P&O Ferries has brought a brutal end to a lengthy truce between labour and capital in the UK. On Thursday, the company sacked 800 sailors without warning. The RMT union said P&O had bussed in lower-paid contract staff to replace them. The company, ultimately controlled by the Emirate of Dubai, said in a statement that it would have “no future” without the job cuts.
Tactics as aggressive as these have rarely been seen in a UK labour confrontation since the Wapping print workers strike of 1986. They make P&O Ferries an outlier among UK employers. But industrial disputes are set to increase in frequency and intensity as a result of spiralling inflation.
CPI inflation hit 5.5 per cent in the 12 months to January. The median pay settlement in the three months to January was up 3 per cent, according to data company XpertHR.
P&O said it had made “a £100mn loss year on year”, implying consecutive hits in 2021 and 2020, the last year disclosed in Companies House filings. That would reflect tough trading during intermittent lockdowns and travel bans — but not the current buoyant outlook for short-hop leisure travel.
P&O’s maritime staff earned an average of £35,000 each on a yearly basis in 2020, according to Lex calculations, for staff ranging from ferry captains to deckhands. That compared with UK median annual full-time earnings of £31,500. Staff overheads increased 200 basis points to 17 per cent of revenues that lossmaking year.
Fuel costs are likely to be a far bigger burden on P&O Ferries than its unionised workforce.
A typical ferry burns three tonnes of fuel an hour. The cost of that has risen from $700 two years ago to $2,400 today. DP World, the group’s immediate owner, is heavily leveraged following a 2020 buyout of minorities.
By happenstance, UK prime minister Boris Johnson this week visited the United Arab Emirates, of which Dubai is a member, to lobby for increases in oil and gas production. The actions of P&O Ferries are out of kilter with his government’s insistence that employers should be prepared to pay UK workers higher wages as a “Brexit dividend”.
Few UK managers are old enough to have any experience of pay bargaining during a period of sustained wage inflation. If they are wondering how to do it, P&O Ferries provides them with a clear example: not like this.
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Source: Economy - ft.com
