Whitehall memo ‘tried to justify P&O Ferries’ sacking of 800 workers’

A memo sent across Whitehall before P&O Ferries sacked 800 of its staff tried to justify the decision, a newspaper report has claimed.

The document said the company’s now widely condemned move would “ensure (it) remains a key player in the UK market for years to come through restructuring”, The Sunday Times said.

Apparently written by a senior official, the memo talked about the re-employment of staff on “new terms and conditions” and mentioned agency staff.

It added that the move would “align” P&O Ferries with other companies which had “undertaken a large reduction in staff”.

Transport Secretary Grant Shapps received a copy and officials in his department knew of the redundancies on Wednesday – a day before the dismissals went ahead – the newspaper added.

Recipients are said to have included the prime minister’s private office.

The memo reportedly said: “We understand that P&O Ferries have an intention to try and re-employ many staff on new terms and conditions or use agency staff to restart routes; they estimate disruption to services lasting 10 days.

“Without these decisions an estimated 2,200 staff would likely lose their jobs. These changes will align them with other companies in the market who have undertaken a large reduction in staff.”

The Department for Transport (DfT) said the document was sent “before ministers were advised of the full details”.

It said in a statement: “This was an internal government memo which, as standard practice, outlined what officials had been told by P&O Ferries shortly before their announcement was made.

“This was sent before ministers were advised of the full details and as soon as they were informed, they made clear their outrage at the way in which P&O staff had been dismissed.

“It is clear from the memo that our immediate priority was to work with unions to ensure workers’ rights continue to be protected and the transport secretary has urged the company to sit down with workers and reconsider this action.”

On Friday afternoon, Mr Shapps and Business Secretary Kwasi Kwarteng mistakenly sent strongly worded letters to a man who is no longer chairman of P&O Ferries.

Mr Kwarteng later corrected his error. His letter to Peter Hebblethwaite, current CEO of P&O Ferries, said the company “appears to have failed” to follow the process for large-scale lay-offs, including negotiations with employee representatives, and called for P&O officials to answer 10 questions by the end of play on Tuesday.

Mr Shapps told Sky News it is “not too late” for the company to consult with workers.

He has also ordered a review of all government contracts with both P&O Ferries and its parent company, DP World.

P&O Ferries said it had taken the “difficult decision” as a “last resort” and insisted the business would not have survived otherwise.

It also said it “understood” the “distress” its decision would have caused but felt that “reaching agreement on the way forward” was “impossible”.

Louise Haigh, Labour’s shadow transport secretary, said the “bombshell” memo showed the government was aware of an attempt to use “exploitative fire and rehire practices” but “sat back and did nothing”.

RMT union spokesman Daren Ireland said that – in the memo – the DfT “seem to be warming to the employers’ argument”.

But he added: “They’re failing to take into account the £270m worth of dividends paid out by DP World.

“So [they’re] clearly failing to step up to the plate of protecting the jobs of ratings within the UK maritime industry.”

Last year, DP World’s revenue rose by more than a fifth to more than $4.9bn (£3.7bn), while its profit increased by almost $300m to $732m (£555m) before tax.

It did, however, claim about £10m to furlough 1,100 workers during the pandemic, suggesting cash flow problems.

Read more:
P&O Ferries resumes limited service after 800 staff sacked
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