Skip to main content

Hello. It looks like you’re using an ad blocker that may prevent our website from working properly. To receive the best experience possible, please make sure any ad blockers are switched off, or add to your trusted sites, and refresh the page.

If you have any questions or need help you can email us.

P&O is Brexit in action – ripping up rights in a race to the bottom

This scandal could only happen in a country where unions are weak and the government is prepared to look the other way

Image: The New European

You have to admire the complexity of the legal structures that P&O designed to enable the sacking of British seafarers via Zoom call. The company is owned in Dubai. The ships are registered in Cyprus and the Bahamas – because, obviously, a ship that spends its life shuttling between Larne and Stranraer has to be registered in Nassau. 

The scab workforce was hired by agency firms who now claim they knew nothing about the plan. And all this was done to make sure that 800 mainly British workers earning at least £9.50 an hour could be replaced by foreign agency crews earning, it is reported, £5.50 an hour.

As an example of freemarket globalisation, the move was almost a work of art. But it has foundered – not least because the British public have become sick of this kind of intrigue.

The seafarers were sacked in breach of UK employment law, which requires consultation before mass redundancies like these. But the government has done nothing concrete to reverse the decision. 

It is “consulting” on plans to create “minimum wage corridors” to overcome the fact that, on ferry routes, national minimum wage schemes do not apply. Its inspectors have prevented two of the ferries from sailing, on grounds that their crews were inadequate. Grant Shapps, the Transport Secretary, has threatened “measures” to reverse the sackings.

But in truth, the whole of British employment law – and Britain’s chosen position as an outlier to Europe on social justice – was designed to aid firms like P&O, and its owner DP World, and to disempower trade unions like the RMT and Nautilus who represent the sacked workers.

Consider the economics of the move. The parent company, Dubai-owned DP World, makes almost a billion dollars a year, on a turnover of ten billion, from running container ports and maritime logistics all over the world. It bought P&O Ferries in 2019 from the Dubai government, for £322 million, on the assumption that it would earn money for shareholders from the get-go. 

First came Boris Johnson’s hard Brexit, which reduced the number of passengers and lorries crossing the channel and the Irish Sea. Then came Covid-19, which hit Britain’s whole economy hard. As a result P&O Ferries, already loaded with debt, made losses for two years running. In May 2020, when management asked for 1,100 redundancies, this was done by the book – and unions reluctantly agreed new performance targets and wage restraints.

The firm, in short, was already operating by the seat of its pants, and has now decided that – since it cannot sack that part of the workforce protected by better laws and more active regulations inside the EU, that it must import third-world conditions onto its British ships.

What kind of mindset does it take to knowingly break the law; to hire security goons with handcuffs in case of trouble; to reshape the business model of an entire firm around powerless foreign workers paid half the minimum wage?

Sadly, the bosses who thought this up are not outliers. They are pursuing the imperative to extract maximum value from minimum investment.

It’s been fun watching the Tory outrage, though. Dover MP Natalie Elphicke joining in the chant “shame on you”, oblivious that the seafarers were chanting at her. Tory ministers  venting over the very inhuman treatment that their own light-touch labour laws encouraged.

Because this is what Brexit was supposed to be about. Ripping up red tape in a race to the bottom, not just on labour costs but environmental charges and taxation. This was the story told across British business in the run-up to the referendum, and as Boris Johnson pushed for the hardest possible break.

While it is true that European labour standards still apply, because the government has not formally moved to undercut EU rules and regulations, P&O chose to attack its British workforce because it is here that trade union rights are weakest, and where government is prepared to look the other way. 

The future for P&O Ferries looks bleak. It was bought by Dubai as a job lot with P&O’s more profitable port and logistics operations. It does not fit DP World’s global business model, focused on the booming containerisation of trade across the global south.

If a company can only turn a profit by importing workers from low-wage economies and by breaking the law, you have to ask whether it has a viable business model at all. With its sister companies set to rake in millions in government subsidies to develop Freeports, Westminster has significant leverage over the management of the firm – and should use it.

In France, when Brittany Ferries faced huge losses during the Covid-19 surge, the French government subsidised both the firm and the Brittany region to keep the ferry service afloat. That, effectively, is what we already do with the railway system in every corner of Britain. 

If it turns out P&O needs government cash to survive, it should not only be forced to reverse the sackings and the pay cuts, but take union representatives onto the board, with a British government golden share ensuring control over the executive.

One of the saddest aspects to this shambles concerns the RMT union, which represents the sacked ratings. It’s fighting courageously for its members’ rights, and has rallied the rest of the union movement to its aid. But in 2016, during the Brexit referendum, it urged them to vote Leave. The EU, it said, has encouraged “social dumping”. “Leave the EU to end attacks on seafarers” it told its members. 

Well P&O is still engaged in “social dumping” – that is the transfer of low wages and poor conditions into high-wage and unionised economies – with Britain well outside the EU. Because, as many of us pointed out at the time, that was the point of Brexit.

Hello. It looks like you’re using an ad blocker that may prevent our website from working properly. To receive the best experience possible, please make sure any ad blockers are switched off, or add to your trusted sites, and refresh the page.

If you have any questions or need help you can email us.

See inside the Monarchy. RIP edition

Image: The New European

Everyday Philosophy: Does wisdom always come with old age?

Cicero famously said that old age is the final act in the play of life. But that doesn't always mean wisdom plays a part in it

Image: The New European

After him, the deluge

Polls show Emmanuel Macron heading for a repeat run-off and victory against Marine Le Pen. But France’s longer-term future looks bleak