A global problem close to home.

Last year, the world’s attention was drawn to the importance of the shipping industry when the containership Ever Given grounded in the Suez Canal.  

Our newsfeeds were dominated by maritime experts, discussions on shipping routes and the fragility of the supply chain. Although this was happening on the other side of the world, we realised that a containership stuck in the resultant queue might have our new sofa on it. Shipping affects us all.

Closer to home and more recently the public’s attention, and ire, was focussed on the redundancy of around 800 seafarers by P&O on several routes across the UK.  Discussions are being had from parliament to pub stools on the fairness of the basis of remunerating seafarers. A consultation has now been launched by the Department of Transport regarding seafarers’ right to the minimum wage.

Of course the importance of the shipping industry should not be news to us. As an island around 95% of all UK imports and exports are transported by sea. We rely on the key role played by support, diving and well intervention vessels working on offshore projects to provide our energy. Around £500 million worth of fish is landed by Scottish boats each year. In Scotland alone it is estimated that the maritime sector directly supports around £10 billion in turnover and 41,000 jobs.

The shipping industry is vital. Therefore seafarers are vital. Yet there is a concern of insufficient recognition, protection and reward of seafarers.

At the end of 2020, the IMO estimated that 400,000 seafarers were still on their ships, even though their contracts had ended, with COVID-19 restrictions meaning they were unable to be repatriated. Another 400,000 were thought to be stuck at home due to the restrictions, unable to join ships and provide for their families. It is perhaps no surprise that a Seafarers Happiness Index at the time recorded lingering fears, worries and doubts. Tensions were reported to be running high and increased working hours were eating into rest periods. Sadly the ongoing invasion of Ukraine has also resulted in seafarers becoming stranded in Odessa and other ports.

In April 2022 the ICS issued a document called “The Perfect Storm – The Impact of COVID-19 on Shipping, Seafarers and Maritime Labour Markets. Lessons learned and practical solutions for the future”. This included a set of Calls to Action – a series of 10 recommendations to act as a framework for future pandemics or similar crises. It is no surprise that recognising seafarers as key workers was one of them.

Employment rights of seafarers

The Maritime Labour Convention 2006 (“MLC”) sets out minimum standards related to the rights and working conditions of seafarers. The majority of major flag states (including the UK) are signatories and are therefore required to incorporate these rights into their domestic legislation. Concerns that the pandemic had exposed issues with how the MLC is written and enforced have now been acted upon and changes to the MLC agreed as a result. The aim of the changes is to ensure that:

• seafarers have appropriately-sized personal protective equipment, in particular to suit the increasing number of women seafarers;
• good quality drinking water is available free of charge for seafarers;
• States further facilitate the prompt repatriation of abandoned seafarers;
• States provide medical care for seafarers in need of immediate assistance and facilitate the repatriation of the remains of seafarers who have died on board;
• seafarers are provided with appropriate social connectivity by shipowners and States provide internet access in their ports;
• seafarers are informed of their rights relating to the obligation of recruitment and placement services to compensate seafarers for monetary losses; and
• all deaths of seafarers are recorded and reported annually to the ILO and the relevant data is published.

For those working in virtually every other sector, it would be unthinkable that changes to an international convention would need to be negotiated to secure such basic rights as appropriate PPE and good quality drinking water. However, this is the reality of the extreme challenges many seafarers have faced over the last two years or so.

On a domestic front, the recent high profile dismissal of some 800 ferry staff by P&O has sparked a lot of public debate about the legality and morality of P&O’s actions and the level of protection which is available to seafarers under UK employment law. The Transport Secretary, Grant Shapps, was certainly quick to heavily criticise P&O in a number of different ways and to bemoan the existence of what he called “legal loopholes” as far as the application of UK employment law to seafarers is concerned.

Amongst other things, P&O has been criticised by the government for not paying the national minimum wage (“NMW”) to seafarers. Grant Shapps has accused P&O of “ruthlessly exploiting legal loopholes” to avoid doing so.

Since the concept of the NMW was introduced by the National Minimum Wage Act 1998 there have always been exceptions which have applied to those who are working on ships. The government has also produced official guidance which sets out its own views on when seafarers are entitled to be paid the NMW. This guidance was last updated shortly before P&O’s now infamous decision to sack 800 seafarers by pre-recorded message hit the headlines and, amongst other things, sets out the government’s views that the NMW is not payable to seafarers who are working onboard ships which enter UK waters as part of an international voyage (which includes ferry services operating between the UK and the Republic of Ireland).

The UK regime has been deliberately structured in a way which means that seafarers are only entitled to be paid the NMW in certain circumstances. It therefore seems disingenuous for the government to describe the gaps in protection in this area as amounting to a “legal loophole”.

The government has announced that it intends to introduce measures to ensure that seafarers who are working on board ships regularly using UK ports are paid a “national minimum wage equivalent” (“NMWe”).

The Department for Transport has recently concluded a consultation process inviting views on whether the NMWe should be equivalent to or lower than current NMW rates; which types of vessel (if any) should be excluded from the obligation to pay the NMWe; and how frequently ships must be using UK ports before the NMWe regime will apply. The outcome of the consultation process should be published in around three months’ time.

Interestingly, the government is not proposing to amend the existing NMW legislation to expand the circumstances in which seafarers are eligible to be paid the NMW. Instead, the government is proposing “indirect” measures to improve pay conditions for seafarers by making access to UK ports conditional on payment of the NMWe and levying financial penalties on ship operators whose seafarers are not being paid the NMWe. However, these proposals have been met with criticism from the Trade Union Council (which has described them as “feeble” and “unworkable”) and concern from the British Ports Association.

Seafarers also have more limited protection under the Equality Act 2010 than other types of workers. Again, the law has been deliberately framed in this way. There may be circumstances in which a seafarer who is working in UK waters (or is in the process of applying for work or has recently completed working in UK waters) is the victim of blatant discrimination by their employer but has no remedy under UK law because the ship that they are working on is flying a foreign flag of convenience.  It is also lawful in certain circumstances for seafarers who are nationals of particular countries to receive a lower rate of pay because of their nationality, which would otherwise be a clear act of race discrimination.

The P&O affair has brought into focus that in a number of respects seafarers do not enjoy the same level of protection under UK employment law as other types of worker. This calls into question whether existing UK employment law is fit for purpose as far as seafarers are concerned. It remains to be seen how extensive the proposed NMWe regime will be and whether this will guarantee that seafarers who are working in UK waters will be legally entitled to the same minimum rates of pay as other types of worker. At present, it appears there is a possibility that the proposed NMWe may be lower than current NMW rates. It is also not clear what, if anything, the government is proposing to do to address the shortcomings in the protections which are afforded to seafarers in other aspects of UK employment law, such as under the Equality Act 2010. The government has been given a strong hint by the Employment Appeal Tribunal that changes are needed.

What next for seafarer welfare?

The grounding of the Ever Given in the Suez Canal, followed closely by the crew change crisis and other significant challenges created by the pandemic have gone some way to putting the plight of seafarers within the minds of the public (and on the agenda of governments) around the world.  From a UK perspective, the P&O affair has gone further in highlighting the disparity between the rights of seafarers and those of other ordinary workers when it comes to pay.

The court of public opinion has called for change and the UK Government has clearly signalled its intention to answer that call.  We await the substance of the Government’s proposals following the consultation and the extent to which they will deliver on the soundbites made by Mr Shapps in particular.  There will be many challenges for the Government to overcome, not least ensuring that the UK shipping industry remains competitive on an international stage and that international treaties are complied with. With the International Day of the Seafarer taking place tomorrow, 25 June 2022, it remains to be seen if the increased awareness of challenges faced by the ordinary seafarer will lead to meaningful and lasting change.
 

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