P&O Cruises has been drawn into a row over low pay levels for crew after bringing in a new salary scheme.
Staff who are paid a basic salary of as little as 75p an hour face having extra tips from passengers withheld unless they hit performance targets, The Guardian reported at the weekend.
A junior waiter at the bottom end of the scale now earns a basic salary of £250 a month for shifts lasting a minimum of 11 hours, seven days a week, with a possible £150 extra in bonuses.
According to documents seen by The Guardian, this is "a significantly increased basic salary".
David Dingle, chief executive of P&O Cruises parent company Carnival UK, said the crew were "much happier" and the new arrangement was a win-win for passengers, staff and P&O.
He said many crew took home over £1,000 a month, but tougher times meant that "sadly, our customers were reluctant to pay the recommended level of tipping".
Cash gratuities are being phased out in favour of tips automatically added to passengers' bills, which pay for the potential performance bonus. As passengers could opt out of paying, the company was "taking the risk out" by paying bonuses if targets were met, Dingle reportedly said.
"We've handled it fairly and decently and made sure their pay is being protected," he said.
Bonuses will be held back in part if customers' feedback ratings do not exceed targets, some of which stand at 96%. Cabin stewards whose attitude was ranked below 92% by passengers will forfeit an entire bonus payment worth approximately 15% of their basic salary.
Crew have been told that P&O's funding of the scheme "is dependent on the passengers paying their auto gratuities".
Passengers on Oriana that recently returned to Southampton said members of the mainly Indian crew – the restaurant staff and cabin stewards – seemed upset by the deal, the newspaper claimed.
Dingle reportedly said: "You've got staff from eastern Europe in restaurants in Britain – why? Because it's great money. Yes, the minimum wage is more than we pay, but this is a global industry, our businesses have to remain competitive.
"Let's not forget the level of take-home pay for our staff, the vast majority of whom come from India. Look at hotels in Goa. The earning ability is greater on our ships. We have a manning office in Mumbai. There are queues out on to the street. It clearly is of value to these people."
But TUC general secretary Brendan Barber said: "Holidaymakers will be horrified to learn that some of the seafarers on their cruise ships are paid so little.
"It's high time the disgraceful practice of allowing the shipping industry to pay poverty wages to workers who don't live in the UK was stopped. Exploitative rates of pay for those working on British ships have no place in a modern society."
P&O Cruises confirmed last year that it was to introduce a new tipping policy across its fleet from April 2012.
Managing director Carol Marlow said at the time: “Tipping has always been an integral part of the cruise experience but sometimes our passengers tell us they’ve been confused over whether or when to leave a cash tip for their waiters and cabin stewards.
"Our new tipping policy aims to remove this confusion in much the same way as most restaurants these days add a suggested gratuity to the bill.
“The new policy will see a recommended tipping rate added to a passenger’s onboard account on a daily basis.
"The recommended daily rate per person will be the same as has been in place for several years, namely £3.10, which is less than other cruise companies recommend as a daily rate. If our passengers wish to vary this amount they can do so whilst on board.
“We have had this policy in place for some time for those customers choosing to dine in the Freedom Dining restaurants on Oceana, Ventura and Azura.
"We have found the practice works well both for our customers, removing any awkwardness and confusion, and for our restaurant teams as they receive a fairer and more consistent level of tips.
"For this reason, we are extending the scheme to both dining and cabin stewards on all seven ships in the fleet from April 2012.
“Our people are always encouraged to 'go the extra mile' and are permitted to accept extra tips, over and above the recommended daily rate for truly exceptional service, if passengers wish to do so.”
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