Update on the Seafarers’ Wages Bill

Certain seafarers should receive pay at least equivalent to the National Minimum Wage whilst in UK waters – here’s the latest on the Bill’s progress.

Certain seafarers should receive pay at least equivalent to the National Minimum Wage

The Seafarers’ Wages Bill which, if enacted in its current form, will provide that certain seafarers who are not entitled to UK National Minimum Wage (NMW) should be paid at least an equivalent amount when working in UK waters, has received its second reading in the House of Lords where the Bill was introduced. This article summarises key features of the Bill and outlines what happens next.

The Seafarers’ Wages Bill was introduced in the House of Lords as part of the Secretary of State for Transport’s nine-point plan for seafarer employment and welfare protections following the conclusion of the Government consultation.

The Seafarers’ National Minimum Wage equivalent (NMWe)

Under current legislation, only certain seafarers who work in UK waters are entitled to receive the NMW.

However, the Government will empower Statutory Harbour Authorities (SHAs) to impose surcharges on shipping service operators who do not confirm that certain seafarers who do not qualify for the NMW because they do not, or do not ordinarily, work in the UK, are paid at least an amount equivalent to the NMW (the ‘NMWe’) when in UK waters. In certain circumstances, SHAs will be able to refuse harbour access to relevant shipping service operators.

Which seafarers should receive the NMWe when in UK waters?

Seafarers who are not entitled to NMW should receive the NMWe for time spent working in UK waters if:

·       The ship or hovercraft on which they work provides a service for the carriage of people or goods between the UK and overseas; and

·       That service calls at a UK port on at least 120 occasions over the course of a year (i.e., once every 72 hours on average).

However, services provided for the purposes of leisure or recreation, or by fishing vessels, are outside the scope of the Bill.

How will the NMWe be enforced?

Service operators who are within the scope of the Bill must, when requested to do so, declare to the relevant SHA that eligible seafarers will be paid a rate at least equal to NMW whilst in UK waters. If a statutory declaration is not provided when required, surcharges may be imposed on the service operator by the SHA and, in certain cases, the SHA can refuse access to ships where a surcharge has been imposed but not paid.

However, SHAs cannot refuse harbour access in cases of force majeure, or where there are overriding safety concerns, a need to reduce or minimise pollution, or a need to rectify deficiencies on the relevant ship. Service operators may also be required to provide information, and inspections may be carried out, to ensure that eligible seafarers are being paid in line with an NMWe declaration. Penalties may be imposed for failures to provide relevant information.

What happens now?

The Seafarers’ Wages Bill will enter its House of Lords Committee Stage on 15 September 2022 (as the Bill was introduced in the Lords, it will be considered by the House of Commons after its passage through the House of Lords has completed). Further details on the operation of the NMWe regime will be set out in regulations to be introduced by statutory instrument, which have yet to be published in draft.

Following Royal Assent, the substantive provisions of the then Seafarers’ Wages Act will come into force on such day or days as the Secretary of State for Transport may appoint. Service operators and SHAs will welcome further clarity on how the arrangements will work in practice, and confirmation on when the rules will be introduced, in due course.

In the meantime, relevant service operators should take steps to ensure their systems and processes can identify seafarers who are eligible to receive at least the NMWe when working in UK waters.