British legislative plans against P&O could impact Irish Ferries

British government plans to prevent ferry companies operating out of UK ports paying below the country's minimum wage could have implications for Irish Ferries, which is owned by listed company Irish Continental Group.

UK transport secretary Grant Shapps said on Monday he was giving the boss of P&O Ferries "one final opportunity" to re-employ sacked staff on their previous salaries.

In a letter to the ferry company's chief executive Peter Hebblethwaite, Mr Shapps called on the operator to offer all 800 crew their jobs back and pledged to bring a "comprehensive package of measures to parliament to ensure that seafarers are protected against these type of actions".

Last week Mr Shapps promised to stop a race to the bottom on declining rates of pay on UK ferry routes, naming Irish Ferries as another operator that “already went down this route”.

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He said that he wanted to protect other operators such as Stena and DFDS which were not using “this cheap-labour, below-the-minimum-wage model”.

UK legislative changes, as promised by Mr Shapps, could force low-cost ferry operators such as Irish Ferries to increase their wages if they are going to continue using UK ports.

The British transport secretary is expected to outline his plans to change the law on Wednesday or Thursday. Irish Ferries had no comment to make on the potential impact of the proposals.

In 2005, Irish Ferries replaced 543 crew members with eastern European workers paying them less than half the Irish minimum wage in a move that sparked a battle with the unions.

‘Low-cost operator’

P&O warned the UK government last November that a new “low-cost operator” on its Dover-Calais route was posing a serious competitive challenge to the business – a thinly-veiled reference to Irish Ferries, which began a service on the English Channel route last June.

The cheaper labour model operated by Irish Ferries allows it to take a competitive advantage over P&O on the route.

It can also offer lower prices to Irish car travellers and freight operators shipping goods to and from Europe by offering ferry services on both Irish Sea and English Channel routes.

Department of Transport officials are said to be watching developments in London closely.

P&O drew condemnation from politicians and trade unions on March 17th when it said would replace staff immediately with agency workers paid less than the minimum wage. The company later admitted that the decision to sack 800 works without consulting unions first had broken the law.

The UK’s minimum wage is set at £8.91 per hour for workers aged over 23, while the average rate paid to agency staff used by P&O would be £5.50, in line with international maritime pay, which the company can pay because it operates in international waters.

P&O operates two routes to Ireland, between Dublin and Liverpool, and between Larne and Cairnryan in Scotland. It lost £100 million (€120 million) last year, which was covered by its parent, Dubai-based logistics company DP World.