P&O owners urged to close £150m pension gap

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P&O owners urged to close £150million pension gap: Dubai firm urged to ‘do the right thing’ – as backlash mounts over Zoom’s layoff of 800 ferry workers

  • Many of those who have been laid off have been loyal P&O employees for decades
  • DP World benefited from government subsidies after the coronavirus outbreak
  • The company also provided lucrative access to the government’s free port program
  • It has paid its owners £1.5 billion since 2015

DP World, the owner of P&O Ferries in Dubai State, has been urged to do the “right thing” and fill a massive £150m gap in its pension scheme.

The push to cover the deficit follows the “shameful” dismissal of 800 crew members via a pre-recorded message on Zoom.

The company told employees it was their last day of work and said it was forced to swing the ax as a last resort as it lost money because fewer passengers used its services during the pandemic.

Stormy waters: DP World benefited from government subsidies in the wake of the coronavirus outbreak and gained lucrative access to the government’s free port program

Critics of the company’s approach – now widely viewed as a public relations disaster of astounding proportions – said the wealthy Arab country that controls the company should now pull out all the stops to help the workers. Many have been loyal P&O employees for decades.

DP World benefited from government subsidies in the wake of the coronavirus outbreak and gained lucrative access to the government’s free port program. It has paid its owners £1.5 billion since 2015.

A source familiar with the pension situation said: “DP World has had the support of its workers, taxpayers and the government. A company as rich as DP World – backed by the Dubai royal family’s sovereign wealth fund – should be doing the right thing and filling the gap in the fund.

“DP World just fired 800 people using the most cruel methods. It’s time to make amends.’

The ferry company owes the huge deficit to the Merchant Navy Ratings Pension Fund – a £1.3 billion scheme for 24,000 workers in the shipping industry.

P&O is by far the fund’s largest single employer and owes the scheme £146m. Sources said the US$200million (£152million) sponsorship of the European Golf Tour – renamed the DP World Tour – could be seen as a slap in the face for members of the scheme.

Failure to pay the money it owes the fund means other contributors to the scheme, which totals 100 members, are obliged to top up the missing money.

Many of these are direct competitors of P&O while others are government agencies including the Royal Fleet Auxiliary. Small businesses are also members. Ten percent of the fund is to be paid out to government employees.

Former Pensions Minister Baroness Ros Altmann said there may be a moral reason for DP World to pay. She said: “It’s shameful, absolutely shameful. Other employers face a competitor who has basically imposed additional costs on them at the worst possible time.

“What puzzles me is why it is apparently not expected that DP World will have to intervene.” The laid-off workers are to be replaced by cheap temporary workers.

DP World is run by Dubai’s Sultan Ahmed bin Sulayem, who was in charge when the logistics giant bought P&O for £322m. Company records show he has received £20million in salary from DP World since 2016.

Despite losses at P&O, which owners say hit £100m last year, parent company DP World has paid out $2.1bn in dividends since 2015. That was $275 million last year.

The layoffs led to the departure of a director on Friday. Mark Russell left DP World, disapproving of the brutal restructuring.

Russell’s spokesman said: “While he understands the need to address P&O Ferries Holdings’ financial challenges, he cannot support the manner in which the company has undertaken this restructuring and therefore has no choice but to resign with immediate effect. “

P&O sources said it is “fully committed to meeting its share of the liabilities.”

It has paid £80m since 2016 and its outstanding deficits are backed by a guarantee on two P&O vessels, sources said. P&O Cruises is owned by another company and is not affected by the disruption. The chairman of the trustees of the pension fund, John Oldland, confirmed the cooperation

The Pensions Inspectorate. He said: “The Trustees’ primary objective is to secure the members’ benefits. I am of the opinion that all services remain secured.’

A spokesman for The Pensions Regulator said: “We are working closely with the pension fund.”

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