The UK Insolvency Service decided not to bring criminal proceedings against P&O Ferries for the 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 laid off hundreds of sailors without notice or consultation. Many staff members found out they were being fired through a video message.
The ferry operator replaced laid-off crew members with staff on more flexible contracts. Replacement crew are paid an average of £5.50 an hour, well below the UK minimum wage, but legal because the crew work offshore.
The 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 who were made redundant by P&O Ferries, we have concluded that we will not initiate criminal proceedings,” the Insolvency Service said on Friday afternoon.
The Bankruptcy Service said its investigation had been reviewed by independent prosecution counsel in accordance with normal practice in such cases. It is still conducting a separate civilian investigation.
P&O Ferries declined to comment.
The decision not to take legal action is likely to add fuel to a debate sparked by the redundancies over the strength of UK employment and corporate governance standards.
P&O chief executive Peter Hebblethwaite appeared to admit wrongdoing at a parliamentary hearing in March.
Asked if he had “intentionally” broken the law by paying staff instead of launching a formal consultation, he said: “I completely throw my hands up.” . . We decided not to consult.
“There is absolutely no question that we were required to consult with the unions. We choose not to do that. . . and will fully compensate everyone for that,” he said at the time, adding that he would make the same decision again because otherwise the company would not have been viable.
The lack of prior notification to the Bankruptcy Administration of the opening of a collective dismissal process is a crime 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, general secretary of the TUC, said the Insolvency Service had to give a clear explanation for the decision.
“It was a shocking case of mistreatment of workers. And it would be shocking if there is no justice for P&O workers through dire consequences for firm directors under current laws,” he said.
The Insolvency Service’s announcement came a day after DP World, the Dubai-based group that owns P&O, reported record profits of $721 million for the first half of 2022.
DP World did not publish figures showing P&O’s financial performance. Accounts filed in the UK showed that P&O Ferries lost a combined £200m in 2020 and 2021.
Additional reporting by Philip Georgiadis