The UK Insolvency Service has decided not to open criminal proceedings against P&O Ferries over the dismissal of almost 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 warning or consultation. Many employees found out they were fired via a video message.
The ferry operator replaced the fired crew members with employees on more flexible contracts. Replacement staff are paid an average of £5.50 an hour, well below the UK minimum wage, but legal because the crew work offshore.
Business Secretary Kwasi Kwarteng had commissioned the Insolvency Authority to investigate whether the company had committed criminal offenses in the case.
“Following a full and robust 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 Insolvency Service said its investigation had been reviewed by an independent prosecuting attorney in accordance with normal practice in such cases. It is still conducting its own civil investigation.
P&O Ferries has been contacted for comment.
The decision not to pursue legal action is likely to add fuel to a debate sparked by the dismissals about the robustness of Britain’s employment and corporate governance rules.
P&O chief executive Peter Hebblethwaite appeared to admit wrongdoing during a parliamentary hearing in March.
Asked if he had “intentionally” broken the law by paying staff instead of launching a formal consultation as required by law, he said: “I hold my hands up completely . . . we chose not to consult.”
“There is absolutely no doubt that we were required to consult with the unions. We chose not to do that. . . and will fully compensate everyone for it, he said at the time, adding that he would make the same decision again because otherwise the company would not be viable.
Failure to notify the Insolvency Service in advance of initiating a collective layoff process is punishable 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.
The insolvency service’s announcement came a day after DP World, the Dubai-based group that owns P&O, reported a record profit of $721m for the first half of 2022. Frances O’Grady, head of the TUC trade union, called the profit “an affront to common decency”.
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 £200m in 2020 and 2021.
Additional reporting by Philip Georgiadis