The Seafarers’ Wages Act 2023 comes fully into force on 1 December 2024, and imposes significant new duties on both the operators of services to which the Act applies and harbour authorities.

Both operators and harbour authorities are liable to criminal penalties for failing to comply with their duties under the Act.

Please refer to our previous blog for our commentary on the purpose and objectives of the Act.

Seafarers who are working on international routes do not qualify for the UK national minimum wage (“NMW”) when working in UK territorial waters, unless they are working on a ship which is registered in the UK and they are also ordinarily resident in the UK. The Act does not alter that legal position and does not extend the entitlement to the NMW to seafarers who do not currently qualify (“non-qualifying seafarers”). Instead, the Act creates a regime of surcharges and criminal penalties to incentivise the payment of wages equivalent to the UK NMW for work done in UK territorial waters by non-qualifying seafarers.

The Act applies to services which carry goods or people by ship between a place outside the UK and a place in the UK. It applies irrespective of the nationality of the seafarer, their place of residence or the flag state of the ship on which they are employed. The Act does not apply to services which are already covered by the National Minimum Wage Act 1998.

Where a harbour authority has reasonable grounds to believe that ships providing a service to which the Act applies have entered, or will enter, its harbour at least 120 times in a year, the harbour authority is obliged to ask the operator of the service for a declaration that non-qualifying seafarers who are working on the service are being paid at least the NMW when working in UK territorial waters.

For the purposes of the Act, the “operator” is the individual or a company who has, or has agreed to take over, the duties and responsibilities imposed on shipowners under the Maritime Labour Convention 2006 in respect of any ship providing the service.

Official government guidance states that the requirement to ask for a declaration is based on a total number of calls per service, rather than per ship, and that multiple ships can be operating the same service.

Harbour authorities will be required to impose a surcharge on the operator of a service where (i) the operator does not provide a valid declaration when asked to do so; (ii) the declaration is provided late or is misleading; (iii) the service is being operated inconsistently with the declaration; or (iv) non-qualifying seafarers are not being paid at least the NMW for work done in UK waters.

Where a surcharge is not paid, the harbour authority is required to refuse access to its harbour to any ships operating the relevant service. The intention is that the surcharge is at a level which incentivises the payment of NMW equivalent to non-qualifying seafarers.

Much of the detail underpinning the Act is set out in the Seafarers’ Wages Regulations 2024, including: the surcharges’ tariff, what qualifies as “UK work” for the purposes of the Act, and the complex mechanisms for determining whether a non-qualifying seafarer is being paid the NMW equivalent for UK work.

Operators who fail to comply with their obligations under the Act and Regulations risk financial penalties, criminal prosecution, and reputational damage. The intention is that details of any surcharges which have been imposed will be published on the UK government’s website.

Harbour authorities also face criminal sanctions for failure to comply with any statutory duties imposed by the Act and Regulations. It is therefore essential that harbour authorities properly understand these duties and the implications of non-compliance.

Collective redundancy requirements for ships under the Employment Rights Bill

The recently published Employment Rights Bill intends to make substantial changes to existing collective redundancy consultation and notification requirements, which will affect those who employ seafarers.

The Bill intends to extend the existing consultation and notification requirements to where 20 or more redundancies are proposed in a 90-day period across multiple workplaces, rather than just at a single “establishment”.

Foreign registered ships are currently exempt from the requirement to file an HR1 Form to notify the Secretary of State of collective redundancies. The Bill intends to change that so that the duty to file an HR1 Form will apply to foreign registered ships which are categorised as “GB-linked ships” according to a specific statutory definition.

Ships providing services to which the Seafarers’ Wages Act applies will be caught by this definition if they are either operating the service between a place in Great Britain and another place in the UK, or have entered a harbour in Great Britain on at least 120 occasions in a specific 12-month period (or, if the service has been provided for less than a year, entered a harbour in Great Britain on at least 10 occasions in each month for which the service has been provided).

In practice, this will mean that an employer will be under a duty to submit an HR1 Form where it is proposing to make 20 or more redundancies within a 90-day period across one or more of its UK registered ships and/or any foreign registered ships which are “GB-linked ships”.

A failure to comply with a legal obligation to file an HR1 Form is a criminal offence, punishable by a fine.

The duty to file an HR1 Form would co-exist with a statutory requirement for collective redundancies across one or more “GB-linked ships” which fly the same foreign flag to be notified to the competent authority of the flag state.

Foreign flagged ships which do not meet the definition of “GB-linked ship” may nevertheless still be subject to an obligation under UK law to notify any collective redundancies to the flag state. Whether this duty is triggered would depend on the circumstances, including the degree of connection between the activities of the foreign flagged ship(s) and Great Britain.

For guidance on navigating these legal details, please don't hesitate to contact our employment team.

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