Ferry operators face minimum wage law changes in wake of P&O sackings

The UK government is to close a loophole allowing ferry operators to pay less than the national minimum wage, it was reported on Monday, as it moves to force P&O Ferries to rehire the 800 workers it fired earlier in March.

Appearing before MPs last week, P&O chief executive Peter Hebblethwaite admitted the company had broken the law by not consulting with unions or government before the mass sacking

But he insisted that the company, which was losing £100m a year, would not survive without the changes.

It will now slash its employment costs by using agency workers instead and paying them £5.50 an hour, well below the UK’s current minimum hourly rate of £8.91.

Ferry operators that use UK ports but are registered overseas are able to pay their workers less than the minimum wage.

But the government is now poised to introduce legislation as early as this week to close that loophole. According to numerous newspapers, a source close to transport secretary Grant Shapps said that if Hebblethwaite “doesn’t perform a U-turn, we will force him to do it anyway. We hope they will see reason and step back.

“We will make it impossible for ferry companies to operate rom UK ports without paying the national minimum wage.”

However, the Rail, Maritime and Transport Workers Union has also said it would not accept minimum wage, and that P&O Ferries should honour the workers’ existing employment contracts.

Government officials are understood to be meeting rival operators Stena Line and DFDS on Monday to discuss the proposed legislation, as well as ways of managing any possible travel difficulties if P&O services remain disrupted.

Unions have been protesting the mass sacking, with demonstrations taking place at various docks. All P&O ferries are also subject to inspections before being allowed back into service, with one ship – the European Causeway – impounded in Northern Ireland last week. The Maritime and Coastguard Agency found it “unfit to sail” because of “failures on crew familiarisation, vessel documentation and crew training”.

P&O is owned by Dubai-based DP World. Neither P&O nor DP World have so far commented on the proposed legislative changes.