Seafarers’ Wages Bill [HL]

Lord Hendy Excerpts

Wednesday 12th October 2022 Grand Committee

Moved by

[Lord Hendy]

1: Clause 1, page 1, line 5, at end, insert—
“(1A) This Act also applies to a service for the carriage of persons or goods by ship, with or without vehicles, between—(a) a place in the United Kingdom and another place in the United Kingdom;(b) a place in Crown Dependencies and a place in the United Kingdom;(c) an offshore oil and gas installation on the UK Continental Shelf and a place in the United Kingdom; and(d) an offshore renewable energy installation within the UK Exclusive Economic Zone and a place in the United Kingdom.”

[Lord Hendy (Lab)]

My Lords, I begin by apologising for not being able to be present at Second Reading on 20 July. I am not just sorry to have missed your Lordships’ contributions on the Bill; it is a deep personal regret that I did not hear the valedictory speech of Lord Mackay, who was in my view one of the greatest of our Lords Chancellor. Of course, I was able to read the proceedings in Hansard and watch them on television. I thank the Minister for her Teams seminar yesterday. Again, I apologise that my equipment failed me and I was able to participate for only the first two minutes.

Naturally, the Bill is to be welcomed but it is a matter of regret that it is confined to the national minimum wage equivalent. This is just one of the nine points in the Government’s response to the P&O Ferries calamity on 17 March and, even in that regard, it may not achieve the purpose stated by the Minister in point one of her letter of 31 March, which said that this will ensure that P&O can derive no benefit from the actions it has taken in paying staff less than the minimum wage and it must reverse the decision. The fact is that, even paying the national minimum wage equivalent, P&O will in fact save money over the previous regime.

Apart from the egregious flouting of the law on 17 March, one striking feature of the P&O Ferries saga is that it also threw overboard all the collective agreements that the company had reached with the trade unions over the previous 100 years or so. These contained provisions about, among other things, procedures to achieve changes to terms and conditions, dealing with redundancies, and procedures to resolve disputes. That is why the Minister’s ninth point in the letter was so gratefully received: the creation of “minimum wage corridors” and asking unions and operators to agree a common level of seafarer protection on ferry routes. The Bill could have given legislative support to these excellent proposals and I ask the Minister, first, how the Government will achieve them and, secondly, where she and her department have got to in their bilateral discussions.

Noble Lords need not fear—I have just another couple of sentences to say before I introduce the amendments. The Bill could have gone a lot further in re-establishing terms and conditions beyond the minimum hourly rate, including those that were provided for in previous collective agreements, such as training, pensions, rostering, crewing levels, recognition, disputes, and so on. I wonder whether the Minister and the department have any plans for legislative support in that regard.

One other obvious thing the Bill could have done was to stop up the loophole in Section 193 of the Trade Union and Labour Relations (Consolidation) Act, which excludes any penalty to enforce the duty of a ship operator sacking UK workers for redundancy to notify the authorities in the flag state of the vessel. We know this is a loophole because on 19 August this year the Insolvency Service said that a prosecution of P&O Ferries in this regard was not possible. I wonder whether the Minister will be able to say something about filling that lacuna.

With that digression, I turn to the first group of amendments, which concern the territorial scope of the Bill and an aspect of the application of international law. I will speak to my Amendments 1, 15 and 16, while Amendments 5, 23 and 38 deal, respectively, with minimum wage corridors, preventing breaches of maritime law and upholding international agreements to which the UK is party.

I will of course withdraw my first amendment, but it was put in on the footing that I would move an amendment to expand the scope of the Bill from dealing with not just the national minimum wage but the protection of other terms and conditions as well. However, I was advised quite properly by the Public Bill Office that that was not possible within the scope of the Short Title. I am therefore left simply asking the Minister to confirm my understanding that the national minimum wage already applies on vessels working on domestic routes, that those seafarers in the offshore oil and gas maritime supply chain are also covered by the National Minimum Wage (Offshore Employment) (Amendment) Order 2020 and that vessels sailing between the UK and Crown dependencies will be covered either by the Bill or existing legislation.

It is known—or so I am advised by RMT—that Condor Ferries, a low-cost operator contracted by the Governments of Jersey and Guernsey, pays less than the national minimum wage at present. It was not paying that national minimum wage up to 2014. Since then, I understand that Condor has denied union access to the Bahamas and Cyprus-registered vessels and therefore it is not known what rates of pay are operable. Presumably we are right in thinking that the Bill will apply to such vessels.

The one area where no protection is offered, as I understand it, even by the Bill is for the supply chain to offshore renewable installations in the exclusive economic zone, because they are not covered by the National Minimum Wage (Offshore Employment) (Amendment) Order 2020. The amendment that I propose should therefore close that loophole, but it may be that the noble Baroness has another way of dealing with that issue. Again, I am advised by RMT that there has been a recent case of a UK-flagged offshore facility utility vessel in the Port of Sunderland, where seafarers were working 12-hour days at a daily rate of €55, which comes to €4.58, or just over £4, an hour. In effect, by moving this amendment I simply ask the Minister to confirm that all those cases will be covered either by existing legislation or by the Bill.

The second of my amendments is Amendment 15, the purpose of which is to expand the phrase “territorial waters” to include

“the UK Continental Shelf and the UK Exclusive Economic Zone”,

both of which should be covered. What we are considering is the seafarers working on project vessels, floating hotels and other vessels that can be anchored at sites outside the UK’s territorial waters but within the continental shelf and UK economic zone. That is important, because the production of clean energy from offshore renewable sources and the storage of carbon in subsea facilities will see an increase in seafarer employment associated with this work, particularly in the North Sea.

My third amendment in this group is Amendment 16, which would delete Clause 5(3). Its purpose is to discourage operators of vessels from seeking to avoid the obligations under the Bill of providing data relating to the wages of their crew by registering vessels in countries or territories where not so restrictive data protection laws apply. I note that the Bill’s impact assessment does not consider the possibility of operators breaching the data protection laws of a flag state. I wonder whether that is because it was not thought to be a significant problem, but it might well become one if there are operators, such as P&O Ferries, that are quite happy to evade British law.

Those are my three amendments in this group. I beg to move.

[Baroness Scott of Needham Market (LD)]

My Lords, I will speak to my Amendment 38. Noble Lords might remember that at Second Reading the noble Lord, Lord Mountevans, and I raised the compatibility of this Bill with international agreements to which the UK is a signatory. Regrettably, the Minister did not address that issue in her reply, nor in her follow-up letters to participating Peers. It is really important that we give this issue an airing today.

There are many long-standing and recognised international conventions, including the United Nations Convention on the Law of the Sea and the international Maritime Labour Convention 2006, to which the UK is a signatory. Earlier this year, the International Labour Organization reached an agreement on minimum levels of wages for seafarers for 2023, 2024 and 2025. This was broadly welcomed by all stakeholders, including social partners. When the National Minimum Wage (Offshore Employment) (Amendment) Order 2020 was published, the department’s Explanatory Memorandum made it clear that these conventions precluded the provisions being applied to seafarers from non UK-flagged vessels, yet that is exactly what this legislation will do. I would like the Minister to clarify for the Committee what has changed between the publication of that memorandum in 2020 and today.

The fact of the matter is that, no matter how well- intentioned the legislation—these Benches do support a better deal for seafarers—a measure that appears to be contrary to the long-established norm that port states should not interfere with the internal running of foreign-flagged vessels, provided they conform with internationally agreed conventions, is something we should avoid. All these agreements were developed over many years, and they reflect the complexities of operating in multiple jurisdictions with very different legal systems and with an international workforce, with many nationalities on the same vessel.

These agreements are not really drafted like legislation —nor could they be, because they come from so many legal jurisdictions. They are about intent, and the intent is pretty clear. I hope the Government will think very carefully about whether they wish to risk disrupting these global agreements, or be seen to be thought of as disrupting them, because it would not be in the interests of the UK, or of any other country, for this established order to start to become undermined; nor would it be in the interests of seafarers.

There is a particular issue for the UK. We have enjoyed strong leadership in the maritime sector; that is something we should protect and preserve. The Government’s own impact assessment says that there is

“a reputational risk that the UK may be seen to be moving unilaterally on seafarer welfare issues rather than seeking improvements exclusively via multilateral channels.”

Does the Minister acknowledge that risk? Can she explain to the Committee what the Government intend to do to mitigate it?

Finally, many noble Lords were struck by the letter from the International Chamber of Shipping, which did not hold back on its concerns about the Bill. Again, I would be interested to hear about persuading not just Members of this House but the wider shipping community that we are still fully on board with these international conventions.

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I am grateful for all the contributions to this short debate. As I mentioned, we will study Hansard and make sure that we return with further information, as needed.

[Lord Hendy (Lab)]

My Lords, I am grateful to all noble Lords who contributed to the debate and to the noble Baroness for her response, in particular her reassurance that all the seafarers mentioned in my Amendment 1 are covered by the provisions of the Bill. The minimum wage corridors are clearly important and I am grateful to the noble Baroness for her update on the continuing negotiations. Is she able to say whether embedding minimum wage corridors in the legislation of bilateral states is under contemplation? She did not mention one matter: the progress towards collective agreements between ship operators and trade unions.

I hear what the noble Baroness said about legislating outside our territorial waters, but I wonder whether the department has considered other ways in which seafarers might be protected. It may be the case that operators in the North Sea will deliberately anchor hotel vessels and so on outside territorial waters to avoid the obligations of the Bill. I am also grateful to the noble Baroness for saying that she or the department will look again at the problem—if there is one—of operators with ships flagged in other states with less strict or stricter data protection laws saying, when they come to harbours in this country, “I cannot tell you what my seafarers’ wages are, because I am prohibited by the data protection laws of the state in which the vessel is flagged”.

We heard what the noble Baroness said on international law and international agreements, which everybody in the Room considers should be upheld in every way. There may be more discussion on this subject later today. I beg to withdraw my amendment.

Amendment 1 withdrawn.

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[Lord Berkeley (Lab)]

My Lords, I will speak to Amendments 7 and 9 in my name, which cover the same ground that the noble Baroness, Lady Scott, outlined so well. I still get confused—I know that some associations are also confused—as to whether it is one ferry or a service. As the noble Baroness said, how do you define a service? For example, does it matter where the ship is registered? I do not think it does, but it would be interesting to hear the Minister’s response. Where the contract of employment with the seafarers is concerned, does that make any difference?

I suppose my purpose in putting down the amendment to change the number of visits to a harbour—or the harbour—from 120 to 50 was also to probe whether it matters which harbour it is and what a harbour is. I know that this Bill is designed to support ferry workers, which of course I support, but a lot of other ships go around the coast. Coasters, for one, move china clay, cement, aggregates and other things. I am a former member of the harbour board of the port of Fowey in Cornwall. These ships go backwards and forwards; their crew are probably employed in UK contracts but they might not be. Are they included? If not, should they be?

Ditto with cruise ships. We read about many employees on cruise ships not being well paid. Most cruise ships probably move internationally; they certainly do not come to a particular port even 50 times a year. On the other hand, some smaller ones go around more often. Why should those employees not be protected in the same way as ferry operators? I asked one or two people why they thought it was so important to protect ferry operators. The answer was, “Well, they’re a particular type of crew who usually go home after their shift”. That is an odd definition. I am sure that it is not true when you look at the services to Spain and up to Scandinavia; they certainly do not go home every night. It is important that the Minister sets out the limits of this clause, why it is that way and whether it relates to the ships or the crews.

In relation to ships going across the channel—P&O might have three or four going across; I am sure that the crew get moved from ship to ship—is it a matter of making sure that the ship or the captain produces the documents? How is it recorded that crews who have gone from one ship one week on to another ship another week are covered by this Bill? It is a pretty complicated solution, but it is terribly important for people who may be on one side of the fence or the other. I am sure the Minister can give me a wonderful answer on this; if not, she can write to me.

[Lord Hendy (Lab)]

My Lords, I will speak to Amendment 8, which is simply an elaboration of the points that my noble friend Lord Berkeley has already made. The proposal here is to delete “the harbour” and insert “a harbour”. What lies behind that is catching those vessels that might do what I understand is referred to as harbour-hopping, where, in order to decrease the frequency with which they are recorded in any particular port, they go to a nearby port every so often to reduce the number.

My second point, which my noble friend Lord Berkeley and I have addressed, and my noble friend Lord Tunnicliffe has a slight variant on, is whether 120 occasions a year is far too high. It will exclude a lot of vessels that do weekly ferrying, which we would want to catch. If I may speak for my noble friend Lord Berkeley as well as myself, the reason we think it should be 50 is that, quite often, a ship may be serviced for a couple of weeks a year and it may not therefore achieve the full 52 occasions, even if it is running a weekly service.

[Baroness Randerson (LD)]

My Lords, I want to clarify what the debate has thrown up so far. I fear that the Government are guilty of mission creep on this, which may have occurred with the very best of intentions, but there is certainly confusion as a result. As outlined by the noble Lord, Lord Berkeley, a move from 120 calls to 52 would inadvertently bring in a much broader range of shipping.

The noble Lord, Lord Hendy, just touched on another issue that needs clarity, and I have three specific questions that it is important that the Minister answers clearly. If she cannot do that at this moment, we would all appreciate correspondence on this. First, on the move from “ships” to “services”, can we have absolute clarity on what a service is? How would it be covered if, for example, there is a refitting such as that just referred to by the noble Lord, Lord Hendy? I anticipate all sorts of ways in which companies will seek to avoid inclusion through the way they configure services, so we need clarity on the definition of “services”.

Secondly, in summing up the first group of amendments, the Minister again used the phrase

“close ties to the UK”.

This is at the core of the whole thing. Can we have a definition that will stand up in a court of law of exactly what the Government mean by that?

Thirdly, I am sure we would all be grateful if the Minister could address the concerns of the DPRRC, to which my noble friend Lady Scott referred.

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Moved by

[Lord Hendy]

3: Clause 2, page 1, line 18, after “of” insert “section 40 of”

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[Lord Hendy (Lab)]

My Lords, this group of amendments seeks to extend the protections given by the Bill. My noble friend Lord Berkeley will speak to the question of whether Clauses 4 and 9 should stand part of the Bill and my noble friend Lord Tunnicliffe will speak to Amendment 25, which seeks an impact assessment in relation to roster patterns, pensions and wages, and Amendment 26 on engagement with trade unions.

My amendments are Amendments 3, 13 and 14. I have now convinced myself that Amendment 3 is completely unnecessary. I was trying to ensure that the protection in Section 40 of the National Minimum Wage Act 1998, which deals with residency of seafarers, or lack of it, would still be a condition for engaging the Act where the seafarer was a regular visitor to UK ports but not resident in the UK. On reflection, it seems that it is not necessary to refer to Section 40 because Clause 2(c) specifically engages the National Minimum Wage Act as a whole, and therefore Section 40.

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Lastly, I will address the comments from the noble Lord, Lord Berkeley, once again on international law. I do not have any further comments to make on international law as regards the way that he framed it, but of course I will look back through Hansard and will consider it in due course.

[Lord Hendy (Lab)]

My Lords, I am grateful to all noble Lords who spoke in the debate, and to the noble Baroness for her explanations and her undertaking to look at certain matters again. I share my noble friend Lord Tunnicliffe’s regret that she could not go a little further with his Amendments 25 and 26, because we know from the experience with P&O Ferries that the collective agreements were torn up and the role of the trade unions abolished by that employer. Those amendments would have been quite useful to see what the impact would be on industrial relations and whether trade unions would be left with any role, whether over pensions, rostering or any other matter concerning terms and conditions. I beg leave to withdraw my amendment.

Amendment 3 withdrawn.

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Moved by

[Lord Hendy]

4: Clause 3, page 2, line 4, leave out “may” and insert “must”

[Lord Hendy (Lab)]

My Lords, these amendments also concern enforcement of and compliance with the Bill’s provisions. I have Amendments 4 and 11 but, to deal with this generally, Amendments 12 and 24 seek to impose much higher penalties—detention of a ship or a minimum £1 million fine. Amendments 31 to 34 deal with the Delegated Powers and Regulatory Reform Committee’s report. Amendments 20 to 22 and 31 deal with transferring tariffs from harbour authorities to the Secretary of State. Amendments 30, 35 and 39 depend on the removal of earlier clauses. Amendment 17 deals with naming the particular inspector.

My Amendment 4 is to Clause 3(1), which provides:

“Where ships providing a service to which this Act applies use the harbour of a harbour authority, the authority may request the operator … to provide a … declaration”.


I seek to change “may” to “must”, because it does not seem appropriate that the harbour should be left with any discretion at all. I appreciate that there are to be regulations later on that would give the Secretary of State power over harbour authorities, but one might have thought that it would not be unreasonable to demand in the Bill that harbour authorities demand an equivalence declaration.

My Amendment 11 is also to Clause 3, this time to Clause 3(5). As it stands, it requires that the operator must inform the harbour authority that there is an inconsistency with a declaration. I am seeking for the Maritime and Coastguard Agency likewise to be informed, because it will, essentially, be the regulator. I beg to move.

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[Baroness Vere of Norbiton (Con)]

Yes. I tend to do one letter addressed to all noble Lords present. A copy will be placed in the Library. It will be lengthy, but it will be set out by topic and cover, with as much detail as I can, things that I have not been able to cover today and any additional information that would be helpful to noble Lords.

[Lord Hendy (Lab)]

My Lords, I am grateful to all noble Lords who have spoken in the debate, and to the noble Baroness for her explanation and response to the points raised in this group of amendments. I am very grateful in particular that she will look again at the Delegated Powers and Regulatory Reform Committee’s recommendations. I should have said earlier that I am a member of that committee.

I wonder whether, having heard the almost unanimous view expressed this afternoon about the effective delegation of authority to harbour authorities, the Government would be prepared to look at that a little further. Having said that, I beg leave to withdraw my amendment.

Amendment 4 withdrawn.