Britain's P&O Ferries made 800 staff redundant with immediate effect and suspended crossings for the next few days, sparking a backlash from politicians and unions over reports it would hire cheaper agency workers instead.
The shock move caused delays around Britain's busiest port, Dover, and drew threats of a standoff as trade unions urged their members to defy any instructions to leave P&O ships.
Owned by Dubai ports firm DP World, P&O is recovering from two years of disruption when COVID-19 prevented tourists from travelling on its routes between Britain, France, Ireland and elsewhere in northern Europe.
P&O, which has almost 4,000 employees and operates more than 30,000 sailings a year, said it had lost 100 million pounds ($131 million) year-on-year and the business was no longer viable in its current form.
"This is not sustainable," a spokesperson for P&O said. "Our survival is dependent on making swift and significant changes now. Without these changes there is no future for P&O Ferries."
It told passengers alternative carriers would be available.
Transport union RMT said it had advised its members who worked for P&O not to leave their vessels, responding to media reports that the sacked staff would be replaced by agency workers. The company declined to comment on those reports.
The job losses come at a politically sensitive time for the government, with inflation set to reach 8% in April and consumers facing tax rises and soaring energy bills in what opposition politicians have billed a 'cost of living crisis'.
"I am very concerned about the news from P&O Ferries this morning and we will be speaking to the company today to understand the impact on workers and passengers," transport minister Grant Shapps said.
British unions and opposition politicians have accused some companies of using a "fire and rehire" tool which allows them to move staff on to weaker contracts with lower pay, as they seek to rebuild after the pandemic.
"Unscrupulous employers cannot be given free rein to sack their workforce in secure jobs and replace with agency staff," the opposition Labor Party said in a statement.
In March last year DP World reported an 11% jump in 2020 revenue and said it would continue to invest in the segment even as it acknowledged that P&O Ferries and Ferrymasters had been through a "particularly challenging time" due to COVID-19.
($1 = 0.7630 pounds)
(Reuters - Reporting by William James and Muvija M; Editing by Kate Holton, Jan Harvey and Emelia Sithole-Matarise)
