Law will be changed to ‘undo’ P&O’s mass sacking of its workers, government vows

The law will be changed to “undo” P&O’s mass sacking of its workers, the government is vowing – just hours after a minister warned that would harm the economy.

Grant Shapps, the transport secretary, said the under-fire ferry firm had “exploited a loophole” that would now be closed off by legislation and applied retrospectively.

“Next week, we’ll be returning to parliament with a package of measures to make sure that situation is undone,” he pledged.

The announcement comes after a government official admitted it had “no powers” to take P&O Ferries to court – despite the firm admitting it broke the law by sacking 800 workers without consulting them.

The business minister, Paul Scully, urged MPs to recognise the “wider” benefits of the “flexible labour market” that allowed the sackings to take place without punishment.

But, just two hours later, Mr Shapps switched tack, promising: “We’ll have a package of measures that we’re going to bring forward, which will absolutely close it off.”

The stakes have been raised by Boris Johnson insisting the controversy will go to court and telling MPs: “P&O clearly aren’t going to get away with it.”

At an emergency session of the business and transport committees, P&O’s chief executive Peter Hebblethwaite had vowed that the company would do exactly that.

He admitted it “chose to break the law”, arguing a consultation with trade unions would have been pointless because they would never have agreed to sacking 800 workers.

“I completely throw our hands up, my hands up, that we did choose not to consult. We did not believe there was any other way to do this, to compensate people in full,” he said.

Mr Hebblethwaite also admitted most of the newly recruited seafarers were being paid just £5.15 per hour – way below the UK’s national minimum wage.

He told MPs his own a basic salary was £325,000.

He faced robust questioning at the session, which began with Labour MP Darren Jones asking: “Are you in this mess because you don’t know what you’re doing, or are you just a shameless criminal?”

“The context of this very difficult decision is that P&O has lost an unsustainable amount of money,” Mr Hebblethwaite replied. “The reality is, we would’ve had to close the business. We concluded that every single option available to us would result in the closure of P&O.”

Mr Scully said the Insolvency Service is looking into whether other notification laws were broken by P&O – but it told the inquiry that work would not be completed until 8 April.

Furthermore, a leading maritime lawyer has argued the firm could legally sack 800 staff without informing the government, because of a law change brought in by Chris Grayling.

Mr Shapps insisted the sackings can be reversed, saying: “We will change the law to make that happen.”

He said: “We think that the P&O management have exploited a loophole here, in order to sack British workers and bring in some very low paid international workers – we don’t think that’s right.”