The UK Insolvency Service has decided not to launch criminal proceedings against P&O Ferries over its sacking of nearly 800 workers earlier this year after concluding there was “no realistic prospect of a conviction”.
P&O sparked public outcry in March when it dismissed hundreds of sailors without any prior warning or consultation. Many staff found out they were being made redundant via a video message.
The ferry operator replaced the sacked crew members with staff on more flexible contracts. The replacement staff are paid an average of £5.50 per hour, well below the UK’s minimum wage but legal because the crew work offshore.
Business secretary Kwasi Kwarteng had instructed the Insolvency Service to investigate whether the company had committed any criminal offences in the case.
“After a full and robust criminal investigation into the circumstances surrounding the employees who were made redundant by P&O Ferries, we have concluded that we will not commence criminal proceedings,” the Insolvency Service said on Friday afternoon.
The Insolvency Service said its investigation had been reviewed by an independent prosecution lawyer in accordance with normal practice in such cases. It is still carrying out a separate civil investigation.
P&O Ferries declined to comment.
The decision not to pursue legal action is likely to add fuel to a debate triggered by the sackings over the robustness of the UK’s employment and corporate governance rules.
P&O’s chief executive Peter Hebblethwaite appeared to admit to wrongdoing at a parliamentary hearing in March.
Asked if he had “wilfully” broken the law by paying off staff instead of launching a formal consultation, he said: “I completely hold my hands up . . . we did choose not to consult.”
“There’s absolutely no doubt that we were required to consult with the unions. We chose not to do that . . . and will compensate everybody in full for that,” he said at the time, adding that he would make the same decision again because the company would not otherwise have been viable.
Failing to notify the Insolvency Service in advance of launching a collective redundancy process is a criminal offence and can lead to an unlimited fine. But some maritime workers are not covered by the rule because employers may instead be required to notify authorities in the countries where their ships are registered.
Frances O’Grady, TUC general secretary, said the Insolvency Service had to give a clear explanation for the decision.
“It was a shocking case of mistreatment of working people. And it will be shocking if there is no justice for P&O workers through serious consequences for the firm’s directors under current laws,” she said.
The Insolvency Service’s announcement came a day after DP World, the Dubai-based group that owns P&O, reported record profits of $721mn for the first half of 2022.
DP World did not publish figures showing the financial performance of P&O. Accounts filed in the UK showed P&O Ferries lost a combined £200mn in 2020 and 2021.
Additional reporting by Philip Georgiadis