What will the pay rise for UK ferry crew mean for future crossings? Business News

Seafarers on several ferries sailing to and from the UK are set to receive pay rises with government changes aimed at requiring Irish Ferries, P&O Ferries and other operators to pay at least the national minimum wage.

This is the context and the likely effects.

What happened to make this happen?

In June 2021, Irish Ferries started sailing between Dover and Calais. This is the main route operated by P&O Ferries and also served by DFDS.

Irish Ferries’ business model uses cheap agency labor. Its tariffs for freight and passengers could therefore be lower than those of other operators.

The issue was raised with Transport Secretary Grant Shapps by P&O Ferries parent company DP World.

During a meeting in Dubai in November 2021, Chief Executive Officer Sultan Ahmed bin Sulayem discussed the “challenges” P&O Ferries faces with Mr Shapps, saying: “In terms of our ferry, there is a new low cost competitor from Irish Ferries.

“This poses challenges for P&O operations. We kept ferries running during the height of the pandemic to support the movement of people and goods. »

The transport secretary replied: “I am aware of the problems with P&O. I recognize that you will have to make trading decisions, but please keep us informed.

On March 16, P&O Ferries told the Department for Transport (DfT) that it was set to lay off 786 crew members, planning to replace them with cheaper labour. The company did not consult the unions.

P&O Ferries said it had taken action because otherwise the whole business would close, with 3,000 jobs lost and connectivity provided from England, Scotland and Northern Ireland.

The company said it lost £100m over the course of a year, or £3 per second.

What changed?

Transport Secretary Grant Shapps has said UK ports will have the legal power to refuse to operate ferries whose crew are paid below the national minimum wage – which on April 1, 2022 stands at 9, £50 per hour.

He ordered ports to deny entry to ferries that do not pay workers the national minimum wage from today.

By comparison, P&O Ferries said it would pay an average of £5.50 per hour.

Mr Shapps said HMRC will check that all UK ferry companies are paid at least the minimum wage. He also said the UK government would push for an international minimum wage. And he asked the UK Insolvency Service to disqualify Peter Hebblethwaite, the chief executive of P&O Ferries.

What will be the effect of the new rules?

Irish Ferries and P&O Ferries will be immediately banned from UK ports unless they raise wages.

Rising costs will likely mean less choice and higher prices.

Most workers will not be rehired, according to Peter Hebblethwaite of P&O Ferries.

More than 97% of the 786 terminated crew members have accepted the settlement offer, with 64% having already reached settlement agreements.

“These are legally binding agreements, and the crew members who entered into them rightly expect us to comply with their terms,” ​​the P&O Ferries boss said.

“As a result, we cannot propose a change to the March 31 deadline for our seafarer redundancy offer.”

What do the ferry companies say?

Most of them welcomed the news, including P&O Ferries. Writing to Mr Shapps before the proposals were finalised, the CEO of P&O ferries said: “We welcome the government’s commitment to raising the minimum wage for all seafarers working in UK waters.

“We have never sought to undermine minimum wage regulation. Indeed, from the outset, P&O Ferries has called for a level playing field when it comes to wages on UK ferry lines.

Ian Hampton, chief executive of Stena Line, said the company “welcomes the proposed package of changes to address the current inequalities that exist for seafarers working on scheduled ferry services to and from the UK “.

He said: “We have a long-standing strategy of employing local seafarers on board our ships. Today’s announcement protects this strategy and further creates the necessary consistency and equality across the industry.

A Brittany Ferries spokesperson said: “Since first sailing in 1973, we have been committed to the welfare and fair treatment of all seafarers and we never forget the role these hardworking professionals have played, especially throughout the Covid crisis.”

Will this help sailors on cruises serving UK ports?

It was the wait. On March 23, the Prime Minister told Parliament: “We will take action to protect all seafarers working in British waters and to ensure that they receive a living wage.”

While cruise passengers spend much of their time outside UK waters, many ships are based in UK ports. Boris Johnson has indicated that all seafarers must be paid at least the national minimum wage. But the new rules only apply to cruises on “scheduled ferry services”.

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This notice was published: 2022-03-30 15:56:05

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