P&O Ferries will pay more than £36m in compensation to laid-off staff, with 40 staff up for payments in excess of £100,000, the company has announced.
It comes after nearly 800 workers were summarily laid off last week, prompting backlash from across the political spectrum.
The company said payouts were linked to length of service and would exceed £170,000 in some cases.
It comes as a spokesman for Economy Minister Kwasi Kwarteng confirmed the government had received a letter from P&O Ferries in response to its questions about the shock move by the 5pm deadline on Tuesday.
The total value of the settlement is £36,541,648, with no worker receiving less than £15,000, the company said.
Employees are also assisted in finding a new job at sea or on land.
The ferry giant said 575 of the 786 affected seafarers were in talks to move forward with the settlement offers.
A spokesman for P&O Ferries said: “This has been an incredibly difficult decision for the company: to make this decision or to declare bankruptcy.
“It would have meant the loss of 3,000 jobs and the end of P&O Ferries.
“By making this difficult decision we have guaranteed the future viability of P&O Ferries, avoided large scale and protracted disruptions and secured the UK’s trading capacity.”
The company said that subject to the settlement agreement, it would pay 2.5 weeks of uncapped salary for each year of service, rather than the statutory or 1.5 weeks.
It also offers 13 weeks salary in lieu of termination and 13 weeks salary on top of that without counseling.
P&O Ferries said the settlement is believed to be the largest compensation package in the UK shipping sector.
But Mick Lynch, general secretary of the Railway, Shipping and Transport Union (RMT), said that “paying in lieu of notice is not compensation”.
“It’s just a payment that the employees are contractually entitled to because there hasn’t been a termination,” he said.
“The way the package has been structured is pure blackmail and threats – if employees don’t sign up and give up their jobs and their legal right to take the company to an employment tribunal, they’ll get a fraction of the amount they’re asking for .
“P&O’s actions show the weakness of labor law and health and safety in the UK. P&O has blatantly broken the law and abandoned all standards of decency in the workplace.
“They have taken our members’ jobs, careers and pensions away and threw them on unemployment benefits with the threat of losing many thousands of pounds in payments if they don’t register and give up their rights.
“This is totally unacceptable and RMT will continue to campaign for the reinstatement of our members at P&O and for better labor laws to protect all UK workers.”
Meanwhile MPs have said they are keen to question P&O Ferries CEO Peter Hebblethwaite.
Mr Hebblethwaite has been invited to an evidence meeting to be held jointly by the Commons Business, Energy and Industrial Strategy (BEIS) and Transport Committees on Thursday March 24 to consider options for government and workers who want their jobs have lost are available .
In a statement, committee chairs Darren Jones and Huw Merriman said: “Our P&O Ferries members want to know why this action has been taken and how it can be justified.
“We want confirmation from the government and its agencies that our laws are not being broken and that the safety of our ships is not being endangered.
“This shocking story has raised questions about UK labor law, safety practices, how to support this company during a pandemic and the legal remedies available.
“We intend to hear from the key players what they will do to ensure these workers are not left stranded.”
Last week, Mr Kwarteng wrote to Mr Hebblethwaite to say P&O Ferries had “lost public confidence” and “given the business a bad name”.
The letter called for answers to a series of questions about what had happened, with a response no later than 5pm on March 22.
A BEIS spokesman said on Tuesday: “We have received a reply to the Secretary of Commerce’s letter to P&O and are considering their explanations.
“We will continue to work expeditiously with the Bankruptcy Service to assess whether legal action is necessary and will provide an update as soon as possible.
“In light of recent reports of employees being paid below the national minimum wage, the Secretary of Commerce has also asked the Inspectorate of Labor Agency Standards to investigate the terms of agency workers’ contracts.”
The Nautilus union said in a statement: “It has taken the company five days to issue some sort of statement to the public, not an explanation of its outrageous and illegal actions but an admission of guilt which it intends to brush aside for money.”
“P&O Ferries’ shameless actions now extend to attempting to buy their way out of a legal predicament revealed by the unions, a requirement to report to the Foreign Secretary and to consult with recognized unions.
“P&O Ferries claims to be offering the ‘biggest compensation package in the UK shipping sector’ – a company in such dire financial straits that it is willing to pay £36.6million for a sham redundancy.
“To be clear, this statement is a confirmation that P&O Ferries believes that despite the lustrous commitments of its parent company in Dubai, having enough funds does not mean obeying that country’s laws or being hampered by ethical business standards will.
“Instead, it intends to get our maritime professionals to sign settlement agreements to buy their silence.
“Nautilus members have been put under intense pressure by P&O Ferries management to accept these redundancy terms, while at the same time being threatened with the bid being withdrawn if they speak to the press or demonstrate against the company.
“We are not surprised that many of our members are voting with their feet and leaving.
“We seriously doubt that many will return for reduced terms and the promise of a bonus in 12 months from a Maltese team that didn’t exist five weeks ago.
“This company has been mismanaged, there is no doubt about that. Questions must be asked about the directors who brought down a once proud company with almost two hundred years of history.”
Nautilus General Secretary Mark Dickinson said: “We are demanding that P&O Ferries work with the recognized unions, reinstate any workers who have been made redundant and discuss our serious safety concerns about how the company now plans to operate the ships.
“Only then will P&O Ferries be able to live up to its legacy, contribute to the implementation of the Government’s Maritime 2050 strategy and undo the damage it has done not only to the nation’s standing but also to its own reputation and once proud ones.” Shipping has inflicted mark.”
TUC General Secretary Frances O’Grady said: “Ministers must rush to P&O like a ton of bricks.
“If P&O is allowed to get away with a slap on the wrist, it will give employers across the country the green light to treat employees like disposable workers.
“The government needs to hit the company where it really hurts. That means all of P&O’s licenses will be immediately suspended and its lucrative freeport contracts terminated until all workers are reinstated.
“Tomorrow the Federal Chancellor must show with his declaration that he is ready to stand up to bad bosses. Not a cent of taxpayers’ money should go to companies that trample on workers’ rights.”
https://www.mirror.co.uk/money/po-ferries-pay-more-36million-26534511 P&O Ferries pays more than £36m in compensation to 800 redundant employees