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P&O Ferries paid some workers £4.87 an hour through agency loophole

Unions issued a joint statement calling for a mandatory seafarers’ charter and boosted workers’ rights

P&O Ferries has paid some seafaring workers less than half minimum wage, according to a report from The Guardian.

The news comes two years after the shipping company sacked about 800 workers, replacing many with agency workers and sparking outcry from workers and unions.

A P&O Ferries representative told parliament in March 2022 that the lowest pay rate for these workers was £5.15 an hour. However, The Guardian reported that recent payslips showed some workers have been earning as little as £4.87 an hour.

A spokesperson from P&O Ferries said it didn’t recognise the pay rates of below £5 an hour, and that it always pays at least the minimum wage required by national and international law.

The UK minimum wage is currently £10.42 an hour and will rise to £11.44 an hour from April 2024. 

Read more: The P&O Ferries aftermath: gaming the system or business as usual?

Matt Jenkin, employment partner at law firm Herrington Carmichael LLP, said that P&O is using a loophole to pay workers below minimum wage.

He told HR magazine: “Given the complex nature of the engagement, which involves an overseas agency employing maritime workers who work on foreign registered ships as international workers, the national minimum wage wouldn’t apply.  

“This loophole in the application of the national minimum wage was a concern raised back in March 2022 when P&O dismissed some 800 cross channel ferry workers in controversial circumstances, replacing them with cheaper agency workers."

Grant Shapps, who was the UK’s transport secretary when P&O fired its workers in March 2022, had promised to legislate to improve pay for cross-Channel ferry workers. However, the government has so far failed to deliver this legislation.

Last week (17 March), The Trades Union Congress (TUC), Nautilus and National Union of Rail, Maritime and Transport Workers (RMT) issued a joint statement calling for a mandatory seafarers’ charter and boost to workers’ rights.

Read more: P&O scandal adds new fire to Employment Bill demand

The statement said: “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“It’s time to drag our outdated employment laws into the 21st century.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.” 

In February 2024, the government issued a statutory code of practice. The statement also said stronger laws are needed around fire and rehire tactics.

Jenkin said: “Although not a classic 'fire and rehire' exercise and more like a fire and replace with (cheaper) agency workers, P&O’s decision to dismiss staff in March 2022 nonetheless acted as catalyst for the proposed code of practice on dismissal and re-engagement, likely to come into effect at some stage in the summer of 2024.”

The unions’ statement said: “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.”