UK Job Losses at P& O Ferries: A “Last-Resort” Corporate Decision with Tragic Human Consequences
Almost eight hundred UK-based seafarers and shore staff, around three-quarters of them working out of the Port of Dover, were informed by their employer, P&O Ferries, in a Zoom video call on the morning of 17 March 2022, that this was to be their “final day of employment”. It was alleged by trade union officials, although denied by the company, that security guards, some wearing balaclavas and carrying handcuffs, had been drafted in to escort staff off the ships. P&O Ferries later stated that all affected crew had also been notified “face-to-face and in person” if at work, while off-duty staff were “individually contacted on the phone, as well as via email and text”. All passenger and freight services to-and-from the UK, across the English Channel and the Irish and North Seas, were immediately suspended, but with a promise of early reinstatement. The company then attempted to soften the blow, offering the newly out-of-work seafarers “enhanced” severance packages, even as agency workers, many recruited from Asia and Eastern Europe and contracted to a third-party supplier, were being trained to fill their jobs, allowing services to be restored as soon as possible. The redundancy packages are said to include 2 ½ weeks’ pay for each year of service, an additional further three months’ pay to cover the usual period of notice, and topped up with 13 weeks’ worth of wages to compensate for “the lack of advance notice”.
P&O Ferries was quick to justify its abrupt and supposedly “last-resort” decision, claiming that the company was not a “viable business” in its current state, which it had presumably known for some time before this announcement, and justifying the 786 redundancies as necessary to secure the company’s future viability and to protect its remaining 2,200 staff. It might be worth noting that no P&O staff lost their jobs in France, probably, at least in part, because the Code du travail (labour code) provides more protection to French workers than is currently available to their British counterparts.
P&O Ferries Holdings did indeed lose £38.82 million in 2019, followed by £85.95 million in 2020, when they claimed almost £15 million in British government grants, including furlough payments for out-of-work employees. To blunt the losses, DP World loaned £30 million in November 2020, followed by another £10 million in March 2021. These losses appear to be a combination of the impact of the pandemic on passenger traffic and the effects of Brexit on freight traffic. Post-Brexit Britain has seen a decline in movement of goods between Great Britain and both the EU and Northern Ireland, as well as a reduction in Irish lorry traffic between Great Britain and the Republic of Ireland. P&O Ferries also reportedly owes £146 million to the Merchant Navy Ratings Pension Fund.
On 18 March 2022, P& O workers staged public demonstrations in Dover, Hull, and Liverpool, and blockaded a road leading to the Port of Dover causing a stacking up of lorries further upstream. The National Union of Rail, Maritime and Transport Workers (RMT) alluded to a “vicious example of despotic employer behaviour”. Government ministers and MPs of all political persuasions were predictably outraged by the unexpected turn of events. Grant Shapps, Secretary of State for Transport, accused P&O Ferries of “insensitive and brutal behaviour” in a speech at the Conservative Party spring conference in Blackpool, while the UK Government began reviewing all its existing contracts with the company.
P&O Ferries, a pan-European ferry and logistics company, is part of the well-established P&O brand, which also includes P&O Ferrymasters, P&O Maritime, P&O Estates, and P&O Cruises (a separate business owned by Carnival UK). The company operates four shipping routes, transporting passengers and freight. It provides daily ferry services between Dover and Calais (14), Liverpool and Dublin (3), and Larne (County Antrim) and Cairnryan (Dumfries and Galloway) (7), as well as an overnight ferry service between Hull and Rotterdam. There is no monopoly of routes, with rival operators, such as Stena Line, DFDS, and Irish Ferries providing alternatives to what P&O Ferries has to offer.
P&O Ferries was most recently repurchased from Dubai World by DP World, a Dubai-based Emirati global logistics company, on 20 February 2019 for £322 million. DP World itself was formed by a 2005 merger of Dubai Ports Authority and Dubai Ports International, and is involved with cargo logistics and the operation of port terminals and free trade zones.
P&O is an important part of Britain’s proud maritime heritage and over its existence has turned itself into a national institution. Its origins date back to The Peninsular Steam Navigation Company, which signed a government contract on 22 August 1837, as the lowest bidder, to convey the Royal Mail by steamer between England and the Iberian Peninsula (Spain and Portugal), with a weekly mail service linking Falmouth, Vigo, Oporto, Lisbon, Cadiz, and Gibraltar commencing on 4 September 1837. It was formally incorporated by Royal Charter as The Peninsular & Oriental Steam Navigation Company in 1840, after a government contract to provide a mail service to Egypt allowed it to develop traffic in an easterly direction, targeting the Middle and Far East. P&O, at it came to be known thereafter, then extended its reach to India in 1842, China in 1845, and Australia in 1852. People followed the post, as lucrative mail contracts encouraged the development of passenger services, and in 1904 P&O eventually joined in the “pleasure cruise” business. By 1924, through mergers and acquisitions, P&O had become the largest shipping company in the world, with a monopoly on traffic between the UK and India, China, Japan, and Australia.
P&O developed many other roles in response to the changing needs of the times. P&O ships aided the British war effort through many military conflicts, including both World Wars, transporting troops, horses, equipment, and supplies, as well as being requisitioned as armed merchant cruisers or hospital ships. In the 1950s, P&O conveyed so-called “Ten Pound Poms” from the UK to Australia on the “assisted passage scheme”, while in the 1960s it branched into cross-Channel ferries and expanded into freight forwarding and container ships.
P&O has encountered many financial obstacles in the past and has had to periodically restructure its fleet, workforce, and business interests to concentrate on those areas capable of providing the highest growth and returns. For example, in the 1990s, P&O divested itself of P&O Oilfields, P&O Tankships, and Earls Court and Olympia exhibition centres in London to concentrate on shipping. The crisis of 2022 is hopefully yet another blip in the company’s fortunes, which restructuring and new investment can soon turn around.
The private sector has to generate profits both to stay competitive and also to ensure that shareholders’ dividends justify their investments. But all of this comes at a price, with disproportionate costs being borne by a hapless workforce. The pandemic and Brexit have created a host of new existential threats for the British ferry industry, leading P&O Ferries to take its corrective action. Whatever the merits or otherwise of the company’s “downsizing” of its workforce, this particular episode has demonstrated a lack of dialogue with, and compassion for, its workforce, and is likely to devastate local economies in the UK that depend upon servicing the ferry trade. Whether the company acted lawfully or otherwise is a matter for employment lawyers, courts and tribunals to decide, but a failure to consult with the workforce before their dismissal and to then undercut their services with foreign labour seems morally questionable at the very least. Unfortunately, the priorities of global corporations, the welfare of their employees, and the impact of corporate decisions on local economies are often at odds with one other, and the current P&O Ferries episode seems mostly unlikely to remain a one-off catastrophe, never to be repeated.
Ashis Banerjee