P&O’s boss Peter Hebblethwaite has shown his employer unflinching loyalty. It can no longer afford to show him the same.
Hebblethwaite last week admitted to breaking the law by sacking 800 workers without notice. He told MPs he would do it all again for the sake of the company. “I completely hold my hands up”, he said. “The business was not viable . . . I would make this decision again I am afraid.”
Employment law changes planned by the government may mean the company reinstates workers made redundant less than two weeks ago. P&O on Monday said it would pay the minimum wage if other operators did too. But even if P&O accepts the error of its ways, Hebblethwaite must still be held accountable. Even if the action was taken at the direction of owner DP World, he has nailed his colours to the mast.
The chief executive’s complaints about the viability of the business may be true. It is hard to assess the financial prospects of a company when the two most recent years of trading have been so atypical. However deep the pockets of its parent company DP World, P&O Ferries’ Dubai owners are not obliged to support it indefinitely.
It seems plausible that P&O needed to restructure to cope with debts accumulated during the pandemic. Increasing competition from Irish Ferries, which also operates a low-wage model, on the Dover to Calais route doubtless held back a recovery in margins.
Proposals from transport secretary Grant Shapps to introduce legislation that would stop ferry companies paying less than the minimum wage could help reverse a race to the bottom between the maritime operators. That may alleviate some of the competitive pressure on P&O that encouraged it to take such ill-advised action in the first place, and allow it to reverse some of the job cuts.
It does not excuse the company’s actions in the first place.
Hebblethwaite argues they were necessary to preserve the company as a whole and the jobs of those who remained. But his actions have imperilled the company anyway.
Redundancy is a distressing event for employees. It “requires sensitive handling by the employer to ensure fair treatment of redundant employees as well as the morale of the remaining workforce”, according to the Chartered Institute of Personnel and Development. That sensitivity was singularly absent from P&O’s handling of the job cuts.
The reputational taint should be severe. That does not mean it cannot be cleansed.
P&O does not have a blemish-free history. In 1987, it took over European Ferries, which owned an operator called Townsend Thoresen. Two months later, Townsend Thoresen’s Herald of Free Enterprise left the Belgian port of Zeebrugge with its doors open. The disaster cost 193 lives, while an official investigation castigated Townsend for a “disease of sloppiness” found to have infected the new subsidiary from top to bottom.
A year later, P&O was facing down a strike over job cuts and safety implications. The situation is strikingly familiar: P&O wanted to make hundreds of staff redundant and introduce more intensive shift patterns for crew. It withdrew from labour agreements and tried to get around the resulting strike. Passengers and crew had to cross picket lines.
The leader pages in this newspaper found it “hard to believe there are not better tactics in the face of industrial change than those adopted” by P&O European Ferries and the union. Then, pressure to cut costs came from the forthcoming Channel Tunnel. The advent of cheap flights in more recent decades only compounded the squeeze. Changes to trade patterns post-Brexit will create new challenges for freight.
Nonetheless, P&O endured. It is a very different corporate entity from the one that extended from shipping to shopping centres in the latter decades of the 20th century. The cruise division was already gone and its transition to a future focused on ports apparent by the time it was first sold to DP World in 2005.
The ferry business may be able to endure still. But it is hard to see how its reputation can be revived while Hebblethwaite remains at the helm.