and factual realities”.
It would not be the first time a minister had done so, when it comes to the sea. While Shapps has now promised measures to tackle the actions of P&O Ferries, which dismissed all crew around the UK employed on its “British”, (but Jersey-issued) contracts, and enforce minimum wages, the government has long turned a blind eye to pay abuses.
Back in 2014, the late Bob Crow, then RMT union leader, decried the “super-exploitation of foreign nationals in the British shipping industry… a massive scandal that the political elite want to keep quiet”. The union launched protests over Condor Ferries, which sails from Portsmouth and Poole to the Channel Islands crewed from agencies abroad, which it says pay as little £2.40 an hour. (Condor did not respond to requests for comment.)
In 2017, inspections of multiple vessels from different operators working out of UK ports by the International Transport Workers’ Federation (ITF) confirmed that paying below minimum wage was widespread.
In early 2021, when Irish Ferries announced plans to bring its low-cost crewing model to the Dover-Calais corridor, unions warned of a race to the bottom. Irish Ferries had been the forefathers of P&O axe-wielding, in 2005 sacking – albeit with consultation – hundreds of crew to replace them with foreign agency workers. Instead of acting, the RMT complained, the government “rolled out the red carpet”. (Irish Ferries did not respond to requests for comment.)
Hebblethwaite was asked by Darren Jones, the chair of the Commons business committee, if he was a “shameless criminal”, but he has candidly answered many of the questions that ministers never really wanted to ask. The average pay of a seafarer on the Jersey contract was £36,000 a year, he told last week’s hearings; ripping that up for cheap agency crew, average hourly pay will now be about £5.50 an hour.
Tackling minimum pay, the one unequivocal, clear promise of action by Shapps, has actually been welcomed by P&O Ferries to “level the playing field”. The RMT backs enforcement, but points out it is irrelevant to the immediate crisis: “We don’t want the P&O staff who were on far more than minimum wage to come back with a 60% pay cut,” a spokesperson says.
Moreover, it is a curious hill for Shapps to now plant a flag: minimum wage legislation was extended in October 2020 to most seafarers working in UK waters, regardless of where a ship was registered. But ferries were not included.
Tim Tyndall, employment partner at Keystone Law, says: “The framework of the law is already in place. But while this has been referred to as a ‘loophole’ in the legislation, it is not a loophole at all,” Tyndall says. “The exclusion of employees on ferry services was quite deliberate.”
More critical to P&O’s cost savings than hourly pay are rest days. Until the 17 March cull, crew were paid full-time on a pattern seven days of consecutive 12-hour shifts, sleeping on board, followed by seven days off. Now, agency staff will be engaged for a fortnight at a time at far lower pay, with no income in between.
As Hebblethwaite spelled out in a letter to Shapps: “Under this model, crews are paid for the actual time they work (plus holidays) rather than the previous model in which crews were granted full pay for working 24 weeks a year.”
Ship operators argue that they are simply utilising the global labour market; few holidaymakers, enjoying how far their pound or dollar goes in eastern Europe or Asia, might be concerned about local wages. But ships bring that differential straight into UK ports.
According to Department for Transport statistics, fewer than 15% of seafarers working for UK-based operators are British; outside the officer class, more than three-quarters are drawn from outside the UK or European economic area.
While P&O Cruises’ latest advertising campaign attempts to distance itself from P&O Ferries, the Carnival-owned firm has paid hourly rates that even a Hebblethwaite could not dream of. In 2012, a Guardian investigation revealed that ships sailing out of Southampton were paying staff as little as 75p an hour basic wage.
Asked whether those rates had been improved, a P&O Cruises spokesperson said: “The cruise industry at large employs seafarers of over 50 different nationalities. Our rates of pay are competitive, fair and equitable and are based on market conditions in the seafarers’ home country.”
The minimum wage for skilled workers in Maharashtra state in India, home to the Mumbai agency offices that supplies many Carnival crew, is currently 470 rupees (£4.73) a day.
How Shapps will step into these murky waters will be watched with interest. Around the UK meanwhile, P&O Ferries has set out its stall to become the latest gig economy employer. According to a muster list seen for the Pride of Kent, one of the four Dover-based vessels where a total of just under 600 jobs were axed, the crew is now almost entirely from eastern Europe, flown in for a fortnight’s cheap work and then sent back.
A spokesperson for the Nautilus International union said: “What happens to all these people who have trained as seafarers in the UK? And what does it say about us as a country that we allow this to happen?”
• This article was amended on 30 March 2022 to correct the spelling of Maharashtra.
