The UK government has announced plans to block ferries with crews paid less than UK ports’ minimum wage in response to widespread furor over P&O Ferries’ firing of 800 workers without consultation.
Transport Minister Grant Shapps told parliament on Wednesday that the government would write to UK port operators telling them to deny access to businesses that do not pay the UK minimum rate, adding: ‘This will have the full support of the government .”
He also outlined plans to create ‘minimum wage corridors’ on ferry routes between the UK and other countries.
P&O Ferries has sparked an outpouring of criticism and calls for action after its chief executive, Peter Hebblethwaite, admitted in extraordinary testimony before a parliamentary committee that the company had willfully ignored employment law which requires companies to consult the staff before carrying out redundancies. He intends to hire cheaper workers who would not be subject to UK minimum wage laws.
Hebblethwaite, whose basic annual salary is £325,000, told MPs last week that the average salary for the agency’s team was £5.50 an hour. The UK minimum wage for people aged 23 and over is £8.91 an hour.
Shapps wrote to the Insolvency Service, the agency responsible for regulating company directors, saying he believed Hebblethwaite’s actions amounted to “cutting practice” which should disqualify him from running a UK company.
The government will seek to pass primary legislation to amend the Ports Act 1965 to include the minimum wage provision.
However, it is obliged to consult the public before making any changes, so the government will seek to use the voluntary block to ensure that “P&O Ferries cannot derive any benefit from the action they have cynically taken “said Shapps.
The government is also considering changing employment laws to target “fire and rehire”, a deeply controversial practice used by big companies to reduce payrolls. Shapps said the government would consider allowing courts or employment tribunals to consider the manner of a dismissal and giving them the power to award 25% more in employment agreements.
The changes – some of which have been demanded by opposition politicians and unions for years – come amid criticism of the government for its failure to respond to the layoffs.
Shapps said ministers had instructed HM Revenue and Customs to closely inspect the tax affairs of P&O Ferries to ensure it complied with minimum wage requirements.
The Maritime and Coastguard Agency, a government body, also detained two P&O Ferries vessels, the European Causeway in Larne, Northern Ireland, and the Pride of Kent in Dover. P&O complained that the agency was exercising “an unprecedented level of rigor” in the security inspections it was undertaking, according to the Press Association.