P&O Ferries has paid some crew less than half UK minimum wage

<span>P&O Ferries said it did ‘not recognise’ the pay rates of below £5 an hour.</span><span>Photograph: Gareth Fuller/PA</span>
P&O Ferries said it did ‘not recognise’ the pay rates of below £5 an hour.Photograph: Gareth Fuller/PA

P&O Ferries, which controversially sacked about 800 workers in 2022, has paid some crew members less than half the UK minimum wage thanks to an ongoing legal loophole the British government promised to close two years ago.

Agency workers at the company, which is owned by the Dubai-based DP World, have in some cases been earning about £4.87 an hour – even lower than the £5.15 an hour the company suggested was its lowest pay rate – an analysis of recent payslips conducted by the Guardian and ITV News suggests.

The low-cost crew, who replaced many of the workers P&O axed two years ago, are being hired from countries including India, the Philippines and Malaysia.

They are understood to be working 12-hour daily shifts, without a day off for months at a time, on the Dover to Calais route. One worker described the whole experience as like being in “jail”.

Grant Shapps, who was the UK’s transport secretary when P&O fired its workers in March 2022, had promised to legislate to improve pay for cross-Channel ferry workers. At the time he accused the ferry company of operating like “pirates of the high sea” and wrote to the company to state: “This government will not stand by while the requirement to treat seafarers with due respect and fairness is brazenly ignored.”

While the British government has so far failed to deliver legally binding pay rates equivalent to the UK minimum wage, the French government is poised this week to make its own response to P&O’s sackings, with the introduction of legislation that will force cross-Channel operators to pay their workers the French minimum wage of at least €11.65 (£9.95) an hour.

The UK minimum wage now stands at £10.42 an hour and will rise to £11.44 an hour from April – but the rates do not apply to maritime workers employed by an overseas agency who work on foreign-registered ships in international waters.

Louise Haigh, the shadow transport secretary, said: “Ministers cannot sit back any longer and allow these exploitative employment practices to continue at sea.”

A spokesperson for the Department for Transport said the government had “worked swiftly within the parameters of the parliamentary system” to address a “complex issue involving the minimum wage, ports, and international maritime law”. The department is expecting its Seafarers’ Wages Act, which will ensure workers onboard ferries are paid at least an equivalent to the UK national minimum wage, will come into force this summer.

Sunday marked the second anniversary of P&O’s sacking of hundreds of workers without consultation or notice. The company replaced them with overseas agency staff on pay rates which it told parliament in March 2022 averaged £5.50 an hour – with the lowest-paid earning about £5.15 an hour.

However, payslips of P&O workers from the past four months, which have been seen by the Guardian and ITV News, suggest crew members may be earning even less than the company said. The average hourly rate on the payslips appears to be about £4.87, excluding holiday pay, according to the Guardian’s analysis. The UK minimum wage, which experts say would also exclude holiday pay, has been above that level for 20 years.

Darren Newman, the founder of Darren Newman Employment Law, said: “Describing the hourly rate to include holiday pay is not a genuine reflection of how much a worker has been paid for the work they have done. For comparison purposes with UK rates, holiday pay should be excluded before working out the hourly rate that the worker is receiving.”

P&O Ferries said it did “not recognise” the pay rates of below £5 an hour and a spokesperson added: “We always pay at least the minimum wage required by national and international law.”

He added that all crew on the firm’s Dover to Calais route earned the equivalent of £5.20 an hour – a figure that appears to be higher because it includes holiday pay, according to the Guardian’s calculations.

After the 2022 sackings, Shapps echoed public outrage, telling the Commons’ transport select committee that it was “completely unsustainable” for P&O’s chief executive, Peter Hebblethwaite, to remain in position.

He then wrote to Hebblethwaite, promising: “I will be bringing a comprehensive package of measures to parliament to ensure that seafarers are protected against these types of actions in the way that parliament and this government already intended.

“Through that package, I intend to block the outcome that P&O Ferries has pursued, including paying workers less than the minimum wage.”

Hebblethwaite told a joint hearing of the Commons business and transport committees in March 2022 that P&O Ferries decided not to consult trade unions before sacking the workers in order to “save this business”. He rejected calls to resign.

The new UK law, which aims to force ferry operators to pay rates equivalent to the UK minimum wage, is still not active despite receiving royal assent. This means cross-Channel ferry workers can continue to be legally paid less than the UK minimum wage two years on from Shapps’s comments.

P&O crew members interviewed by the Guardian and ITV News said they worked 12-hour shifts, seven days a week, for up to 17 weeks at a time. The workers said they must remain on the ship until their contract ends.

“It’s the same place, the same people, you cannot go outside,” one crew member said. “[It’s the] mental stress. You go crazy. Every day it’s sleep, work. Sleep, work. That’s it.”

Another crew member said the work felt “like [being in] a jail”.

All of the payslips inspected by the Guardian and ITV News were issued to workers from far-flung countries by a Maltese recruitment business, the documents further suggest.

In addition to his promise to eradicate maritime pay below the UK’s minimum wage, Shapps also told P&O he would review its contracts with the government.

However, figures obtained last year by the Labour party showed that about $291m (£230m) had been paid to P&O Ferries and its parent DP World by the UK government between March 2022 and July 2023.

The Insolvency Service, which can fine companies and disqualify directors, conducted a criminal investigation into the way P&O sacked its staff, as it appeared to have breached employment law by failing to consult on the redundancies.

However, it was concluded there was no realistic prospect of a conviction – the agency’s civil investigation is continuing.

A spokesperson for P&O Ferries said:We always pay at least the minimum wage required by national and international law.

“In addition to wages we provide all meals, modern accommodation, gym and sauna, and travel to and from their home country including flights for international workers coming on to our ships.

“We provide an industry-leading support package and work hard to ensure their welfare, wellbeing and mental health are properly cared for.

“The tough but necessary changes we made to the business mean that P&O Ferries and 2,200 jobs have been saved. In 2023 we transported goods worth hundreds of millions of pounds between the UK and Europe; and carried 3.5 million tourists across the Channel on our modern fleet.”

A Department for Transport spokesperson added: “We have worked at pace to bring forward our Seafarers’ Wages Act, consulting extensively with industry and unions to ensure we have ironclad legislation in place to help prevent this from happening again, while working to strengthen seafarer rights around the world.

“We expect to bring this into force in the summer, around the same time as French legislation, forming an international minimum wage corridor across the Dover strait.”