P&O Ferries spent more than £47m on sacking hundreds of UK seafarers in 2022, according to its long overdue accounts that will be published in the coming days.
The filings, which the Guardian has seen, confirm the financial cost of the company’s actions two and a half years ago when it outraged the public and parliament by dismissing 786 mainly British ferry workers – and then largely replacing them with low-cost agency staff from countries including India, the Philippines and Malaysia.
The scandal re-emerged last month when the prime minister, Keir Starmer, rebuked his transport secretary, Louise Haigh, after she referred to the ferry operator as a “rogue operator”. DP World, P&O’s Dubai-based owner, had reportedly threatened to pull out of a £1bn investment in the UK on the back of the comments.
P&O had always argued it had been forced into the sackings in order to save the company. The long-awaited accounts, which are almost 11 months late, illustrate the dire financial condition of the business.
The document outlines how P&O has been “in breach of covenants with respect to its external debt”, and was forced to increase its overdraft facility with its parent company DP World to £365m, up from £295m. The company also sold off one of its vessels in order to raise a further £77m in financing.
A spokesperson for P&O Ferries said: “Our 2022 financial accounts show the challenges faced by the business at that time and why the business needed to transform into a competitive operator with a sustainable long-term future.
“P&O Ferries has taken steps to adjust to new market conditions, matching our capacity to demand and adopting a more flexible operating model that enables us to better serve our customers.”
However, the accounts make a nod to the damage to the brand with travellers after the 2022 layoffs, when the company’s lack of consultation before the sackings led to the ferry operator being accused of breaking employment law.
A Guardian and ITV News investigation revealed in March this year that the new staff were earning as little as £4.87 an hour, when the company had previously suggested the lowest pay rate was £5.15 an hour after the sackings. P&O later admitted to parliament that the Guardian and ITV’s figure was correct.
The ferry operator had used a loophole, exempting seafarers from minimum wage legislation, in order to pay its staff below the UK and French minimum wage rates. However, that option was closed off in March this year, when the French government implemented a law aimed at preventing the exploitation of cross-Channel workers.
The P&O accounts also said that a civil investigation by a government agency into the company’s conduct during the 2022 sackings was “ongoing”, but remained at the “information gathering stage”, although the company’s directors appear to be confident that no action will be taken.
“The Insolvency Service would need to show that any action it proposed to take was in the public interest and just and equitable,” the accounts said.
“That threshold is high, and the directors consider that the threshold would not be met in this case.”
Overall, P&O’s pre-tax losses fell to £246m during 2022, down from £375m the previous year. Despite the challenging year, revenues rose by £84m to £919m.
