The UK Insolvency Service has decided not to bring criminal proceedings against P&O Ferries for laying off nearly 800 workers earlier this year after concluding there was “no realistic prospect of conviction”.
P&O sparked a public outcry in March when it fired hundreds of seafarers without prior warning or consultation. Many employees found out they were being fired through a video message.
The ferry operator has replaced laid-off crew members with staff with more flexible contracts. Replacement staff are paid an average of £5.50 an hour, well below the UK minimum wage but legal as the crew work overseas.
Business Secretary Kwasi Kwarteng had instructed the Insolvency Service to investigate whether the company had committed any criminal offenses in the case.
“After a full and robust criminal investigation into the circumstances surrounding the employees terminated by P&O Ferries, we have concluded that we will not pursue criminal charges,” he added. the insolvency service said Friday afternoon.
The Insolvency Service said its investigation had been reviewed by an independent prosecutor, in line with normal practice in such cases. He is still conducting a separate civilian investigation.
P&O Ferries has been contacted for comment.
The decision not to sue is likely to fuel a debate sparked by the redundancies over the strength of UK rules on employment and corporate governance.
P&O chief executive Peter Hebblethwaite appeared to admit wrongdoing during a parliamentary hearing in March.
When asked if he had “willfully” broken the law by paying staff instead of launching a formal consultation as required by law, he replied: “I completely raise my hand…we chose not to consult.
“There is no doubt that we were required to consult the unions. We chose not to. . . and will compensate everyone for it,” he said at the time, adding that he would make the same decision again because the business would not have been viable otherwise.
Failure to notify the Insolvency Service before initiating collective redundancy proceedings is a criminal offense and may result in an unlimited fine. But some maritime workers are not covered by the rule because employers may be required to notify the authorities of the countries where their ships are registered.
The insolvency service’s announcement came a day after DP World, the Dubai-based group that owns P&O, announced record profits of $721 million for the first half of 2022. Frances O’Grady, chief union organization TUC, called the benefits “an insult to good morals”.
DP World has not released figures showing P&O’s financial performance. Accounts filed in the UK showed P&O Ferries lost £200million in 2020 and 2021.
Additional reporting by Philip Georgiadis