Seafarers’ Wages Bill [HL]

Lord Tunnicliffe Excerpts

Wednesday 12th October 2022 Grand Committee

[Lord Tunnicliffe (Lab)]

My Lords, the amendments in this group relate to the territorial scope of the Bill and the vessels to which this legislation applies. Seafarers across the board deserve proper compensation for their work and I welcome the opportunity to consider whether the Bill, in its present form, achieves this. To this end, I hope the Minister will clarify that all workers on the vessels listed in these amendments are already covered. When we landlubbers think of seafarers, we often picture those who directly control vessels, but the definition is incredibly wide and covers everyone from cleaners to the administrative staff on board. I hope the Minister comments on the Government’s approach to supporting better wages and conditions for all seafarers.

Amendment 5 in my name is a probing amendment and it is key. It seeks information from the Minister on the state of negotiations, particularly those with France and the Republic of Ireland, on the corridor concept. This Bill, which we support, is one small step towards addressing the issue of seafarers’ terms and conditions.

I respect what my noble friend Lord Berkeley just said but, at the end of the day, if these international conventions have achieved utopia for seamen, I would hate to see hell. Wages seem incredibly, unacceptably low in an international world. Perhaps that is not so true in the wider world, but they seem unacceptably low in Europe. I hope the Government put all possible energy into negotiations with other European states to establish these corridors. It sets a precedent for the worldwide consideration that seafarers deserve a better deal than they are getting.

Amendment 23 would prevent the refusal of harbour access where doing so would break international maritime law. In any situation in which harbour access is refused, in framing the appropriate guidance, a Government must have considered the safety and environmental implications of refusal. It moves to the general view that we must work on the international agreements in parallel and seek to ensure, as does the amendment in the name of the noble Baroness, Lady Scott, that the various conventions not only exist but are universally and even-handedly implemented.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)]

My Lords, I am grateful for the careful consideration of this Bill by all noble Lords. I reiterate what I have already said to noble Lords in private sessions: the Government are listening to concerns and will endeavour to answer in full all the questions raised by your Lordships today. I suspect that some will certainly be in writing, and I may well try to develop on some on some of the things I am able to say today so that we have full information as we head towards Report.

I sense that there are slightly differing views around the Committee, where some people want this to go much further and others are very cautious. Of course, both of those views potentially risk the Bill itself. I therefore just want to make sure that everybody has as much information as I can get out, particularly around the Government’s intent with the Bill and why it is drafted as it is. Noble Lords will have heard the previous Secretary of State speak about the nine-point plan many times, which was in response to the P&O decision that was made back in March. We recognise that this Bill is narrow in scope and potentially also in effect, as we cannot legislate outside UK territorial waters. It is none the less an important part of the nine-point plan that this sits hand in glove with the other work that we are doing to improve the welfare of seafarers to make sure that their terms and conditions are as good as they can be.

The amendments in this first group cover territorial scope and international law and I will try to address them in turn. Amendment 1 from the noble Lord, Lord Hendy, seeks to probe the application of the Bill in various circumstances. I completely accept the way that he introduced this and that he had intended some separate amendments that were deemed to be out of scope. It is worth making sure that the different groups of seafarers who he identified in his amendment are indeed covered. To look at it in more detail, on proposed new subsection (1A)(a), seafarers working or ordinarily working in the UK, including UK internal or territorial waters if the vessel is not exercising a right to innocent passage, are already entitled to the national minimum wage. That stems from Section 1(2)(b) of the National Minimum Wage Act 1998 and Article 2 of the National Minimum Wage (Offshore Employment) Order 1999. That change is therefore unnecessary, and I think the noble Lord would agree.

On proposed new subsection (1A)(b), voyages to or from the Crown dependencies would already be in scope of this Bill under the service definition in Clause 1. Of course, I recognise at this point that the UK Government can legislate only in the waters of the UK; therefore, it would be a similar circumstance as one would have, for example, with a journey to France.

On proposed new subsection (1A)(c), under Article 2 of the National Minimum Wage (Offshore Employment) Order 1999, a worker working or ordinarily working in connection with the exploration of the seabed or subsoil or the exploitation of natural resources in the UK sector of the continental shelf is treated as if they are working, or ordinarily work, in the UK. Those workers are therefore already entitled to the national minimum wage, so, again subject to the caveat about UK territorial waters, those workers are covered—ditto those who are working on services to offshore renewable energy installations. Again, I note that some of those may be far away from UK territorial waters. I hope that that reassures the noble Lord.

I note the point raised by the noble Lord, Lord Tunnicliffe, that it is not only the people who are in control of the ship. When I think about this, I do not think about the people in control of the ship but of all the other people on board, who do the really important day-to-day tasks that are sometimes forgotten. I accept that this is about making sure that we cover everybody on board, and I am satisfied that we do.

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[Lord Fairfax of Cameron (Con)]

My Lords, I apologise; I have only just arrived, because I was detained elsewhere. I want to pick up on the point of the noble Lord, Lord Berkeley, about ferries. Ferries have been referred to, so maybe the Minister can clarify this later. I need to read the Bill again, line by line, but nowhere does it refer to “ferries”. It refers to “ships”. In the current energy crisis, for example, you may have a service of tankers of diesel fuel coming in with the required regularity. They might be caught by the Bill, because of the frequency with which they call on the UK as part of their service, but they are certainly not ferries. The Minister will confirm this later, but I do not believe we should use the language of “ferries”, when we are in fact talking about ships.

[Lord Tunnicliffe (Lab)]

My Lords, this is a useful set of amendments to clarify some of the points. I hope that the Minister will either be able to provide that clarification or, if she wants to worry about the syntax of her reply, supply it in a careful letter.

I have two amendments in this group. Amendment 10 seeks to replace 120 with 52 in Clause 3(3), so I sit alongside my noble friend Lord Berkeley and the noble Baroness, Lady Scott. My noble friend made a persuasive case for 50, as opposed to 52, and I will need considerable persuasion not to press this point on Report, unless the Minister is able to create a very powerful argument that there would be unintended consequences from that.

Amendment 36 seeks, in essence, to stop the effects of the Bill being, in a sense, destroyed by repeated regulations. Surely the Bill’s minimum requirements are in the primary legislation, and the adjustments to them should really be only upwards, not reducing the requirements.

I also join the noble Baroness, Lady Scott, in her concern about the DPRRC’s concerns. In my day, if it produced a recommendation, we used to shake in our boots and recognise that some deal or other had to be made with it because of the authority it carried. Once again, I hope the Government will recognise the authority and wisdom of that committee and accede to its suggestions.

[Baroness Vere of Norbiton (Con)]

My Lords, I am again grateful to noble Lords for sharing their thoughts on this group of amendments. The thrust of the amendments in this group is very much around probing the scope of the Bill in terms of the services and ships to which it applies. As the noble Lord, Lord Tunnicliffe, noted, I will write. I do not think he was implying that my oral replies are not carefully thought through—maybe he was—but the letter will be perfect. Noble Lords should await further information in the letter, but I will try to cover as many points as I can.

I look at this borderline, grey-area conversation that noble Lords are having, and at the back of my mind I keep thinking, “What sort of an operator are you if you will go to a different port in order to drop your frequency down to be just under or over any particular target so that you don’t have to pay your seafarers the national minimum wage equivalent in UK waters?”

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[Baroness Vere of Norbiton (Con)]

The Government are very willing to define what these services are and, by implication, those have close ties to the UK. I can probably come up with lots of other clever descriptors to define these sorts of services. A large container ship stopping at the UK once a month does not have close ties to the UK; it is an international container ship, shipping around wheat or whatever it might be shipping. We can think of some other language, but once we have nailed what the service is, where it goes, how frequently it goes and which ships it utilises, then we have defined it. That is it, we are done. That is the definition that works legally because it has hard boundaries and can be fairly well defined, I think.

I absolutely appreciate that Amendment 27 is a probing amendment. We intend to provide guidance to harbour authorities, and that guidance will be consulted on. We can define what the service is but we need to help harbour authorities to fully understand those definitions. We will consult with the industry to make sure that there is absolute clarity. I would not say that the guidance should be put on a statutory footing; that is not entirely necessary in this particular case.

I turn finally to Amendment 37. I have of course seen the DPRRC report. It was published only a few days ago so I beg your Lordships’ leave just to say that, at this stage, we are considering what is in it. We are taking it very seriously; I reassure the noble Lord, Lord Tunnicliffe, that we take all DPRRC reports very seriously. We will publish our response to it before Report so noble Lords will have the opportunity to peruse that. I have no doubt that we will be able to have further conversations about that.

[Lord Tunnicliffe (Lab)]

Will the Minister be answering on Amendment 36?

[Baroness Vere of Norbiton (Con)]

I absolutely shall cover Amendment 36. My apologies, I slightly went off-beam so I thought I had already covered it.

Regarding Amendment 36, the clause as drafted does not allow a Government to amend or reduce the overall extent of services in scope of the Bill. It provides only that regulations may make different provisions for different cases, including for different descriptions of service to which the Bill applies or non-qualifying seafarers. This power cannot be used to amend the Bill and is not intended to be used to alter the scope of the Bill. I slightly thought that I would need to come back to this particular issue to make sure that noble Lords are in agreement as to what we are trying to achieve here. I will give that further consideration.

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[Baroness Randerson (LD)]

My Lords, we do not have any amendments in this group, but I take this opportunity simply to make the point that we share the concern of those noble Lords who do have amendments in this group. These are important issues that reflect the reasonable fear that employers could use tactics that circumvent the measures in the Bill.

One thing that has been speculated on is that seafarers could be paid at a lower rate when they are outside UK waters to compensate for the higher rate that they must be paid in UK waters. There are things about which the Government can do nothing, but it is really important that the things that can be got right are looked at carefully to ensure that they are absolutely on the nail. I point in particular to Amendment 26 in the name of the noble Lord, Lord Tunnicliffe, to emphasise the importance of monitoring the effectiveness of this legislation and engaging with the trade unions. P&O’s tactics—the audacity with which they were announced surprised everyone, I think—exposed the weakness of the current safeguards. However, if the Government attempt to plug the loophole but fail to do so effectively, I fear that P&O would not be alone and other owners would attempt to do something similar—perhaps not as blatantly as the way in which P&O did it, but it certainly could undermine legislation further if the Government’s efforts here are not fully effective.

[Lord Tunnicliffe (Lab)]

My Lords, I will speak on the two amendments in my name in this group, but I commend the other amendments to the Minister’s study, because it is important to achieve clarity on some of these issues.

On Amendment 25, my original involvement with these sorts of issues was in an analogous industry—transport—where I was a shop steward and subsequently an industrial relations manager. In the crew situation, issues with roster patterns and pensions are every bit as important as wages. The way that rosters are handled in particular can have a serious impact on remuneration and a massive impact on quality of life. It is important that there is a proper impact report on these issues, ideally within 90 days.

This leads on to Amendment 26, because this and other issues would be much enhanced if we could develop a proper relationship with the trade unions. The importance of this from the point of view of the trade union movement is exemplified by an appeal—for want of a better term—to the International Labour Organization from the general secretary of Nautilus; the general secretary of the RMT, Mick Lynch; the general secretary of the TUC, Frances O’Grady; the acting general secretary of the European Transport Workers’ Federation; the general secretary of the International Transport Workers’ Federation; and the general secretary of the International Trade Union Confederation. I read those out to emphasise that this is a heavy coalition of the trade union movement. Their appeal is set out in a document that I hope the Minister has seen, which centres on what happened at P&O. It helps one to understand how broad detailing and managing the employment conditions of crew is and how important it is to get a hold of this to make sure that crews are properly looked after, both in their remuneration and conditions of work. I therefore commend Amendment 26 to the Minister.

[Baroness Vere of Norbiton (Con)]

My Lords, this third group of amendments is broadly concerned with the relationship of this Bill to the domestic national minimum wage. The noble Lord, Lord Hendy, has already decided that Amendment 3 is not necessary; I agree with him so, if noble Lords agree, I shall just move on.

Amendment 13, also in the name of the noble Lord, Lord Hendy, relates to the calculation of the national minimum wage equivalence and deductions. We have been clear that this will be covered by regulation and is not for the Bill. This also allows us a little more flexibility decades hence, should changes need to be made. Nevertheless, Section 2(5)(c) of the National Minimum Wage Act 1998 does not prohibit deductions from pay of costs for providing seafarers’ accommodation, food or water, but simply provides for regulations on the matter. We will very much be matching up.

Regulations under the Bill will need to be consistent with the provisions within the Maritime Labour Convention, or MLC, whereby requiring seafarers to meet the cost of food and water is expressly forbidden. We therefore do not need to amend the Bill to account for this. Perhaps the noble Lord might remind the RMT about that, if it feels that seafarers out there are being charged for those things. That is clearly and expressly forbidden.

Regarding deductions for accommodation, under the National Minimum Wage Regulations 2015, employers on domestic services are permitted to apply a reduction of up to £8.70 per day in respect of the provision of living accommodation, without that affecting the assessment of the worker’s pay for national minimum wage purposes. The MLC does not make express provision for reduction for accommodation, and shipping industry practice is not to charge seafarers for accommodation. It is not our intention that operators should be encouraged to make such reductions for accommodation to reduce their overall wage fee, so we will be considering this in the regulations in due course.

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[Baroness Randerson (LD)]

My Lords, I start by thanking the noble Lords, Lord Berkeley and Lord Mountevans, for joining us on some of these amendments. I will briefly underline some of the points that my noble friend and those noble Lords made.

The complexity of expecting ports to do what is essentially the Government’s job for them will undermine the effectiveness of this legislation. Think about the use of the term “surcharge”. You pay a surcharge when you use a service voluntarily; it has no implication of illegality. If, however, a company finds itself paying a surcharge according to the rubric of this Bill when it becomes legislation, it will have broken the law. In other words, it is paying a surcharge as a fine—and a fine should be called a fine. I urge the Minister to look again at the phraseology here. Let us be clear: if companies are going to be fined, let us call it a fine.

The other issue is the complexity of expecting ports to deny access to the harbour. The international law on denying access to a harbour is complex and it would be difficult for them to do so. They would have to be absolutely sure that there is no question of danger to life. As a result, they will err on the side of caution and it will not happen. As both the noble Lord, Lord Berkeley, and my noble friend Lady Scott said, detaining ships is a normal course of events. It is not done frequently but it is done, and for safety reasons as well. I urge the Government to have the courage of their convictions and give these powers to the Secretary of State, because they are much more appropriately those of the Secretary of State.

It is not as if the Government do not want to be involved, because Clause 11 gives them wide-ranging powers of direction. It essentially gives them control, so the Government want that control behind the scenes but do not have the courage to put their name on the notices. That is a strange approach, so I urge them to rethink the way this is to be done. The impact would be that well-meaning and very important legislation could be undermined. At the same time, it would put our ports in a difficult position, make their relationship with ship owners more complex and create for them, as other noble Lords said, a conflict of interest.

[Lord Tunnicliffe (Lab)]

My Lords, I have a couple of amendments in this group. The first is Amendment 12, which would create a minimum fine of £1 million. Whether that is the right figure, I am not sure, but the real concern is about the size of the owners; I believe that P&O’s owners have made $721 million in the past six months. There is a real risk that, if businesses of this size take an almost doctrinal opposition to the measure—the P&O debacle showed such a doctrinal opposition to reasonable conditions on board ships—a fine that is not substantial becomes just a cost of business. That would be regrettable; I am sure that it is not the Government’s intention but I would value some feedback from the Minister. How does one assure oneself that the fines are sufficiently large to impinge on the decision-making of these companies? There is a concern that good companies do the right thing anyway. The trouble is that we have a very real example in the recent past of one of these companies not doing the right thing; that is what provoked this legislation.

The second area concerns naming the inspector or inspectors. I tabled my amendment here to draw out how the world will know that this is happening. Organisations that have either a principal inspector or someone like that as a named individual are so much clearer as to who will be held to account for appropriate levels of activity. As a minimum, I hope that the Minister will be able to give me a feel for how quickly inspectors will be appointed and how many of them there will be, as well as assure us that there is adequate inspection capability. We know that this whole issue of minimum wage enforcement is pretty difficult in a land situation; at sea, it will be much more difficult to get the details to know whether an offence or the wrong charge has been committed.

With that, I come to the amendments in the name of the noble Baroness, Lady Scott, regarding the Secretary of State having the authority to determine the tariff, which will really be a fine. I think that harbour authorities are about harbours. I can see why they perhaps must be drawn in at one level but when it comes to becoming a policeman, in essence, that is what the state should be doing. I agree with the general thrust that this should be the Secretary of State’s responsibility.

Finally, I hope that the Government will give careful consideration to the amendments addressing the DPRRC’s concerns.

[Baroness Vere of Norbiton (Con)]

My Lords, this fourth and final group of amendments is concerned broadly with incentives, enforcement and compliance. There is a wide range of amendments herein. It has been helpful to have this discussion today.

I will start with Amendment 4, with which the noble Lord, Lord Hendy, seeks to make requesting a national minimum wage equivalent declaration a duty rather than a power that can be used with some discretion. The payment of national minimum wage equivalent would be a condition of port entry and so should be a matter for the harbour authority to decide. Furthermore, by making this a “may” rather than a “must”, we are allowing for flexibility in circumstances where there might be overlapping harbour authorities, for example where a vessel transits through one harbour authority’s area of jurisdiction to call at a port within another harbour authority area of jurisdiction. There may be other circumstances that noble Lords can think of where it is not necessary that this declaration is shared every single time. It should be noted that the Bill provides the Secretary of State with the power to direct harbour authorities to request a declaration, so there are necessary safeguards against harbour authorities not discharging this function properly.

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There have been a number of further mentions of different international considerations—the OECD common principles, for example. I will address those in writing. Obviously, as your Lordships know, the Government’s intention is not to share their legal advice, but we will be able to set out our position on how we feel this Bill works with other international obligations that we have.

[Lord Tunnicliffe (Lab)]

The noble Baroness promised to write letters. Will it be a common letter to all of us?

[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.