Seafarers’ Wages Bill [Lords]

Louise Haigh Excerpts

2nd reading
Monday 19th December 2022 Commons Chamber

[Louise Haigh (Sheffield, Heeley) (Lab)]

May I wish you, the whole House and the staff of the House a very happy Christmas, Mr Deputy Speaker?

Earlier this year, this House stood completely united against the action taken by P&O Ferries. There was total consensus that that criminal act was a national scandal. Some 800 British workers were sacked with no notice—nearly 800 livelihoods were lost because a rogue company made a calculation that it was cheaper to break the law than abide by it. At the time, I stood side by side with many of the sacked crew in Dover. A married couple who had been employees of P&O Ferries for 14 years spoke to me about the reward for their years of loyal service: summary dismissal via a pre-recorded video message, being marched by private security guards off the ships they lived and worked on, and being treated like criminals. That was the human face of P&O’s criminal act. It was the reality of a business model that has been allowed to prevail for far too long on our seas—a business model predicated and dependent on exploitation.

As the Secretary of State knows, Labour supports the provisions in the Bill, but, as we have already heard, it is wholly insufficient. Its test must be whether it will end those exploitative practices that have become commonplace in our maritime sector. Will those responsible for the P&O scandal be brought to justice? Will the Bill stop another P&O scandal? I ask because six months on, this Dubai-owned company, which received millions in taxpayers’ money during the pandemic and which tore up the rights of British workers and bragged about it to Parliament, has continued business as usual. It should be a badge of shame for this country that P&O Ferries and DP World did what they did precisely because they thought they could get away with it. They knew they could exploit our weak employment laws. They made the calculation that it would be cheaper and easier to pay off those workers because this Government would not hold them accountable.

Despite all the Government’s promises, despite all their outrage, P&O’s central calculation was correct, was it not? Earlier this year the then Prime Minister himself said that P&O Ferries would face criminal sanctions. The then Transport Secretary said that it would be placed under criminal investigation. He demanded that the boss, Peter Hebblethwaite, stand down. He even demanded that P&O rename its ships, stating that it was completely wrong for them to sail under names such as Spirit of Britain and Pride of Kent. Six months on, however, that chief executive and those who deliberately broke the law in plain sight have faced no consequences whatsoever, and, as far as I am aware, their ships are still happily sailing under those names.

Workers across the country may well be looking to this Government and asking what exactly is the point of them if they can let P&O get away with all this—because Peter Hebblethwaite has been rewarded with a promotion to another directorship within the company. There has been no criminal prosecution as was promised: the Insolvency Service refused to take forward a prosecution, and chose not to consider the public interest test in doing so. There has been no action against any of the directors responsible. Every day that Peter Hebblethwaite remains in charge of P&O Ferries, other employers who wish to undermine the rights of British workers will find comfort. He is unfit to lead a British company, and he should be disqualified as a director.

I will be grateful if the Minister who winds up the debate tells us whether he agrees with that, and why it is that six months on, the Insolvency Service is still considering his case when the evidence could not be clearer. He bragged about it to a parliamentary Select Committee! Will the Minister bring that case to a conclusion, and use his own powers under the Company Directors Disqualification Act 1986 to finally bring this individual to justice?

The fundamental point, however, is this. If P&O Ferries or any of its low-cost rivals wanted to do all this again, nothing in the Bill or anything else that the Government have put forward would stop them. P&O Ferries decided not to notify either the Secretary of State or the competent authorities of the flag states of Cyprus, Bahamas or Bermuda of its dismissal plans—a legal requirement under sections 193 and 193A of the Trade Union and Labour Relations (Consolidation) Act 1992—and refused to consult the workforce ahead of their dismissal.

The Secretary of State’s predecessor said:

“where new laws are needed, we will create them…where legal loopholes are cynically exploited, we will close them, and…where employment rights are too weak, we will strengthen them.”—[Official Report, 30 March 2022; Vol. 711, c. 840.]

So why does the Bill contain nothing about notification of flagged vessels, or increased sanctions for those who fail to consult ahead of redundancy? The only way to prevent this from happening again is to hike up the damages that can be paid at tribunals, and/or to slap criminal liability on those who break the law in the same way as Peter Hebblethwaite, who bragged about it. Why have the Government shied away from taking the action that is so clearly needed—and why, six months on, have they still not published even a draft of their promised strengthened code on fire and rehire? It was due for consultation in the summer, but it has still not been published. Even the very little that the Government promised in the wake of this scandal has fallen by the wayside.

Let me now turn to the provisions of this limited Bill. We do, of course, welcome the intention to ensure that operators pay a national minimum wage equivalent to those who have a close working relationship with the UK, but, as we have heard, significant elements of these provisions and their enforcement must be strengthened to prevent avoidance, which we know is rife in this sector. First, the minimum wage provision has an offset allowing employers to deduct costs of providing accommodation. That is clearly ripe for abuse, and must be explicitly ruled out. Then there is the issue of “port hopping”. As the Bill stands, operators fall within the scope of the Bill if they call at a single UK port on at least 120 days within a year. In the case of some routes, such as that of the Pride of Hull, only slight adjustments to their timetable would allow them to escape paying the minimum wage. That period must be reduced. The initial drafting specified 52 visits a year.

There is also the issue of enforcement. In his nine-point plan, the now Business Secretary pledged to involve His Majesty’s Revenue and Customs in ensuring compliance with minimum wage legislation, but the Bill does not include a direct role for HMRC, the only expert in minimum wage compliance; and there is no clearly defined minimum fine for breaching the Bill’s provisions.

That brings me to the role of the port operators themselves, which was mentioned in earlier interventions. This is, perhaps, the most troubling aspect of the Bill. Many operators do not just run the ferry services, but operate ports as well. P&O itself operates a port. The Government are potentially asking operators such as P&O to fine themselves. That is utterly perverse, and the Government must think again. I note that the Secretary of State said he would retain powers to decide which ports would enforce fines, but he must set a national tariff for surcharges and designate a Government agency for collecting them.

The P&O scandal was supposed to represent a line in the sand for seafarers’ rights. The Secretary of State’s predecessor was clear about this, saying that the Government would work with

“unions and operators to agree common levels of seafarer protection on…routes.” —[Official Report, 30 March 2022; Vol. 711, c. 841.]

Seafarers’ exploitation is every bit as much about conditions as it is about pay. Baroness Vere of Norbiton, the Minister in the other place, said that the Government would act on that wider exploitation only

“where it is proven that it is appropriate to do so.”

Let me briefly give the House an illustrative example of why that is so important.

An agency worker can be contracted on the Dover-Calais service at the shamefully low rate of £4.75 an hour. As is common in the industry, they could be expected to work up to 91 hours a week, on board, full time, for 17 weeks at a time—not entitled to any pension; not entitled to the minimum wage or any sick pay when outside UK waters. I ask Members to imagine a season of winter storms in the Irish sea or the North Sea, where sleep is almost impossible, and to imagine spending up to 17 weeks on board, responsible for the safety of passengers and that vessel. The industry has already learnt from painful experience about the danger of this kind of exploitation, and of seafarer fatigue. The Herald of Free Enterprise disaster 35 years ago claimed the lives of 193 crew and passengers, but the Bill does nothing to address these dangerous and exploitative crewing and rostering practices. That is why we must see a legally binding seafarers’ charter on the face of the Bill—one that ends the race to the bottom from which P&O Ferries has benefited; one that smashes the business model dependent on the manipulation of vulnerable workers from around the world.

We are a proud seafaring nation. That tradition has been the envy of the world, but the ongoing exploitation of seafarers is a stain on it. With this Bill, we have the chance to drive out these exploitative practices for good, and ensure that another P&O can never happen. That is why Labour supports it today, but will seek to work with the Government to strengthen it in Committee, and ensure that never again can we allow such exploitation to go unchecked on our seas.

Seafarers’ Wages Bill [Lords]

Louise Haigh Excerpts

Report stage & 3rd reading
Tuesday 7th February 2023 Commons Chamber

[Louise Haigh (Sheffield, Heeley) (Lab)]

This House agreed last March that the action taken by P&O Ferries was a national scandal. As the Minister said, 800 British workers were sacked with no notice. It was the reality of a business model that has been allowed to prevail on our seas for far too long—a business model predicated and dependent on exploitation.

As the Minister knows, Labour supports the Bill’s limited provisions, and we welcome the steps that the Government have taken to improve it in Committee. I know that the Minister has been listening and I thank him for the work he has done on strengthening the amendments that we called for in Committee. Amendments 3 to 10 beef up the enforcement and compliance of the provisions, amendment 26 allows for an unlimited fine to be imposed for breaching minimum wage provisions, and amendment 17 deletes the provision allowing operators to retain their revenue after a fine and ensures that it goes towards seafarer welfare. My hon. Friend the Member for Wythenshawe and Sale East (Mike Kane), the shadow Minister, called for all those amendments in Committee, so we are very grateful to the Minister for this progress.

Fundamentally, however, as we have heard throughout this debate, the test for this Bill is whether it will end the exploitative practices that have become commonplace in the ferry sector for too long. Will it bring those responsible for this scandal to justice? In short, will it stop another P&O? Because six months on, it remains nothing short of a scandal that this Dubai-owned company, which received millions in taxpayers’ money during the pandemic, tore up the rights of British workers while its profits soared. And six months on, the chief executive, his board and those who deliberately and consciously broke the law in plain sight have faced no consequences whatsoever. They trampled over the rights of British workers, they came to this Parliament and boasted about it, they said they would do it all over again, and they have faced no consequences.

Whichever way we look at it, the message this sends to rogue employers around the world is simple: they can attack the rights of British workers on our shores with impunity. Every day Peter Hebblethwaite remains in charge of P&O Ferries, other employers who wish to undermine the rights of British workers will find comfort. The truth is that if P&O Ferries or any of its low-cost rivals wanted to act in precisely the same way again, nothing in this legislation would stop them doing so. That is why we regret that amendments were not made to close the loopholes that P&O exploited in the first place. There was a refusal to consult, and a refusal to notify. The Bill does nothing to address those glaring loopholes.

We know that bad bosses will exploit every loophole, so there can be no doubt, no room for manoeuvre, no scope for avoidance—that is why we pushed to close the port-hopping provisions for good. Regrettably, as the Bill stands, operators fall within the scope of the Bill if they call at a UK port only 120 days within a year—this has been debated at length this afternoon—while regular operators who call at UK ports once a week are excluded from the provision. Given that the Minister has rejected the call expressed so clearly across the House, we hope that there will be very close monitoring of the application of the legislation to ensure that the loophole is not exploited as we fear it will be.

Above all, the P&O scandal was supposed to represent a line in the sand for seafarers’ rights. The current situation means that many ferry operators are reliant on the low-cost crewing model that P&O exploited on 17 March. That exploitation is every bit as much about the conditions and rights of those seafarers as it is about pay. It will shock millions across this country to learn of the shameful model that too many ferry companies employ. People are working up to 91 hours a week and are on board for 17 weeks without any entitlement to shore leave. They are not entitled to any pension, and they are not entitled to any sick pay when outside of UK waters. That is precisely why we need a strong, legally binding seafarers charter on the face of the Bill—one that ends the race to the bottom that P&O Ferries has so cynically exploited.

Regrettably, Ministers rejected that amendment. Will the Minister commit to publishing the seafarers welfare charter—he has been asked to do so many times today—which is the Government’s preferred option for setting minimum conditions for rostering, pensions and other aspects of seafarer employment, and explain why progress in agreeing it has stalled since August? Will he further consider making it mandatory for employers to sign it, so that it is truly binding and drives up conditions across the sector?

[Sir John Hayes]

The hon. Lady and I are wholly agreed on the seafarers charter, but this Bill may not be the best place for it because, as has been suggested in various contributions, it is broader and wider than the scope of the Bill. But I entirely agree that we need it, and we need it quickly.

[Louise Haigh]

I am grateful for that intervention. I accept that the scope of the Bill is limited, but it was introduced as an opportunity to address the issues that were highlighted so egregiously in the case of P&O Ferries, so it is a major missed opportunity for the Government not to at least have published it alongside the Bill.

In closing, Britain is a proud seafaring nation. That tradition has been the envy of the world. The ongoing exploitation of these workers on these routes—all too often by entities allowed to be flagged elsewhere—is a stain on that tradition. With this Bill, we have moved a small step forward, which we welcome, but regrettably the chance to end that exploitation once and for all has today been missed.