P&O Ferries set to 'pay out £36.5m in severance'

P&O Ferries is defending how it handled terminating 800 staff, sharing details of a £36.5m redundancy pot.

It sacked seafarers without warning in a video message last Thursday and unions claim some will be replaced by Indian seafarers on £1.81 an hour.

Ministers on Tuesday got a response from the ferry operator explaining its conduct, after they wrote to the firm threatening it with "unlimited fines".

P&O Ferries said it risked collapsing into administration without the cuts.

Details of the firm's response to ministers' questions regarding P&O's processes for the shock redundancy action are not yet known.

The company said its settlement with its workers is believed to be "the largest compensation package in the British Marine Sector," and more than 40 staff would get severance packages of more than £100,000 each.

P&O Ferries said some employees are set to get 91 weeks' pay and the chance of new employment and no employee will receive less than £15,000.

The transport and freight company said 575 seafarers affected are in discussions to progress with the severance offers.

However, the RMT union, which has been organising protests over the redundancies said the structure of the severance deal "is pure blackmail and threats".

"If staff do not sign up and give away their jobs and their legal right to take the company to an employment tribunal they will receive a fraction of the amount put to them," Geoff Martin from the RMT said.

Mr Kwarteng's letter to P&O boss Peter Hebblethwaite says the company "appears to have failed" to follow the correct process for making large-scale redundancies, which would include consulting with unions and staff representatives and notifying him through the Insolvency Service and the Redundancy Payment Service.

The letter says failure to notify is "a criminal offence and can lead to an unlimited fine".

Mr Kwarteng's questions to P&O Ferries include asking for details on the exact number of redundancies and how many of these involved any consultation, as well as the location of work for each staff member dismissed.

Additionally, he asked if staff made redundant were offered alternative roles directly for P&O Ferries or similar roles on new terms and conditions through an agency.

Separately, Business Minister Paul Scully said the government was reviewing all of its contracts with P&O ferries and its owner DP World, including a £25 million subsidy to DP World to help develop London Gateway as a freeport.