£4.87 an hour | Legal loophole sees P&O Ferries staff paid less than half of UK minimum wage

Legal loophole sees P&O Ferries staff paid less than half of UK minimum wage

Shipping company P&O Ferries has been paying some crew members less than half the UK minimum wage, thanks to a legal loophole that was supposed to be axed two years ago in the wake of a previous P&O scandal, according to reports.

Analysis of worker payslips conducted by The Guardian and ITV news found that agency workers at the company have reportedly been earning as little as £4.87 an hour. By comparison, the last time the UK minimum wage was lower was in 2004, when it sat at £4.85 an hour.

P&O Ferries have been manned by agency staff for the past two years after bosses controversially sacked 800 staff without notice in March 2022. The new crews are primarily sourced from countries such as India, the Philippines and Malaysia, The Guardian reports, and are thought to be working 12 hour shifts for seven days a week.

The UK minimum wage rises to £11.44 an hour from next month (April 2024), however this doesn’t apply to maritime workers who are employed by overseas firms and work on foreign ships in international waters.

P&O’s parent company, DP World, is based in Dubai, thus circumventing the minimum wage law for its sea crews.

2022 mass sacking

The news of P&O’s low wage loophole comes almost exactly two years after the company sparked outrage when hundreds of staff were told, via a video message, that March 17 2022 would mark their final day of employment. 

In the same recorded clip, the firm told staff they were being replaced with cheaper agency staff, the very same which are now being paid below minimum wage.

Bosses at the Trade Union Congress (TUC) reported at the time that staff were threatened with handcuffs if they refused to leave their ships.

The mass sacking was dubbed one of the "most shameful acts in the history of British industrial relations", later branded as a “jobs massacre”. P&O said it was a "tough" decision, but it would "not be a viable business" without the changes.

In the aftermath, the then-business secretary Grant Shapps pledged to eradicate maritime pay below the UK’s minimum wage. But two years on, the new UK law has received Royal Assent but has not yet been implemented, thus allowing P&O to keep paying crews below the minimum wage.

This may all change soon, however, owing to a new law being imposed by France, which will force cross-Channel ferry operators to pay their crew at least £9.95 an hour.

Similar legislation in the UK to prevent crew being paid less than the minimum wage is expected to come into force this summer. 

A spokesperson for P&O Ferries said: “We always pay at least the minimum wage required by national and international law.

“In addition to wages we provide all meals, modern accommodation, gym and sauna, and travel to and from their home country including flights for international workers coming on to our ships.

“We provide an industry-leading support package and work hard to ensure their welfare, wellbeing and mental health are properly cared for.

“The tough but necessary changes we made to the business mean that P&O Ferries and 2,200 jobs have been saved. In 2023 we transported goods worth hundreds of millions of pounds between the UK and Europe; and carried 3.5 million tourists across the Channel on our modern fleet.”

A Department for Transport spokesperson added: “We have worked at pace to bring forward our Seafarers’ Wages Act, consulting extensively with industry and unions to ensure we have ironclad legislation in place to help prevent this from happening again, while working to strengthen seafarer rights around the world.

“We expect to bring this into force in the summer, around the same time as French legislation, forming an international minimum wage corridor across the Dover strait.”

Ministers have “done nothing” to stop another P&O scandal, union heads say

In a joint statement released on the two year anniversary of P&O’s mass sacking, the TUC, Nautilus and RMT warned that another similar scandal could be on the cards as a result of government inaction.

The union collective said: “Two years have since passed – but the government has done nothing to stop another P&O Ferries scandal.   

“Despite admitting to acting illegally, P&O Ferries have faced no sanctions and have seemingly been let off the hook.” 

The unions said ministers have failed to act on rogue employers, adding: “Having feigned outrage at P&O Ferries’ actions, ministers have reneged on their promise to clamp down on bad bosses, failed to deliver an Employment Bill and failed to close the legal loopholes exploited by P&O Ferries.

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“And the paltry reforms that they have pushed forward fall far short of what’s needed. P&O Ferries priced-in the illegal mass sacking of hundreds of seafarers. Their bosses at DP World sanctioned the breaking of UK law and could afford to do so.   

“The government’s feeble code of practice on fire and rehire only makes breaking the law a bit more expensive, which will do nothing to deter deep-pocketed rogue employers.”

The statement added: “For too long parts of our labour market have been like the wild west – with many seafarers particularly exposed to hyper-exploitation and a lack of enforceable rights and unsafe employment conditions. 

 “It’s time to drag our outdated employment laws into the 21st century. Without this, another P&O Ferries scandal is on the cards.” 

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