P&O Ferries and Employment Rights

Jerome Mayhew Excerpts

Monday 21st March 2022 Commons Chamber

[Laura Farris (Newbury) (Con)]

What happened to the workers at P&O is one of the most disgraceful examples of industrial practice in my adult lifetime. It speaks not to the weakness of our employment laws but to their strength that the Trade Union and Labour Relations (Consolidation) Act 1992 and the Employment Rights Act 1996 have, for the last 30 years, rendered cases such as this so rare that we are debating one such case in Parliament today. What is extraordinary about this case is not that the laws did not exist, but that P&O, or DP World, thought it could break them with impunity. Let us take a moment to establish what those laws are.

My hon. Friend the Member for Bexhill and Battle (Huw Merriman) spoke about section 193 of the 1992 Act, which provides for a statutory obligation to inform the Secretary of State 45 days before any proposed redundancies could take place. That law has been broken. Section 188 provides for a duty to consult 90 days before any dismissal takes place; that law has also been broken. Section 86 of the Employment Rights Act, on the duty to give notice, and section 98, on unfair dismissal? Those laws too have been broken. The question for the House is why DP World thought it could do that, and the issue, I think, is enforcement.

It is true that failure to notify the Secretary of State is a criminal offence, but I can think of no example in my lifetime in which any criminal proceedings have been brought against any employer anywhere in the United Kingdom since the passing of the 1992 Act. The fact is that a breach of this nature is so rare that parliamentarians have probably not had to worry about it, but none the less we have not insisted on it, and I was glad to hear the Secretary of State say that he would consider enforcing section 194 in this exceptional circumstance.

[Jerome Mayhew (Broadland) (Con)]

Section 194 relates to a summary offence, punishable by a level 5 fine, but the Secretary of State referred to another section which gave rise to an unlimited fine. Does my hon. Friend agree that in such an extreme circumstance as this, the egregious nature of the sackings and the number of people involved would constitute gross aggravating factors in consideration about the size of an “unlimited” fine?

[Laura Farris]

I think that that is correct, and I think that that was what the Secretary of State was alluding to. It is also the case that DP World has obviously concluded that it would prefer to make a severance payment that takes into account the 90-day consultation period, the notice period and the redundancy period, because that is less hassle for them than going into a consultation for 90 days with the RMT and facing strike action.

I will come to my solution in a moment, but I want first to briefly address what Labour Members have said about banning fire and rehire. The hon. Members for Ogmore (Chris Elmore) and for Sefton Central (Bill Esterson) said that the commendable private Member’s Bill presented by the hon. Member for Brent North (Barry Gardiner) would have done that. Let me, with great respect, refresh the House’s memory. The hon. Gentleman said at the time:

“I have no intention in this Bill of banning, and there is nothing in this Bill that would ultimately ban, fire and rehire. There is an important reason for that and I will come on to it in my speech.”—[Official Report, 22 October 2021; Vol. 701, c. 1051.]

--- Later in debate ---

[Jerome Mayhew (Broadland) (Con)]

I wanted to take part in this debate because I wanted there to be a united front in condemnation of P&O’s tactics in firing 800 seafarers without notice via Zoom last Thursday. I watched that Zoom video, which was extraordinary and amateur. It thanked staff for their service while sacking them with immediate effect and without notice.

The motion condemns the decision of P&O to fire 800 staff without notice and demands their reinstatement. Despite the anger among Opposition Members, I think that this is a case of us furiously agreeing with each other, because we have shared overriding objectives. We must try to get those seafarers reinstated, and it is only if we cannot achieve that first objective that we should move on to secondary objectives, including making sure that this tactic is not seen to work either for DP World/P&O or as an example for other employers. It is really important that we set a standard and make a stand. It is quite right that through this debate—I congratulate the Opposition on calling it—we maximise public pressure on DP World to reconsider.

The Maritime and Coastguard Agency also needs to make absolutely sure that the re-manned vessels comply with all safety regulations. That means physical inspections and crew-related training and safety drills. No benefit of the doubt or leeway should be given to this business. I am not suggesting adopting discriminatory behaviour towards the company. However, if a company has lost the trust of the Government and of the public, it should be up to it to prove compliance.

I welcome the announcement that the Insolvency Service is being asked to look into the potential for a criminal prosecution and an unlimited fine. I have already mentioned that in an earlier intervention. It is also right that the Government immediately instructed officials to review all Government contracts. I understand that the Government must comply with any legal relationships that they have already entered into, but thereafter there should be no further positive relationship with a company that has forfeited its good name. The company I have in mind is DP World, not just P&O Ferries. P&O took the decision to follow the money. We need to challenge and change that calculation, to make sure that the sums for this act no longer add up.

We have to recognise that the business losses of P&O Ferries have been substantial and over a prolonged period. It is losing more than £100 million a year on an annual turnover of not much more than £600 million. That is unsustainable in the long run, even with a profitable parent company. The answer may be that a restructure is the only way to prevent the loss of the entire business, leading to many more—an additional 2,000—job losses. My complaint is not necessarily about the business decision to restructure, but about the manner and approach of P&O Ferries. There is no immediate and catastrophic change in circumstances—it has been like this for the past couple of years. There is and there has been time for notice and for consultation. There has been and there is time to work with staff to at least try to agree a route back to sustainable profitability, yet it has not even been attempted. No reason has been given for failing to treat employees seemingly within the realms of the law. This is a case of terrible business mismanagement, flouting the law in a calculation that money will be saved. We have to make sure that that calculation is wrong.

--- Later in debate ---

[Justin Madders (Ellesmere Port and Neston) (Lab)]

We have heard some excellent speeches today from my right hon. Friend the Member for Hayes and Harlington (John McDonnell) and my hon. Friends the Members for Kingston upon Hull East (Karl Turner), for Middlesbrough (Andy McDonald), for Sefton Central (Bill Esterson), for Brent North (Barry Gardiner), for Wansbeck (Ian Lavery), for Brentford and Isleworth (Ruth Cadbury), for Salford and Eccles (Rebecca Long Bailey), for Easington (Grahame Morris), for Leeds East (Richard Burgon) and for Mitcham and Morden (Siobhain McDonagh).

I pay tribute to my hon. Friend the Member for Mitcham and Morden and her campaigning on this issue over the past six years. She was absolutely right to talk about the work she has done there and the long list of employers that have tried this before, many successfully, highlighting exactly why a change is needed. Time prevents me from mentioning every speech in detail, but I will refer to the speech by my hon. Friend the Member for Kingston upon Hull East—a powerful and deeply personal speech about why this situation matters so much to him. As we heard, he has been campaigning on these issues for years, and surely now we must all regret that the Government have failed to heed his warnings.

My hon. Friend called this action industrial vandalism, and that sums up the situation perfectly. What has happened to P&O workers is nothing short of a scandalous betrayal. Workers with families to support, bills to pay and lives to live had their plans upended in three minutes by an unscrupulous employer acting in the most cynical and calculating way. Every Member of this House should be united in condemning the brutality we have seen: thugs for hire, some wearing balaclavas and carrying handcuffs, turning up to boot people off the ship straight after they were sacked on a three-minute video call. If that is not bad enough, the pariahs responsible for this had already lined up cut-price workers at the dockside to replace them: workers who, let us be clear, are going to be paid at a rate that drives a coach and horses through the minimum wage laws. Those who have been sacked have also been threatened with losing what little compensation they have been offered if they talk to anyone about it, further compounding the sense of injustice they feel and further exposing the bully-boy tactics of their employer.

We need to be clear that this decision cannot stand. Unscrupulous employers cannot be given free rein to sack their workforce, destroying secure jobs and replacing them with cheap, insecure agency work. Such actions must have consequences. Every tool at the disposal of the state must be used to its maximum effect, because if one company can divest itself of responsibility for its workforce in such a callous, cynical and frankly offensive manner without a serious response from Government, then others will see that as a green light to do exactly the same. This must be a line in the sand.

Condemnation, while necessary, is insufficient, and condemnation after the event from a Government who knew it was about to happen is simply not good enough. As we heard from my hon. Friend the Member for Sheffield, Heeley (Louise Haigh), a memo was circulated beforehand that makes it clear that the intention of P&O was to replace staff on lower terms and conditions, and with agency workers.

[Jerome Mayhew]

rose—

[Justin Madders]

I am sorry but I do not have time to give way.

That means that the Secretary of State should have known that this was not an ordinary redundancy situation. The memo also says that disruption was expected to last for 10 days. Why would there be disruption if normal consultation procedures had been followed? The Secretary of State himself said that previous redundancies had been made in the past few years and consultation procedures had been followed, but there was no disruption then, so it was absolutely clear that there was going to be something different this time. Despite those warnings, the Government could not find the time to make one single phone call before P&O went ahead with the sackings, neither to the company nor indeed to the trade unions. All the anguish, distress and heartbreak for these 800 families could have been avoided if Ministers had made the effort to contact P&O before it went ahead with its plan. Having said that, given that their first attempt at letter-writing to P&O after the horse had bolted was addressed to somebody who left the company last year, I do wonder how effective such interventions would have been. As we have heard, the Secretary of State’s big demand of P&O is that it change the name of the ship: absolutely pathetic.

The internal Government memo makes it clear that there is a level of acceptance that these measures are necessary to ensure that P&O can stay competitive, but paying workers well below the minimum wage is not being competitive; it is cheating the system. Sacking permanent staff and replacing them with agency workers is not being competitive; it is yet another example of a big company chipping away at job security and safety just to make a few extra quid.

[Justin Madders]

I am grateful to my hon. Friend, who has made another excellent point. There really are serious safety concerns. We have to be absolutely crystal clear that the Government are enforcing all safety checks, because people simply cannot get on to a ship without any experience or knowledge of it beforehand, and that certainly cannot be done with an entire crew while expecting things to run okay.

[Jerome Mayhew]

Will the hon. Gentleman give way?

[Justin Madders]

No, I do not have time—I am sorry.

The memo that the Government issued makes it clear that they are content for companies to ride roughshod over good employment practice. The net result is that bad employers have been emboldened by how little this Government do to protect the rights of workers. They think they can abuse workers and get away with it because for 12 years this Government have allowed exploitative work models to grow unchecked. They have let fire and rehire practices proliferate entirely untouched by legislation. Yes, guidance has been issued by ACAS, but that has not changed the legal position one bit. It has merely restated the existing law, but that law has been shown to be hopelessly unbalanced against the worker, open to abuse, and totally unacceptable in 2022.

The Government have the power to institute criminal proceedings against directors for this—I can assure the House that those P&O staff being sacked last Thursday felt like criminals when they were confronted with security guards carrying handcuffs—but it is those responsible for the decisions who are the true lawbreakers. Exactly how many people in the past have been prosecuted and hit with those unlimited fines? If anyone has been successfully prosecuted and fined for breaching these rules, the Government have kept remarkably quiet about it. Let us hope that this time the threats made to P&O are not empty and the Government follow this right through to the end and actually make some noise about it. If that does not happen, they must understand that they continue to send the message to these bad employers that they can carry on with impunity and that this Government are more interested in protecting their own Back Benchers’ second jobs than everyone else’s first.

On the review of DP World contracts, when will the Minister be able to update the House on the outcome of that? Why are the Government still just considering removing P&O from Government advisory boards? Why have they not done it already? What more evidence do they need that P&O is totally unfit to be part of these bodies? Labour stands firmly with the P&O workers and the work being done by the RMT and north-west unions to stand up for them. Today we are asking all Members to join us in standing up with them and for the rights of all workers, who deserve security and respect in return for an honest day’s work.

This is an opportunity for us to really say what kind of country we want. Insecurity is baked into so many workplaces that it is little wonder that so many people feel a sense of helplessness and inevitability about what has happened in this case. But it does not have to be this way. Job security does not have to be out of reach to millions; it should be the basic cornerstone of any civilised society, and one building block of that has to be an end to fire and rehire.

The destructive combination of weak employment laws, opportunistic employers and an indifferent Government is leading to a race to a bottom, and it is time that race was stopped. It is in all our interests that we have strong workforce protections. A secure workforce is a productive workforce. It is good for employers and good for the economy. It creates a level playing field. Do we really think it is a healthy sign for our economy that the only way businesses think they can get ahead is for their staff to be paid £1.80 an hour and to live in a tent? Is that what we really want as a future for our country? Are we not here to try to improve the lives of the people we represent? Do we not think that security, fair pay and decency in the workplace are central to that?

For too long the pendulum has swung too far away from protection at work and too far into the hands of those who wish to exploit British workers. Changing that is a fundamental part of why Labour Members are here. We should not be bystanders but defenders of working people and workplace rights. If we let this go now, who will be next? Without job security, people have no security. We cannot—we must not—continue to allow the worst excesses of capitalism to stick two fingers up at the workers in this country. It is time that these disgusting practices met their end.

It is time that this place sent out a message—a message that was backed up by the full force of the law. We are not going to be the soft touch of Europe, we are not going to be the easiest of easy pickings for the billionaires who want to boost their profits still further, and we are not going to be a country where loyalty is rewarded with the sack and the race to the bottom is all that matters; we are going to be a country where employment protections have strength and meaning, where security, prosperity and respect run through every workplace like a golden thread, and where those who seek to undermine those values and rules are sent packing. I commend this motion to the House.