Seafarers' Wages Bill [ Lords ] (First sitting)

Natalie Elphicke Excerpts

Committee stage
Tuesday 17th January 2023 Public Bill Committees

[Mr Holden]

As currently drafted, clause 3 confers on harbour authorities the powers to provide that the operator of a service within scope of the Bill provides a national minimum wage equivalence declaration. The nature of the declaration is set out in clause 4, so I will address it when we turn to that clause, but it is essentially a declaration to the effect that they pay any seafarers on board who do not qualify for the national minimum wage at least the national minimum wage equivalent for the time that they worked in the UK or its territorial waters.

A harbour authority may not request an equivalence declaration in respect of any year unless it appears to the authority that ships providing the service will have used the harbour on at least 120 occasions in that year. Clause 3 also includes a power for the Secretary of State to make regulations as to the form of the national minimum wage equivalence declarations and the manner in which declarations are to be provided. Finally, it makes it an offence for an operator to operate a service inconsistently with the declaration and fail to inform the harbour authority within a certain period.

Clause 4 sets out the nature of an equivalence declaration. As it stands, subsection (1) provides that an equivalence declaration in respect of a service to which the Bill applies is a declaration to the effect that either

“there will be no non-qualifying seafarers working on ships providing the service”

or non-qualifying seafarers working on ships providing the service will be paid at least the national minimum wage equivalent for their work on that service in the UK or its territorial waters.

The national minimum wage equivalent will be at an hourly rate specified further in regulations—the hon. Member for Easington asked about that earlier. Regulations may make provision for the hourly rate at which non-qualifying seafarers are remunerated in any period in respect of any work, which may include any provision referred to in subsections 2(2) to (6) of the National Minimum Wage Act 1998, or provision relating to currency conversion. Regulations may also make provision for whether, or the extent to which, a non-qualifying seafarer’s work in relation to a service is carried out in the UK or its territorial waters.

In making regulations under clause 4, the Secretary of State must

“seek to secure that a non-qualifying seafarer is…remunerated at a rate equal to the national minimum wage equivalent only if their remuneration is in all the circumstances broadly equivalent to the remuneration they would receive if they qualified for the national minimum wage.”

That essentially means that we will seek to ensure that the total pay that a seafarer receives for time worked in the UK and its territorial waters is, as a result of the regulations, no less than if they had qualified for the national minimum wage.

We will run a public consultation on the regulations, and my officials are working closely with stakeholders and officials in the Department for Business, Energy and Industrial Strategy and His Majesty’s Revenue and Customs to draft them. As the public consultation takes place, I hope that hon. Members will be able to see what happens.

[Mrs Natalie Elphicke (Dover) (Con)]

The port of Dover is one of those directly affected and, given the situation in relation to P&O, which affected so many seafarers in my constituency, it is a particular concern. In relation to clauses 3 and 4, I would be grateful if my hon. Friend the Minister could confirm that he will take into account the considerable concerns of port operators about how the declarations—with the regulations underpinning them—will be managed and administered, because that is not within the usual business of port operators; it is an exception to the way in which they ordinarily operate. I know—I say this on behalf of the port of Dover in particular—that although of course they will play their part in ensuring that seafarers have the right terms and conditions, they want to ensure that they know what they have to do and how they are supposed to do it, that there is no room for dispute and that they are given the support that they need to be able to administer this.

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[David Linden]

Even if people were not around last night, it will not come as a huge surprise that the Government are not particularly wild about standing up for workers’ rights. We on this side of the Committee happen to be of the view that we should be doing everything we can to try to support workers—[Interruption.] The hon. Member for Crewe and Nantwich chunters. I am more than happy to give way if he wants to stand up and speak. If he wants just to make a wee bit of noise behind the Minister, he is welcome to do so.

We support returning to the stricter criterion of 52 calls per year, which is what amendment 45 seeks to do. This is a key test of the Government’s commitment to seafarer welfare, and they failed in the Lords when they narrowly defeated Lord Tunnicliffe’s amendment that aimed to restore the criterion of 52 annual harbour calls.

National minimum wage and domestic employment law are difficult to enforce and apply in the maritime sector. That is why employers such as Stena Line, which employs UK crew on international routes from UK ports in Cypriot-registered vessels, enter collective bargaining agreements with domestic maritime trade unions. The UK Chamber of Shipping estimated that up to 45 major ferry routes served the UK economy in 2020, but that is subject to change. For example, P&O closed Hull-Zeebrugge in October 2021, but DFDS opened an unaccompanied freight service between Sheerness and Calais earlier that year.

In my view, the Bill should cover crew working for operators of containers, bulk carriers, cargo ships and vessels working in the offshore energy supply chain, as well as ferries. In 2018, the RMT estimated that extending the national minimum wage to cover domestic and offshore energy routes would bring 13,000 seafarer ratings into scope. The impact assessment for the Bill estimates only the cost to employers, not the number of seafarers who would be covered by the Bill.

I am concerned that the Government have dismissed out of hand the unions’ concerns over avoidance techniques. Port hopping, as we often refer to it, remains a genuine avoidance technique that becomes far easier to use the more frequently a vessel calls at a UK harbour. At 120 calls per year, it would be far easier for operators to make minor changes to scheduled port calls in order to avoid the legislation. A threshold of 52 calls, which was in the Government’s original proposals, would be far tighter. It was changed only after consultation with industry, although the trade unions supported 52 calls. I go back to the point that if the Bill is about protecting workers—the very workers who were so cruelly shafted by P&O—then it is incumbent on the Government to listen to the voices of those workers and trade unions, not the voices of industry. That is the whole reason we are here.

Disappointingly, the Minister in the Lords, Baroness Vere, was unconvinced that that avoidance technique could be used. She said:

“I do not think operators would play switcheroo with UK ports because, frankly, their customers would not put up with it.”—[Official Report, House of Lords, 26 October 2022; Vol. 824, c. 1506.]

The translation of that is, once again, “Leave it to the markets. The markets will dictate.” If we have learned anything over the course of the last few months in this House and during the P&O debacle, it is that simply leaving it to the markets is not a great idea. I am not reassured that the logistics market will self-regulate. The recent merger between Cobelfret and Seatruck Ferries, two operators who have been paying seafarers below national minimum wage on regular international services from UK ports for years, frankly, also increases the prospect of avoidance techniques.

I hope that has outlined just some of our concerns on the issue. For those reasons, I will formally seek to divide the Committee and vote against Government amendment 1.

[Mrs Elphicke]

I will take the opportunity to speak to these clauses and amendments. They cover the short straits, and first I will comment specifically on the issue of 120 calls per year. Looking at the short straits, according to figures from the UK Chamber of Shipping, the number of port calls meets the threshold by 30 to 40 times in relation to the Dover-Calais and Dover-Dunkirk lines: around 4,000 port calls that are made would come within the legislation. Whenever we set a threshold, it is important to set it with reference to the matter that we are addressing. The evidence is very clear that 120 days is a relevant and, indeed, low threshold in relation to the particular services that we are seeking to address within the remit of this important Bill, which, as has been discussed, very much has my short straits of Dover at its heart.

I am conscious that some good points have been made in relation to seafarers more generally. I hope that we can show some global leadership on this issue. I have been pleased to have the opportunity to speak at great length about seafarers’ rights with my hon. Friend the Member for Witney when he was Ports Minister. Although I can understand the remit being extended in the way that is being sought within the remit of the Bill, we need to look at seafarers’ rights more generally, as well as those bilateral agreements.

I now turn to amendments 47, 62 and 49. The Minister made some helpful comments in introducing this section, but I ask him, if I may press him further, for an assurance of the position, particularly relating to the calculation for food and accommodation. If I were to work in McDonalds—indeed, I did so for a very long time and enjoyed it greatly—I could have a certain amount of food on my food break if I were to work for four hours. If I were to work for the entire day, I would get much more McDonalds food—very tasty. That food would be free to me as a worker and that is the principle that we want to see for those at land and within our waters.

However, I think that some of the concerns that have been raised must not be seen only through the lens of our own domestic legislation in relation to the minimum wage and its calculation. I have taken some time to look at how these issues are treated within our national minimum wage legislation on land and issues such as accommodation—staying on ship would not, in my view, fall within the current definition of “accommodation” and its applicability for national living wage purposes. But it is right that these issues have been raised and that they are looked into carefully as we go through because, in relation to the operation of seafarers, particularly on these routes, our domestic provisions are not the market provision for these matters. The market for this is global; the conditions are global and international. When we talk about common market practice, it is within a global and international setting, with different countries applying different regimes to their seafarers.

When it comes to seafarers’ rights, we tend to think that this means countries who are very international, such as the Philippines and others, but I will give the Minister a directly relevant example to this food and accommodation issue. The Danish Maritime Authority allows for seafarers’ food subsistence allowance to be deducted from the calculation of national minimum wage. It is a matter for negotiation, either collective agreement or individual contracting, but, none the less, in the application of their calculation of national minimum wage, they do—

[Grahame Morris]

I thank the hon. Lady for giving way. I recognise the examples of Denmark and one other seafaring nation—I have forgotten which one at the moment—but they have sectoral collective bargaining. Their standards and pay rates are generally much higher. I hope she would acknowledge that. We are looking at a far lower level—just at the national minimum wage, without all of the package that I want to refer to in relation to pensions, accommodation and other things, roster patterns in particular.

[Mrs Elphicke]

I am grateful to the hon. Gentleman. Indeed, I would like later to come back in the relevant section in relation to roster patterns, which are very important.

I am giving the Danish example as a reason why we need clarity to exclude the provision from our calculation of national minimum wage. It is not appropriate or correct to exclude food and accommodation when someone is on their ferry. They work—too often—two weeks on, two weeks off. They are stuck on that ferry. They must have food and a place to put their head down. They will probably have a poor night’s sleep or a poor day’s sleep when they are off rota. It is absolutely essential that we have clarity so that, unlike in Denmark and other countries, for the purposes of our application of the minimum wage legislation in relation to seafarers operating in our own territorial waters, it would be the same if I was working at McDonald’s, or anywhere else, or working at sea. I ask the Minister to reflect on this matter and to consider whether he can give us some more assurance that that is indeed the intent behind the Bill, because it is a very important point, given the fact that there is different maritime practice even among European neighbours from a business perspective.

If I may, I will touch briefly on the desire to have improved rights for seafarers. The Minister has mentioned bilateral discussions. Again, it would be helpful for us to understand whether the bilateral discussions coming up in March with our Prime Minister and President Macron are intended to include some of the issues around seafarers that we have mentioned, because it will only be through a strong bilateral arrangement across short straits that we can ensure that we get the best possible safety and working conditions for our seafarers.

[Grahame Morris]

I agree with much of what the hon. Member has just said. I may have misunderstood—[Interruption.] Well, it is the first time; every day is a school day.

Can the Minister clarify something that he said earlier, which may well address our concerns? It is in relation to amendment 62. Did he indicate that on the point just made by the hon. Member, namely that, as the amendment says:

“provision prohibiting deductions from remuneration for accommodation costs, food or other entitlements”

will be addressed through regulation by the Secretary of State? I see that he is nodding, so that is good news indeed.

If I may, I will speak to amendment 62, which was tabled by my colleagues on the Front Bench and I, and amendment 47, which is very similar and which was tabled by the SNP. Both amendments address a broader question. I appreciate that the Bill is trying to address one specific issue by putting in place measures to prevent the actions of rogue bosses, such as the management of P&O, from being replicated by other ferry operators; I understand that.

However, what the Government must understand is that the motivation for P&O and others—I know that we will come on to nationality-based pay discrimination later—is that P&O made far more savings from changing the roster pattern and reducing the crewing than it did from reducing the wages by paying staff, who were mostly able seamen from India, less than the minimum wage. The Government must acknowledge that and if we are going to address this issue, we need some remediation.

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[Mrs Elphicke]

I had expected to speak on this issue when we reached new clause 5, but since we are talking about roster patterns, I will comment on it. The capsizing of the Herald of Free Enterprise was an absolute tragedy that we—the RMT and all of us down in Dover—come together to remember every year. It is such an important thing to remember, and I am grateful to the hon. Member for Kingston upon Hull East for mentioning it in this context.

Does the hon. Member for Easington agree that what we have seen, particularly in relation to Irish Ferries joining the short sea route, is that the Maritime and Coastguard Agency has a role at the moment in making sure that the standards of training are appropriate? We saw that the roster patterns, training patterns and crewing patterns in relation to Irish Ferries coming into Dover were changed from those that applied elsewhere in its operations. We also saw the MCA take action in relation to P&O when it tried and failed to stand up its new structures. I would like to see the MCA be stronger and firmer, and taking better action—

[The Chair]

Order. I have been very generous with interventions, but I must remind Members that interventions are supposed to be just that: interventions, not mini-speeches. If we could back to interventions being interventions, I would very much appreciate it.

Seafarers' Wages Bill [ Lords ] (Second sitting)

Natalie Elphicke Excerpts

Committee stage
Tuesday 17th January 2023 Public Bill Committees

[Mr Holden]

I thank hon. Members and welcome the spirit of amendment 58, which aims to provide urgent welfare facilities when they are needed. The Government believe, however, that those would be covered by clause 9(3), under which crew would be provided with access to urgent medical or welfare facilities or to undertake other emergency measures. We support the intention behind the amendment; in urgent cases concerning safety, a ship should be able to access the harbour under the framework that we have set out. Where an incident was not safety-related or related to the welfare of the crew and was therefore not covered by the force majeure exception, the ship would not be permitted access to the harbour.

[Mrs Natalie Elphicke (Dover) (Con)]

The concern, and I am pleased to hear the Minister has some sympathy for it, is that we do not want seafarers caught in the middle of the bad behaviour of bosses. I appreciate that the provision to which he draws our attention relates to that, but will he further consider whether that needs to be broader to protect seafarers?

[Mr Holden]

Members on both sides of the Committee are raising a similar issue about welfare. As an additional safeguard, the Secretary of State has the power to direct a harbour authority not to comply with its duty to refuse access. That will ensure that access is not denied—this has to be in rare circumstances for the Bill to work—where it would cause damage by disrupting key passenger services and supply chains. There are rare instances in which the Secretary of State has an overriding power, but on the broad swathe of trying to provide welfare, our view is that that is covered already under clause 9(3).

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[Mike Kane]

Indeed. Given the track record of shameful companies such as P&O, we have to change.

My final concluding remarks, Ms Harris, are to thank you for your excellent chairing for the first time in such a Committee. I also thank Mr Davies for his excellent deliberations as Chair this morning, and the Minister, because the Bill was brought to the House in the right spirit, for trying to do something. Members across the Committee recognise that, and I thank all those who participated and contributed. With that, I also thank staff at the Department for Transport and the Clerks of the House.

[Mrs Elphicke]

It is to be noted that new clauses 5 and 7 concern reports about whether more needs to be done. I think we agree across the Committee and more widely that what happened in the P&O case was a spark to firm action going forward.

We touched on the issue of roster patterns earlier on, but I want to address it specifically. We know it is something the Maritime and Coastguard Agency has looked at on the short straits. For me, the new clauses do not address the fundamental question of who will be responsible for ensuring appropriate and safe working conditions on that route. That responsibility sits with the MCA, but concerns have rightly been raised about individual operations, and new clause 5 will not go any way to addressing those particular concerns. I think the bilateral agreements being discussed may form a route to looking at some of the issues, particularly those that apply to the route between Dover and France.

Turning to pensions and wages more broadly, this is the first piece of legislation of its type. There are a number of mechanisms in this place, including the Transport Committee, which has shown to be diligent in its support of not just the P&O workforce but transport matters more generally. There are additional forums in this place that provide the correct routes and opportunities to assess whether this legislation is reaching its objectives and intent.

On new clause 7, it is important that the remuneration of affected seafarers is assessed and considered. I have been encouraged during discussions I have had on remuneration with DFDS, which operates on the Dover-Calais route, to hear that it embraces the opportunity to have these conversations about improving conditions for seafarers. But as regards the Bill, part of the nine-point plan is a comprehensive approach to tackling this issue following the appalling actions of P&O. Overburdening the Bill with additional requirements for statutory reports and assessments may actually delay the important work we all have to do—be it bilateral or voluntary agreements or other options.

[Karl Turner (Kingston upon Hull East) (Lab)]

I am interested in why the hon. Lady thinks putting the requirement to report into a statutory format would create a delay. How on earth does she believe it would delay anything?

[Mrs Elphicke]

I thank the hon. Gentleman for his question. Let me explain. This Bill is a piece of legislation that has been brought forward very quickly—in a number of months. I think we would all agree with that, considering the time that things take in this place, but it has a number of journeys to continue on. The first reports under the proposals here would take some time—within six months for the first report. This work is ongoing with the Department right now. I do not want to wait six months. What happens if France says, “Let’s not conclude the bilaterals. Let’s wait for your report.” It is absolutely right that Transport Ministers and the Secretary of State keep us updated and that they are accountable in this place to us all, as they are through the Transport Committee and on the Floor of the House, to make sure that the legislation does what it says, but I do not want to be waiting on a report for six months or a year; I want action now for the workers on the short straits.

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[David Linden]

The hon. Member is spot on. The reality is that this gentleman factored in that he would appear before a Select Committee, that it would be uncomfortable and that he would probably have to get some crisis comms advice. I rather suspect that Peter Hebblethwaite is walking around waving the fact that he has been able to withstand all this pressure from Parliament as a feather in his cap. He will see it as some sort of virtue that he can sell to future employers. The hon. Member is absolutely spot on: the fact that there is no personal liability means that these kinds of directors will behave with impunity.

New clause 9 does not mandate Members to vote for a report. It mandates us, on a moral basis, to vote for action to ensure that a company director who was as egregious as Peter Hebblethwaite can never again get away with that. Members of this House have a responsibility to stand up for their constituents. On that basis, I have tabled the new clause.

[Mrs Elphicke]

I wish to speak about this new clause, because we are all of the view that Peter Hebblethwaite should not be allowed to be a director. I made a formal complaint to the Insolvency Service on directors disqualification for the whole of that board. The Insolvency Service has still not completed its civil proceedings, although it has said that it is not minded to take criminal proceedings. It is clearly unacceptable that company bosses are allowed to act in that way and that directors disqualification does not apply.

This is a specific Bill dealing with a specific set of circumstances. I would like the relevant Department to look at why the Company Directors Disqualification Act 1986 and the criminal obligations in the Insolvency Service did not apply to this specific case. I have made representations to the appropriate Ministers accordingly.

I completely agree with the sentiments expressed by the hon. Member for Kingston upon Hull East, except his view that the Government have not taken any action. Throughout the P&O situation, we have walked literally shoulder to shoulder in support of people.

[Karl Turner]

I think the hon. Lady misunderstood what I said; perhaps I was not clear enough. I did not say that the Government have not taken action. Of course they have—we have a Bill. That is a start. It is not strong enough by any stretch of the imagination, frankly, but it is a start, and I commend the Ministers who were responsible for putting it together on an incredibly speedy timescale. However, the fact is that the calculation was made that the Government would turn a blind eye. That is the suggestion that I put to the Committee, and I think it is right. That was the reality of it—that nothing would happen.

[Mrs Elphicke]

I thank the hon. Gentleman for that intervention. That is clearly rubbish, because the Government at the time, including the then Secretary of State, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), took immediate action—action that no one expected to be taken—as did the Minister at the time, my hon. Friend the Member for Witney. I was involved directly in that action along with the then Secretary of State, the then Prime Minister and a number of Government Ministers, including my hon. Friend the Member for Witney, in relation to this issue. That action is the reason why we have the nine-point plan and why we have the Bill.

Opposition Members will always say that whatever the Government do does not go far enough. However, I have to say, in representing the people in Dover who were specifically affected by P&O, that I am very proud of the action that we have taken across the Chamber and so far in this House. I want to see the Bill put on the statute book at pace.

[David Linden]

The hon. Lady is talking about the importance of taking action. Other than a pretty toe-curling Select Committee appearance and a couple of bad media interviews, the only action I have seen so far is that Peter Hebblethwaite has received a promotion. He is still able to act as a company director, so for the sake of the hon. Lady’s constituents, I ask her to reflect on the fact that until such a time as Peter Hebblethwaite is unable to act as a director and get away with such behaviour in future, that action will not be enough.

[Mrs Elphicke]

As I said, I do not think that Peter Hebblethwaite should be a director and I am taking steps to ask the Insolvency Service to remove him.

[Karl Turner]

rose—

[Mrs Elphicke]

I will come back to the hon. Gentleman in a moment. What we have seen with P&O is why I think the right place for tackling this is through the Department for Business, Energy and Industrial Strategy, which I have been encouraging to look at this issue. P&O did not do this once or twice, but three times: it promoted someone to be chief executive who did what the bosses wanted, and then that person either got a payout and got moved on, or got a payout and got promoted. We have seen a pattern of behaviour where people at the senior level have been rewarded for doing what is in the owners’ interests, to the detriment of the company as a whole. We need to look at that, because that pattern of business behaviour is very clear on the face of it and it ought to have been clear to Companies House. We should look at that in relation to not just P&O, but other companies.

[Karl Turner]

I am sorry that the hon. Lady thinks what I said was “clearly rubbish”. The point that I was making—I will try to be calm—is that there was no deterrent. That should be the test. If she is satisfied that the Bill will deter all the bad employers from potentially following suit and making the same calculation—that things cannot be affected in a way that deters them from taking such terrible actions—that is fine, and she is content with the Bill. My point is that the Bill does not provide a deterrent, but the new clause proposed by the hon. Member for Glasgow East definitely does by making that director personally liable.

[Mrs Elphicke]

I think we have already explored how adding the odd report here or there will not be the game changer that is needed to ensure that acts like this do not happen again. That is why the Bill is part of an overall strategy and a nine-point plan, as the Government have set out.

New clause 9 would go considerably further than the obligations that already apply to non-compliance with the minimum wage regime. That regime includes criminal and civil penalties, so I do not think that the new clause would sit with the existing provisions on the statute book for civil and criminal liability in relation to the minimum wage regime. It is important that enforcement is effective and that it works. New provisions should fit in with existing legislation, and not conflict with or confuse it.

I fully share the sentiment of making those responsible for P&O—not just Peter Hebblethwaite but other directors on the board—personally criminally responsible, but unfortunately the new clause does not get us to that position. Personal liability is not just about wages; we need to ensure that there is appropriate liability and responsibility for the very serious issues that we have discussed with respect to safety at sea. Although I support the sentiment behind the new clause, I do not think that it would achieve the objectives that have been expressed.

[Karl Turner]

I had not intended to speak, but I am afraid that I have been motivated by the hon. Member for Dover to say a few words. I am confused. I am not trying to be awkward or to put her under any particular pressure, but I am truly confused by her suggestion that the new clause does not fit, as I think she said, with minimum wage legislation. Frankly, that is just nonsense. She will have to answer to her constituents who go on those ferries day in, day out—passengers, not crew.

The tragedy is that, because of what P&O Ferries did, the crew are exploited foreign workers. The passengers are probably worried, as I would be if I was travelling on one of those ferries, about seafarer fatigue. They are probably worried about the fact that people are doing 17 weeks with very few rest breaks. They are working seven days a week, for 12 and 13 hours a day, and might be charged for accommodation and grub. That is the problem that people will foresee. Respectfully, the hon. Member should think carefully about not supporting the new clause. It is no good saying that she respects the sentiment; she ought to agree with the new clause and vote with the Opposition.

[Mrs Elphicke]

I thank the hon. Gentleman for giving way, and I ask for a bit of latitude in responding. It is disappointing that Opposition Members are determined to get their headlines and try to make a point of difference. They are trying to say that we on the Government Benches are not working for the people and the seafarers when we are the people leading this legislation. I was clear that the new clause does not go so far as to work for safety. On rosters, asking for a report is not a serious attempt to deal with the issue. We know that a serious attempt will mean the rosters being dealt with outside this legislation. The Minister has set out issues in relation to—

[The Chair]

Order. We need to get back to the new clause.