Employment Bill [HL]

moved Amendment No. 24B: 24B: After Clause 13, insert the following new Clause— ““Application of the national minimum wage to mariners (1) Section 1 of the National Minimum Wage Act 1998 (c. 39), (workers to be paid at least the minimum wage) is amended as specified in subsection (2), and section 40 of that Act (application of the wage to mariners) is amended as specified in subsection (3). (2) In section 1(2)(b) the words ““or, in the case of mariners, is a person satisfying either of the provisions of section 40”” are inserted after the words ““under his contract””. (3) For section 40 (mariners) there is substituted— ““40 Mariners The provisions referred to in section 1(2)(b) are that the person is employed to work on board— (a) a ship registered in the United Kingdom under Part II of the Merchant Shipping Act 1995; or (b) any other ship at any time it is within United Kingdom territorial waters.”””” The noble Baroness said: I should perhaps explain that I am moving this amendment because my noble friend Lord Rosser, who originally tabled it, is away on holiday. I move it on his behalf and as a former trade union official. The amendment was drafted by legal advisers at the RMT, the union to which the employees referred to belong. Until I was asked to move the amendment by my noble friend and the RMT, I knew little about seafarers’ terms and conditions. Like most people who use ferries and travel by sea from time to time, I had assumed that the employees looking after us were all in receipt of at least the national minimum wage, and the idea that some would be in receipt of what amounts to penury wages would not have occurred to me. It now appears that that is the case due to complexities and anomalies, which the amendment is intended to correct. Section 40 of the National Minimum Wage Act 1998, dealing with seafarers, reads as follows: "““For the purposes of this Act, an individual employed to work on board a ship registered in the United Kingdom … shall be treated as an individual who under his contract ordinarily works in the United Kingdom unless— (a) the employment is wholly outside the United Kingdom; or (b) the person is not ordinarily resident in the United Kingdom””." DTI guidance interprets Section 40 in the following way: "““Seafarers are covered by the minimum wage legislation whilst employed to work on a United Kingdom registered ship working in the United Kingdom or its internal waters (i.e. estuaries and, also, the sea between the United Kingdom mainland and many islands). In addition, when working on board a ship registered in the United Kingdom, a seafarer must be paid at least the minimum wage (wherever in the world that ship may be) unless: all his work takes place outside the United Kingdom (and its internal waters); or he is not normally resident in the United Kingdom and the ship is outside the United Kingdom (and its internal waters)””." On the DTI’s construction, working within the UK would not include all work performed within the UK’s territorial waters, but only that performed within its internal waters. Employment beyond internal waters is regarded as being wholly outside the United Kingdom. UK internal waters include the Solent, the sea between Scotland and the Inner and Outer Hebrides, the Firth of Forth, the Wash and the Thames Estuary. They do not include waters between Scotland and the Shetlands or between the mainland and the Channel Islands or the Isle of Man. Territorial waters are defined as 12 nautical miles from the baseline. That interpretation allows employers to avoid the national minimum wage requirements, even where other employment protection is provided in UK territorial waters and beyond. That seems anomalous. There seems to be no reason why a seafarer who would otherwise be covered by Section 40 of the National Minimum Wage Act should be denied entitlement to the national minimum wage purely on the basis that he or she is employed, for example, on a ferry travelling between the mainland and the Shetlands rather than one travelling between Scotland and the Hebrides. However, even on an interpretation of Section 40 of the Act which would see minimum wage entitlement extend to UK-registered ships, the protection would still be limited. That means that those working on board a non-UK registered ship within UK waters currently have no statutory entitlement to the minimum wage. Again, the position seems anomalous. Entitlement to statutory employment rights is not defined by the registered home of the employing entity in other contexts. Within the context of those employed at sea, the Corporate Manslaughter and Corporate Homicide Act 2007, which we discussed in much detail last year, provides, as regards extent and territorial application, as follows: "““Section 1 applies if the harm resulting in death is sustained in the United Kingdom or— (a) within the seaward limits of the territorial sea adjacent to the United Kingdom; (b) on a ship registered under Part 2 of the Merchant Shipping Act 1995””." Another concern is that those who do not meet the residence requirement but who work on UK-registered ships are not afforded the right to the national minimum wage. Such workers may do the same work alongside UK-resident workers on the same UK-registered ships, but be paid at different, non-minimum wage rates. That is plainly inequitable. It is hard to see the justification for permitting UK-registered ships to pay less than the national minimum wage. The Low Pay Commission, as long ago as 2000, drew attention to those anomalies. It said: "““Most seamen working on board a ship registered in the UK are eligible, even if they work for long periods outside the UK. But the minimum wage does not apply if all the work is carried out outside the UK or if the seaman is not normally resident in the UK, even if working on a UK-registered ship. We suggest that the Government should consider the coverage of seafarers in any future review of marine policy””." The RMT union, in support of its case for the amendment, has examples of seafarers not normally resident in the UK who are currently receiving wages very substantially below the national minimum wage on UK-registered ships. They have examples of a Portuguese steward employed by P&O on a rate of £1.50 an hour, which is very much below the minimum wage. Filipino seamen are also employed by P&O on substantially less than the minimum wage. That is regarded by the union as quite inequitable. The amendment deals with these anomalies. It stipulates that the national minimum wage must be paid to seafarers employed to work on board a ship registered in the UK under Part II of the Merchant Shipping Act or any other ship at any time it is within territorial waters. I understand that there have been many discussions between the RMT and government Ministers, but although the Government accept that there are anomalies, I think, it has not been possible to reach agreement. The amendment, which was drafted as a result of legal advice obtained by the RMT, represents a way forward and is intended to be helpful. I hope the Government will not accept the arguments likely to be advanced by the employers and the Chamber of Shipping. I understand that the Government have introduced a number of measures that benefit the industry, notably the introduction of the tonnage tax concession. As a result, the number of vessels on the UK register has grown considerably in the past seven years. There may well be a threat that, if forced to pay the national minimum wage, the companies will transfer the registration of their ships—that is known as flagging out. I understand that that threat is made whenever improvements in employment rights or equality legislation are proposed. The Government should not give in to such threats, particularly in the light of the substantial tax concessions that have been made. This amendment deals with the anomalies to which I refer and would prevent employers grossly exploiting non-UK-resident staff on UK-registered ships or other employees on any ship while in UK territorial waters. Can it really be argued that such an important industry should not be subject to minimum standards? Of course it cannot. I therefore hope that the Government will not advance the arguments likely to be made by shipping industry employers and will accept that this amendment is a genuine attempt to sort out what are widely acknowledged to be anomalies that produce a totally unsatisfactory position. I have this morning received a copy of a letter from the TUC indicating that it fully supports the amendment. It has already pressed for further discussions with the Minister. I hope that he will be inclined to receive this amendment favourably. I beg to move.