The Case for the Reinstatement
of the Sacked Liverpool Dockers

The need for a Public Inquiry into the Mersey Docks and Harbour Company

Introduction

After years of financial mismanagement and abuse, the Mersey Docks andHarbour Board was rescured from financial collapse in 1970 by the government(the taxpayer) which took a controlling interest of 21 per cent and appointedthree senior directors to ensure that no more financial improprieties tookplace. Between 1971 and 1989, millions of pounds of taxpayers' money wasinvested in the 'reconstituted' Mersey Docks and Harbour Company (MDHC).The status of the MDHC is that of a semi-nationalised company.

A tale of financial abuse

• Abuse number one
  In 1987 shares in MDHC leapt from 31p to 280p. At their peak they hit 460p, an 800 per cent rise in the year. (The Times, 26 December 1987). A Department of Trade and Industry inquiry took place into an MDHC director regarding insider dealing. The deputy chairman of MDHC resigned during the course of the inquiry.
  
  
• Abuse number two
  With the abolition of the National Dock Labour Scheme (NDLS) in 1989 all UK ports were privatised and their dockers dismissed after receiving severance pay. The government gave the projected cost of financing this severance pay as £20 million. The actual cost was £151 million in 1989 alone. By 1992 the cost had risen to £200 million of taxpayers' money. Many of the dock employers illegally re-employed as casuals many of the 'surplus' dockers severed from the industry. MDHC made full use of this practice following the dismissal of 500 dockers from the port of Liverpool in 1995. The Public Accounts Committee in Parliament exposed this abuse of taxpayers' money in 1990, stating that the government's estimate, made to justify casualisation in UK ports, had been understated by a staggering 470 per cent. Needless to say, the dock employers got away with this privatisation swindle.
  
  
• Abuse number three
  In 1989 the government wrote off over £112 million of loans and repayable grants within weeks of its announcement of the abolition of the NDLS. But taxpayers' funding of MDHC did not dry up with the bogus privatisation.
  
  
• Abuse number four
  Merseyside is officially one of Europe's poorest regions. The European Union promised £630 million with over £300 million from the private sector. The £1.5 billion granted was the largest regional aid given by Europe, and was to help with unemployment, poverty, industrial decline and the problems caused by a shrinking population. Half-way through its timetable however, only £40 million has been utilised with £70 million spent on soft training programmes that bring little benefit. Only £40 million of the £370 million aimed at hard development has been spent.
  
  
• Abuse number five
  In a so-called 'major survey' commissioned by MDHC, 'The Employment Impact Of The Port Of Liverpool In The 1990s', Peter Stoney claimed that the port contributed between 49,000 and 105,000 jobs to the Merseyside economy - between 9 and 19.5 per cent of the region's employment - and between 125,000 and 311,000 jobs throughout the UK. In addition, the proposed 1992-98 capital expenditure programme would generate an additional 4,500 jobs during construction and 3,000 jobs thereafter. The development programme would also lead to the creation of between 9,000 and 23,000 more jobs on Merseyside and between 29,000 and 76,000 jobs nation-wide. Mr. Stoney believed, not surprisingly, that the decline in direct dock labour from 7,000 dockers in 1976 to just 600 in 1992 had been compensated for by growth elsewhere.
  
  Mr. Stoney's amazing figures, involving a margin of error of over 500 per cent (considering data provided by Stoney), would put most academics to shame. His claims for the employment-generating potential of MDHC are insane. They make good propaganda however when applying for millions of pounds of European and City Challenge money to fund a bogus private company like the MDHC.
  
  Mr. Trevor Furlong, Chief Executive of MDHC, together with others, lend weight to Mr. Stoney's extraordinary mind-bending claims when they say that this survey was the result of a study undertaken by the Macroeconomic Research Unit of Liverpool University. Characteristically however the image of academic impartiality thus conjured up is another deceit. Mr. Stoney's study, paid for by MDHC, was not undertaken by Liverpool University at all but by a private limited company, Liverpool Macroeconomic Research Limited, whose sole directors are Professor and Mrs. Patrick Minford - Professor Minford being Thatcher's former monetarist guru. MDHC thus knowingly misled a Public Inquiry into planning permission for the docks, as well as various government and Euro-funding agencies.
  
  
• Abuse number six
  In October 1992 more taxpayers' cash arrived through Sefton Borough Council's City Challenge bid amountintg to £37.5 million. MDHC's Marketing Director, Ken Wharton, who coincidentally is also a member of Bootle City Challenge, 'welcomed this great news... that would benefit the whole community'. In fact he and Mr. Furlong welcomed City Challenge money not for its benefit to the community but for its benefit to their own business interests. MDHC has received over £13.3 million in European grants.
  
  In the financial year 1994-95, MDHC gratefully welcomed City Challenge money not to create jobs but to pay for:
  
  • Closure of Regent Road £325,000
  • Development of Freeport £75 million
  • Expansion of Pandoro Irish Trade £390,000
  • Filling in Hornby Dock £250,000

European money was spent on:

• Langton River Entrance £5 million
• Seaforth Aggregate Conveyor £980,000

These fantastic amounts of public funding have clearly not created the jobs promised by Peter Stoney.

• Abuse number seven
  In 1993, MDHC acquired the Medway Ports for £103.7 million. They could have bought Medway 18 months earlier for less than £14 million. Before this purchase, Medway directors sacked over 300 long-serving dockers in 1992. Some Medway directors reclaimed the shares held by the dockers at £2.30p each. MDHC registrars KPMG Peat Marwick valued these shares at £38 each when MDHC bought the Medway Port. As a result Medway Ports director Peter Vincent made £12 million overnight on shares he reclaimed from the sacked dockers. In 1993 Vincent became a director of MDHC, but mysteriously resigned three months later. The government shareholding was reduced from 21 to 14 per cent when MDHC bought Medway, prompting the company's chairman, Mr. Waddell, to agree that 'it was odd that a company with a government shareholding should be buying a privatised port'. The sacking blueprint used at the Medway was also utilised by MDHC in Liverpool in 1995. Unfortunately no questions were asked about what Mr. Waddell called its 'odd' behaviour.
  
  
• Abuse number eight
  When MDHC sacked 500 Liverpool dockers in September 1995, the dockers attempted to return to work ten days later. They were locked out. By October 1995 MDHC directors busied themselves contracting dockers' jobs to casual/contract labour agencies. Low pay, long hours, no pension, sick pay or holiday pay mean dramatic savings in the cost of labour. Drake International was contracted to provide MDHC with casual/contract labour. MDHC claim to pay £20,000 per annum for a 38 hour week. The sacked dockers never earned such wages for a 38 hour week. But the choice of Drake is significant. A known strike-breaking casual agency, it is also an off-shore company registered in the Bahamas for tax avoidance purposes. Drake's job-creating potential for Merseyside is further hindered by the fact that 'Drake International does not trade... The consolidated accounts for the group's subsidiaries show that the company is insolvent, the result of repeated losses now totalling £8,343,704... Presumably the poor financial picture is a convenient fiction connected with the company's off-shore status' (PSPRU Company Report, 31 January 1997). Claims by MDHC of 50 per cent improvement by the new strike-breaking labour force reflect similar repeated praise for the sacked dockers prior to September 1995. But the introduction of compulsory drug and alcohol abuse checks on Monday, 24 February 1997 for Drake's casual employees shows the reality of the confidence MDHC has in its replacement labour force.
  
  
• Abuse number nine
  The financial status of MDHC makes fascinating reading, especially when linked to the declaration of profits since the early 1980s. Prior to this period MDHC declared losses to avoid repayment clauses on government loans - the last loss was £9.5 million in 1982. Since that date profits have risen as follows (in £ million):

1986 3.1
1987 5.0
1988 7.2
1989 8.3
1990 10.8
1991 13.2
1992 15.2
1993 20.9
1994 33.6
1995 31.7
1996 29.6

Indeed between 1986 and 1995 profits rose by 1,000 per cent. However, steady rises in profits of around £2 million a year were grudgingly seeped out from 1986 to 1992.

In 1993 profits rose from £15.2 million to £20.9 million. The year 1994 showed the biggest leap in profits - by over £13 million to £33.6 million - during a period in which the sacked dockers contributed substantially to the profitability and efficiency of MDHC. Following the dismissal of 500 dockers, profits fell by over £2 million. Half-yearly profits to August 1996 were £13.9 million, against EuroLink's losses of £4.5 million, expected to rise to £7.5 million. Coastal Containers' profits fell by over 18 per cent. £1 million was wasted on severance pay for 41 MDHC employees as part of a proposal that was rejected by the sacked dockers. MDHC admitted that their dismissal of the Liverpool dockers was costing over £1 a year. The company has set aside over £10 million to pay off the sacked dockers. The fall in share values since 1995 has cost in excess of £70 million. The cost of policing the long-running dispute is to date almost £2 million. Communications Director Mr. Leatherbarrow amazingly claimed in November 1996 that MDHC was not responsible for policing the dispute; it was a matter for the ratepayers of Merseyside because the police "just happened to be at the docks" (Daily Post, November 1996).

• Abuse number ten
  As share prices fell, in 1996 MDHC directors cashed in their own share options. They purchased 12,500 shares when prices dropped to 437p. Between 1993 and 1995, MDHC Chief Executive, Trevor Furlong's wages almost doubled to £316,000.

In conclusion, the sacked Liverpool dockers know, despite the anouncements by MDHC that, as a direct result of the international boycott against the port of Liverpool, the port is in a state of financial and trading stagnation. This decline in the fortunes of our once great port will only end when the sacked Liverpool dockers are reinstated. A call for a further Public Inquiry into the financial status of Mersey Docks is currently being undertaken in Parliament.

A Conspiracy to Dismiss

1. In September 1995, 500 Liverpool dockers were dismissed by the Port Authority, MDHC.
   
2. Effectively, the dismissal of some 390 direct employees of MDHC, along with other dockers employed by subsidiaries of MDHC such as Nelson Stevedoring Company, was for being in breach of contract through their refusal to attend work.
   
3. The original problem arose when young dockers, many of them the sons of MDHC dockworkers, experienced a breach of contractual arrangements regarding overtime work on a working vessel. These 80 dockers were employed by a company called Torside Ltd.
   
4. In 1991, the Transport and General Workers' Union (TGWU), MDHC and two former dockers who took government severance pay in 1989 set up Torside Ltd. to recruit young dockers into the industry.
   
5. MDHC claims that Torside Ltd. is a wholly independent stevedoring company. Yet the 80 young dockers were all interviewed by senior MDHC management in that company's head office.
   
6. Indeed, it was two MDHC managers who informed the Torside dockers of the unilateral changes to their contract of employment. When these young dockers sought advice from their shop stewards, a number of them were dismissed immediately, without warning and without the right of appeal.
   
7. It is important to note that the Torside dockers were regularly employed by MDHC on a number of their working berths, including the Timber Berth.
   
8. Recognising not only these working relationships but also family relationships with many of the young Torside dockers, support from the majority labour force employed by MDHC was inevitable.
   
9. Numerous attempts were made to defuse this most dangerous situation. MDHC was not known for its caring approach to employees. By Thursday, 28 September 1995, it was clear that the dismissal of the Torside dockers was made effective.
   
10. For defending a basic trade union principle, refusing to cross a picket line, dockers employed by MDHC and their subsidiaries, together were other port workers, were deemed to be in breach of contract and they were sacked.
    
11. Within a week, dockers many of whm had 30 to 40 years' employment in the industry, some second- and third-generation dockers, received their P45s.
    
12. A few days later, on 6 October 1995, the sacked Liverpool dockers voted to return to work. They were locked out.

The Subsequent Debate

1. Much has been written about the illegal and unofficial nature of the Liverpool dockers' situation.
   
2. Following the de-regulation/privatisation of all UK ports in 1989 with the abolition of the National Dock Labour Scheme (NDLS), MDHC was effectively one of the few port authorities which maintained union recognition and guarantees of no casualisation.
   
3. Despite promises by Employment Secretary Norman Fowler of no return to casual labour in UK ports following abolition, an overwhelming majority of ports welcomed the introduction of casual labour and made full use of it. For evidence of the conspiracy against Britain's dockers and their union see the speech delivered to Australian port employers in 1990 by Nicholas Finney, former director of the Association of Port Employers.
   
4. Since 1989, MDHC has developed its own internal market in the port of Liverpool, effectively privatising a number of its own operations, whilst maintaining overall control.
   
5. This process led to Liverpool dockers losing jobs in numerous areas, resulting in redundancies affecting almost 300 dockers' jobs.
   
6. Arising from this consistent undermining of terms and conditions of employment between 1989 and 1995, the Liverpool dockers sought official sanction from the TGWU to hold a legal ballot on these matters.
   
7. It is important to note that, in August 1995, Torside management threatened to cease trading if they could not reduce the labour force from 80 down to 60 whilst introducing casual labour. The Liverpool dockers employed at Torside were successful in obtaining a legal ballot in opposition to casualisation/redundancies. By late August 1995, Torside management reluctantly withdrew their demands. Within weeks, Torside dockers were all dismissed, leading to the ultimate dismissal of the 500 Liverpool dockers.
   
8. As a result of the internal privatisation of the port by MDHC, numerous satellite companies were established - all controlled by the Port Authority, MDHC. Under current industrial legislation, it was legally impossible for dockers employed by MDHC, Nelson Stevedoring and Coastal Containers, for example, to have a joint ballot as the dockers were deemed to be employed by individual/separate companies, although they were all directly-owned subsidiaries of one company, namely MDHC.
   
9. It was this unjust legal dilemma that confronted the Liverpool dockers who would have welcomed the opportunity to take part in a secret legal industrial ballot.
   
10. Such a situation has resulted in the curtailing of active support of the dockers' own union, the TGWU, as well as in other areas of traditional response to trade union disputes.
    
11. However, the Liverpool dockers have consistently stated that they are not on unofficial/illegal strike; they have been dismissed for breach of contract.
    
12. Section 21 of the 1992 (Consolidation Act) is very clear. Quite simply, the union has to repudiate its members' actions as soon as reasonably practicable. Where such action is repudiated, written notice must be given to the committee in question without delay. Individual notices of repudiation, duly dated, must also be enacted. Every member of the union taking part in unofficial action must be given personal letters of repudiation. Similarly a further letter of repudiation must be given to the employer.
    
13. Between September 1995 and July 1997 the TGWU has issued no letters of repudiation to the Mersey Port Shop Stewards' Committee, to the dockers themselves or to MDHC. On the basis of Queen's Counsel advice therefore: 'There having been no repudiation in the prescribed form, it follows that the industrial action (or rather the acts of organising, encouraging or supporting the industrial action of the dockers) is deemed by statute to have been official.'
    
14. On the other hand State agencies treat the dispute as neither official nor unofficial. Industrial law is quite clear: trade dispute, official or unofficial - no benefit. But after initially refusing benefit to the dockers when the dispute began in September 1995, by 2 December of that year all Liverpool dockers and their families were given the right to claim benefit. It was the Employment Service (an executive agency of the Employment Department) through the Conservative government's adjudication officer, who in fact overrulled the earlier Employment Service decision to disqualify dockers from benefit 'due to a trade dispute'. Thereby all disqualifications were lifted from 4 December 1995.
    
15. For the last 21 months, the Liverpool dockers have campaigned vigorously and unambiguously for their reinstatement and MDHC has made various offers of partial reinstatement and severance payments. In February 1996, a postal ballot organised by the Electoral Reform Society recorded an 84% rejection of a financial settlement as opposed to reinstatement.
    
16. It has often been said that the Liverpool dockers have been inflexible in their approach to seeking a negotiated settlement. The dockers deny this and claim that reinstatement of all the sacked dockers is the basis on which negotiations through the normal channels can take place on disputed issues or early retirement arrangements.
    
17. MDHC have claimed for some time that they no longer have any interest in employing dock labour direct, preferring to contract labour needs to casual/contract agencies.
    
18. In an effort to overcome the deadlock, Liverpool dockers forwarded proposals to form their own labour-supply company, providing labour for the whole of the port of Liverpool on a non-profit-making basis, aimed at creating employment opportunities for the people of Merseyside: real jobs, real conditions, real union-recognition rights. This initiative was later adopted by the TGWU.

In Conclusion

1. The Liverpool dockers have enjoyed magnificent and meaningful support from Labour MPs both locally and nationally. They now believe that the new Labour government should make it a priority to achieve justice for sacked workers.
   
2. Above all, direct political links exist between MDHC and the new government. Even after the reduction to 14 per cent of the government's shareholding as a result of the controversial purchase of the Medway Ports, the government's interest still represents a 'golden' share, giving special powers.
   
3. The Liverpool dockers have consistently sought a Public Inquiry into the funding and actions of MDHC. They maintain that such a mechanism would uncover serious malpractices that have directly undermined the economic and employment regeneration of Merseyside.
   
4. At the heart of the problem rest the historic abuses of casual employment, recognised at the turn of the century as being indefensible. Liverpool dockers believe their reinstatement will signal a regeneration, not only for the prosperity of Merseyside, but also for fundamental human rights in the workplace, turning the clock forward for employment rights in all UK ports.
   
5. The Liverpool dockers remain committed to this justice - a justice that any democratic union or government should embrace. In this context, and in recognition of the abuses of public funding undertaken by MDHC, the Labour government could oversee a settlement to the docks dispute through reinstatement.
   
6. The mechanism of this reinstatement may be found in the Liverpool dockers' proposals for a labour supply company. This has been submitted for consideration.
   
7. Beyond doubt, the dockers' situation was brought about by MDHC making full use of unjust laws that allow employers to dismiss workers without any rights of redress. These same laws are now embraced by the newly elected Labour government. They should be repealed.