Employment Bill [HL]

My noble friend Lady Turner suggests that I add my voice to hers. We are talking about thousands of seafarers and their employers. Many of them are very good employers, but we are talking about the floor below which the bad employers should not be allowed to fall. My noble friend has read Section 40 of the National Minimum Wage Act which states that on a ship registered in UK the seafarer must be paid the national minimum wage unless the employer is wholly outside the UK or the seafarer is not ordinarily resident in the United Kingdom. At first glance I found myself unable to support this amendment, even though I knew that the union, the TUC and various honourable friends in another place support it. However, having read the ingenious opinion of learned counsel and taken account of the slave wages that are paid to Filipinos and other foreigners on ships, I have concluded that we should press this upon the Government. Since the object of Committee stage is to expound the reasons that the Government should consider, I shall put to the Committee the reasons that persuaded me that I should support the amendment. First, British seafarers on a British ship who work wholly outside United Kingdom waters can legally be paid slave wages. That is wrong. Secondly, foreign seafarers on a British ship with no place of residence in the UK can work cheek by jowl with British seafarers and be paid even worse slave wages, far below the national minimum wage; that happens. Unfortunately, I have been on such a ship. I learnt the details of the Filipino crew. My wife and I were astonished and appalled. Your Lordships will note that I have used the words ““British territorial waters”” not ““internal waters”” which, as my noble friend said, is in the guide issued by the DTI, which I imagine is now part of the Department for Business, Enterprise and Regulatory Reform. The guide issued by the Government through that ministry is completely fabricated. It says that workers, to get the minimum wage, have to work within the ““internal waters””. Where do they get ““internal waters”” from? It is a fantasy—a nightmare concocted by the DTI. The words ““internal waters”” are used when Parliament means to limit the application of its law, as in the Territorial Sea Act 1987. The national minimum wage does not refer to either territorial or internal waters. The normal principles of international law and the sea would suggest that the test is territorial waters, not internal waters. Just because someone happens to work on a ferry going to the Isle of Wight, and no further than that, that is used. It is a fabrication. The DTI has no authority, and no source to cite to say why they use the internal waters test. So the amendment uses territorial waters, which, as my noble friend said, is 12 nautical miles from the coast. The national minimum wage should apply on British ships in British territorial waters. That is the first objective of the amendment. It is in line with the Disability Discrimination Act and other anti-discrimination Acts, which protect workers in their area of occupation within territorial waters, if not beyond in some cases. The amendment faces a problem. It will be raised no doubt by lawyers and advisers to the Minister. It is a real problem, which is what worried me at first. We must understand that British law cannot be made applicable worldwide. You cannot do that; you are making law within your own jurisdiction. That was made clear by the Judicial Committee of the House of Lords in 2006 in the case of Lawson v Serco, usually referred to as the Serco case, especially by the speech of the noble and learned Lord, Lord Hoffmann, who in paragraphs 34 to 40 in the Industrial Relations Law Reports makes clear that the application of our law must be restricted to the area either within Britain or within British territorial waters or otherwise sufficiently strongly rooted in their relationship with the United Kingdom. I make a point here that the Employment Relations Act 1999 repealed what was a clear statutory provision in Section 196 of the Employment Rights Act, which limited the application of British law in that way. Most commentators have agreed that after that repeal, for reasons which totally eluded me then and are mysterious to me now, United Kingdom judges were left, as authors have agreed, in what might be called a void, to set their own limits to United Kingdom laws and prevent its application worldwide outside the United Kingdom. Lawson v Serco makes it clear that the connection with the United Kingdom must be very strong. But, if noble Lords read the speech of the noble and learned Lord, Lord Hoffmann, they will see at paragraph 38 that he says that a foreign correspondent permanently on the staff of a British newspaper, who is posted to Peking—I hope that Hansard will put ““(sic)”” after ““Peking”” because the noble and learned Lord was not up to speed with Beijing—who lives there for years can still be an employee of the newspaper and could make a claim for unfair dismissal, even though he spends all his time in Peking, under domestic British law because the link would be sufficiently strong. The spirit of their Lordships’ judgment in the Serco case must mean that British seafarers on board British ships must be paid the national minimum wage. The same logic must surely mean that any seafarer on a ship flagged—that is, registered—in the UK must be paid the national minimum wage whilst working in British territorial waters. This is where the new issue arises. A seafarer working on a British registered ship cannot be given worldwide rights but rights within British territorial waters. That is precisely the point raised by paragraph (b) of the amendment. Learned counsel’s opinion faced up to the problem and made it clear that the national minimum wage should be calculated as a proportion of the time an individual is employed to work on board any ship at any time it is within United Kingdom territorial waters. The amendment proposes what logic suggested to learned counsel—namely, that the national minimum wage should be applied proportionately to what is done on a British ship within British territorial waters and what is done outside. That would be a new form of jurisprudence applicable in the national minimum wage area, but I ask the Committee to notice that the National Minimum Wage Act 1998, by being silent on its applicability—unlike various other statutes—invites the courts to make some sensible law which is in accord with the rules suggested in Lawson and Serco by your Lordships’ judicial committee in 2006. As my noble friend has said, it has been reported that the Chamber of Shipping, the employers, threatens that any such amendment to slave wages for foreign seafarers will be met by industrial action by the owners and a massive flagging out—the removal of the British flag from their ships—so that they can put up some other convenient flag instead. Paying the national minimum wage in this way, they say—and we must take account of this argument—would remove their competitiveness. I do not believe that this threat of industrial action by the owners should be taken seriously. First, as my noble friend has said, they would lose their tax concessions, which are now quite substantial. I wonder whether they would take action in the face of that. Secondly, as a matter of principle, industrial action of that kind would infringe the balance of social justice and the flexibility of competitiveness to which our Government are already committed. They are also committed to the Commission’s notion of ““flexicurity””, which means flexibility for management in the competitiveness of the labour market and security for workers, as a balance in a modern social society. Flexicurity is now the buzz word of European law and of employment lawyers in comparative work. I refer the Committee to the recent Green Paper from the Commission on the modernisation of labour law and subsequent documents to that Green Paper. To avoid our domestic legislation having worldwide effect—it will not have it anyway, but to avoid appearing to give it worldwide effect—the amendment ingeniously drafts a line which would confine the national minimum wage to applications within British territorial waters, where the Royal Navy and the Inland Revenue can rule, but excludes hours worked in foreign parts by foreign seafarers while giving them, quite properly, the national minimum wage within our waters. This is a compromise—one could have gone much further—fully in keeping with your Lordships’ Judicial Committee in the Serco case. Indeed, it is arguably less favourable to seafarers, especially foreign seafarers, in certain respects. I am not criticising the amendment but adding my voice for the Government to use this debate to consider carefully for Report whether they will not give us something like this to achieve greater justice for seafarers, both in our waters and on British ships, in relation to the national minimum wage.