Is P&O taking advantage of international staff through a legal loophole?
The minimum wage in the UK is set to increase from £10.42 per hour to £11.44 next month, so how is P&O getting away with paying foreign as low as £4.87 per hour? 2 years ago, P&O was in the headlines for sacking nearly 800 staff to replace with cheaper employees.
Another situation impacting P&O’s business reputation further.
P&O fired 800 employees in 2022
In 2022 P&O was in the headlines for making 800 staff redundant with immediate effect, an illegal move by the company. P&O felt they were left with no other option but to sack and rehire cheaper staff, due
to financial struggles. A move the UK government called “wholly unacceptable” and RMT Union labelling it one of the “most shameful acts in the history of British industrial relations”.
Employees were informed there would be a pre-recorded Zoom meeting. The recording was less than 3 minutes long and employees were made aware it was their last working day with P&O, employees were made redundant on the call. Employees had no previous warnings of their jobs being at risk.
Crew members were escorted off ships and made aware of cheaper labour being used, to replace them. Their approach in handling redundancies isn’t the first case, however, foregoing notice and consultation
processes is exceptional.
Peter Hebblethwaite Chief executive of P&O admitted to breaking the law when handling the redundancies, however neither the company nor the chief executive was prosecuted. MPs in the UK called for the “Fire and Rehire” practices to become illegal within the UK, however, 2 years later this remains legal.
Legal loophole for maritime minimum wage
There is a legal loophole in that UK minimum wage rates, do not apply to maritime employees working for foreign agencies on ships registered abroad while in international waters. P&O is owned by Dubai-based DP World, allowing for this to happen.
It was previously suggested that the company’s lowest wage was £5.15 an hour, where some employees were earning £4.87 an hour excluding holiday pay. This came to light following an analysis conducted by ITV News and the Guardian.
To put it into context, the UK minimum wage has been above this level for 20 years, going back on records 2004 main rate for anyone over 22 was £4.85.
The company has denied knowing or recognising the lower rate of pay, a spokesperson stipulated “We always pay at least the minimum wage required by national and international laws.”
There is UK law “Seafarer’s Wages Act” in the pipeline and has received royal assent, meaning ferry operators must pay rates equivalent to the UK minimum wage. Grant Shapps UK’s transport secretary at the time of P&O’s fire and rehire tactics promised this legislation to improve cross-channel ferry worker’s pay, preventing a similar situation from arising again, however 2 years on, laws are no further along.
Impact on P&Os reputation
As controversies grow surrounding P&O, including illegally sacking employees and below minimum wage pay, employees have made allegations of extreme working conditions. A P&O spokesperson has said in
addition to wages they “provide all meals, modern accommodation, gym sauna plus travel to and from their home country including flights.” However, does this make up for 12-hour shifts 7 days a week for 17 weeks? We don’t think so!
The gruelling schedule experienced by employees with no breaks and remaining on the ship for months at a time puts immense mental stress on employees. An employee has alleged it is a ruthless schedule of
“sleep, work, sleep, work” causes employees to feel they are going mad and describe conditions like “being in a jail”.
No legal action was taken following the illegal sacking of employees in 2022, giving the company a sense they are above the law. This perception may leave employees feeling insecure in their job roles and
undervalued with being sacked at any point.
