P&O owner told: Plug £150m pensions gap
Dubai firm urged to ‘do the right thing’ – as backlash grows over Zoom sacking of 800 ferry staff
DP WORLD, the Dubai State owner of P&O Ferries, has been urged to do the ‘right thing’ and plug a massive £150 million gap in its workers’ pension scheme.
Pressure to cover the shortfall follows the ‘shameful’ sacking of 800 crew members via a prerecorded message on Zoom.
The company told staff it was their final day of employment and said it was forced to swing the axe as a last resort because it has been losing money due to fewer passengers using its services during the pandemic.
Critics of the firm’s approach – now widely regarded as a public relations disaster of staggering proportions – said the rich Arab country which controls the business should now pull out the stops to help the workers. Many have been loyal employees of P&O for decades.
DP World benefited from Government subsidies after coronavirus hit and has been handed lucrative access to the Government’s freeports scheme. It has paid its owners £1.5billion since 2015.
A source familiar with the pension situation said: ‘DP World has been supported by its workers, taxpayers and the Government. A company as rich as DP World – supported by the sovereign wealth fund of Dubai’s royal family – ought to do the right thing and satisfy the shortfall in the fund.
‘DP World has just made 800 people redundant under the most cruel of methods. It’s time for it to make amends.’
The giant deficit is owed by the ferry company to the Merchant Navy Ratings Pension Fund – a £1.3 billion scheme for 24,000 workers in the maritime industry.
P&O is by far the fund’s largest single employer and owes the scheme £146million. Sources said its $200 million (£152 million) sponsorship of the European golf tour – renamed the DP World Tour – could be regarded as a slap in the face to members of the scheme.
Failure to pay the money it owes to the fund will mean that other contributors to the scheme, which has 100 members in total, will be obliged to stump up the missing cash.
Many of these are direct rivals of P&O, while others are Government bodies including the Royal Fleet Auxiliary. Members also include small firms. Ten per cent of the fund is due to be paid out to Government employees.
Former Pensions Minister Baroness Ros Altmann said there could be a moral case for DP World to pay up. She said: ‘It is shameful, absolutely shameful. Other employers are facing a competitor which has basically pushed extra costs on to them at the worst possible time.
‘What puzzles me is why there seems not to be an expectation that DP World must step in.’ The sacked workers are set to be replaced with cheap agency staff.
DP World is chaired by Dubai’s Sultan Ahmed bin Sulayem who was in charge when the logistics giant bought P&O for £322million. Company filings show he has received £20million in pay from DP World since 2016.
Despite the losses at P&O, which its owners say hit £100 million last year, its parent DP World has paid out $2.1billion in dividends since 2015. That included $275million last year.
The sackings led to the departure of a director on Friday. Mark Russell quit DP World, voicing disapproval of the brutal restructuring.
Russell’s spokesman said: ‘Although he understands the need to address P&O Ferries Holdings’ financial challenges, he cannot support the way the company has carried out this restructuring and so has no option but to resign with immediate effect.’
P&O sources said it is ‘fully committed to meeting its share of the liabilities’.
It has paid £80million since 2016 and its outstanding deficits are secured by a guarantee over two P&O ships, sources said.
P&O Cruises is owned by a different company and is not affected by the disruption.
The pension fund’s chair of the trustees, John Oldland, confirmed that they are working with The Pensions Regulator. He said: ‘The trustees’ overriding aim is security of members’ benefits. I consider that all benefits remain secure.’
A spokesman for The Pensions Regulator said: ‘We are working closely with the pension fund.’