National Minimum Wage (Offshore Employment) (Amendment) Order 2020 — House of Lords, 2020-06-25
Topic: Labor
James Younger (Conservative, Centre-right): My Lords, this draft order amends Article 2 of the National Minimum Wage (Offshore Employment) Order 1999, known as the 1999 order, and will extend the provisions of the National Minimum Wage Act 1998, known as the Act, to seafarers working domestically in UK territorial waters or in connection with offshore activities in the UK sector of the continental shelf. The amended order will not, however, apply the provisions of the Act to seafarers employed on a ship which is exercising the right of innocent passage or the right of transit passage, which I will explain It is clear that the current provisions do not go far enough to enable the minimum wage to be paid to most seafarers working domestically. This draft order has come about following a significant amount of engagement and consultation. The background is that in 2017, a working group encompassing government and industry was formed to explore this issue, which had been an area of significant interest for more than a decade. The working group was chaired by the Department for Transport, with policy and legal representation from interested government departments: BEIS, the Foreign and Commonwealth Office, and HMRC. The working group also included the maritime unions—the RMT and Nautilus International—plus the UK Chamber of Shipping and representatives from individual shipping companies. It met formally three times over nine months and was preceded and succeeded by other dialogue with industry and unions. This measure has also been considered, and is supported, by the Maritime and Coastguard Agency The result was that this group recommended that the existing legislation should be amended to extend the eligibility of the minimum wage to all seafarers working domestically in UK territorial waters, on the UK continental shelf or in the UK’s exclusive economic zone. This order seeks to implement those recommendations as far as they apply to the UK continental shelf I have referred to several concepts as they are defined in the 1982 United Nations Convention on the Law of the Sea—UNCLOS—and will give some further explanation. The continental shelf of a coastal state comprises the seabed and subsoil of the submarine areas that extend beyond its territorial sea to the outer edge of the continental margin. Where the outer edge is beyond 200 nautical miles, it shall not exceed 350 nautical miles. The coastal state has sovereign rights to explore or exploit the natural resources of the seabed or subsoil. The exclusive economic zone is related but does not extend beyond 200 nautical miles. The coastal state has sovereign rights to explore or exploit, conserve or manage the natural resources—whether mineral or living—within the sea, the seabed or its subsoil, and the area above the sea. In simple terms, the continental shelf could be considered with regard to oil and gas and the EEZ with regard to fishing and renewable energy UNCLOS defines a vessel’s passage through a state’s territorial sea as being innocent if it is not prejudicial to the peace, good order or security of the coastal state. The word "passage" means navigation through the territorial sea for the purpose of traversing that sea without entering internal waters, calling at a roadstead or port facility outside internal waters, proceeding to or from internal waters, or a call at such a roadstead or port facility. Transit passage means the exercise of the freedom of navigation and overflight solely for the purpose of continuous and expeditious transit of the strait between one part of the high seas and another, or between exclusive economic zones We expect this order to benefit primarily seafarers in non-officer roles, such as ratings. These are a broad range of semi-skilled to skilled roles that cover a range of activities on board a vessel, whether on or below deck, in technical areas or in providing onboard services. Industry has stated that many seafarers working domestically in the UK or supporting the UK offshore sector are paid at or above minimum wage. We therefore think that it will be a relatively minor cost to industry when compared with other recent regulatory measures such as the sulphur emission measures. It is expected that the cost to industry will be approximately £3.2 million a year However, that should not diminish the importance of this measure. We are aware that other states are also seeking to improve standards for seafarers, but minimum salary for seafarers is not legislated for internationally or at a European level, so I am very pleased that it is understood that the UK will be the first country to provide such explicit protection to all seafarers working domestically. The ILO’s Maritime Labour Convention sets out that ratifying states should seek continuous improvement to the rights for seafarers, and this is exactly what the UK is doing I will provide a little more detail. Section 1 of the Act provides for the national minimum wage to be paid to individuals who, under their contracts and subject to other requirements of the Act, are working, or ordinarily work, in the UK. Specific provision about employment outside the UK is made by Section 40 of the Act and by the 1999 order that was made under Section 42. There is currently a wide exception in Article 2(2) and (3) of the 1999 order; that is, that the order does not apply the Act to individuals working on ships in the course of navigation, on fishing vessels, or on ships engaged in certain dredging activity. The amendments to the 1999 order will extend entitlement under that order to individuals working on vessels operating in UK territorial waters or, in connection with specified activities, in the UK sector of the continental shelf, subject only to an exception for employment for the purposes of activities on a ship exercising the right of innocent passage or the right of transit passage. The 1999 order is without prejudice to Section 40 of the Act, which operates in parallel and will continue to do so The 1999 order extends the Act to cover individuals who meet two conditions. The first condition is that they are in "offshore employment", as defined in Section 42(1). The second condition is that they are working, or ordinarily work, in UK territorial waters or the UK sector of the continental shelf In the interests of time, I will cover ferries in my closing remarks as I understand that noble Lords may raise questions on it. By happenstance, today is the Day of the Seafarer. This is an opportunity to recognise the invaluable contribution that seafarers make to international trade and the world economy, often at great personal cost to themselves and their families. It is not lost on me that we would be in a worse place today, during this crisis, if seafarers were not bringing vital supplies and goods to the UK. This country has a long history of leading on issues regarding the welfare and employment of seafarers, and I am pleased that this continues. I commend the draft order to the House.