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.