Progress on the application of the national minimum wage for seafarers

Dear Colleagues,

Progress on the application of the National Minimum Wage for seafarers

Referring to my previous circular NP/152/11 dated 16th August 2011, I am writing to update shipping branches on the union’s ongoing campaign to enforce the National Minimum Wage for seafarers employed in UK territorial waters.

RMT has been involved in a concerted campaign for a decade to enforce the National Minimum Wage (NMW) for seafarers employed in UK territorial waters. The campaign started when we discovered that the international Safety at Sea Convention prevents the enforcement of the application of domestic NMW legislation on non-UK flagged ships trading between UK ports and overseas ports.

As a result of this RMT turned its attention to enforcement on all ships trading between UK ports or between UK ports and the UK offshore sector. Government lawyers argued that the rights to Innocent and Free Passage still prevented enforcement on foreign flagged ships where those ships sailed past the 12 mile territorial limit.

However, the union obtained legal advice from a maritime specialist who stated that enforcement probably was possible if a foreign flagged ship was sailing between UK ports or in the UK offshore sector. This culminated in the previous Government agreeing to set up a legal working group to establish the legal position as to whether any action could be taken on this matter or not.

Following the 2010 General Election, and further pressure from the RMT and the Parliamentary Group, the Coalition Government agreed that the working party should continue its work. The working party met again and produced a report arguing that it was possible to apply the NMW to all ships working between UK ports and the offshore sector, if it applied to the seafarers rather than the vessel (the in personam approach). The report was sent to Ministers in August 2011.

However, the Coalition Government’s secondary regulations (came into force 1st August 2011) under the Equality Act 2010 demonstrated the government’s determination not to remedy the injustice of pay discrimination, as the Department for Transport’s website clearly states:

To help ensure the competitiveness of the UK shipping industry the Regulations provide that it is not unlawful to offer to pay or pay different rates of pay to seafarers (applicants, employees and contract workers), other than those from EU, EEA or designated states, if a person applied for work as a seafarer or was recruited as a seafarer outside Great Britain. If the seafarer later becomes a British citizen or a national of another EU, EEA or designated state then the exception will no longer apply.

In June 2012, the government finally responded to the working party’s report. The response was contained in a larger document, produced by BIS rather than the DfT, updating policy guidance to HMRC on enforcement, prosecutions, and naming employers who flout NMW law. The government only responded on the point about application of NMW to individual seafarers, stating that:

“...the application of the NMW to seafarers should be made through an in personam approach. To ensure that the same approach is applied by compliance officers as would be applied by an employment tribunal, a compliance officer should enforce the NMW on behalf of a seafarer who ordinarily works in the UK.”

Factors in determining whether a seafarer ‘ordinarily works’ in the UK include:

· Where the seafarer’s tour of duty begins and ends;

· Where the seafarer pays income tax and NI contributions.

The BIS document states that nationality and flag are not likely to be relevant in determining whether a seafarer is entitled to the NMW.

Evidence of pay discrimination in the shipping and offshore sectors continues to mount, with new cases being regularly reported in the shipping press.

However, the biggest barrier to our campaigning in this area is the fact that those subject to the lower rates of pay are not RMT members and often cannot be persuaded to submit complaints. As with the case of the seafarer cited in a recent motion to the Shipping Committee from Liverpool Shipping Branch, the short term and insecure nature of contracts in the shipping industry illustrates that where we make initial progress with individual non-UK seafarers who may be inclined to register a formal complaint to HMRC on non-payment of NMW, the seafarer then finds work on a ship outside the UK and the link is broken.

The union is seeking a legal opinion on the application of the NMW on all forms of maritime journey from UK ports, covering all potential scenarios, such as flag, nationality etc. We hope to use this opinion, should it be favourable to make progress in the NMW campaign and in the broader campaigns against social dumping, as well as the one being fought through the ITF and with Nautilus against FOCs and POCs.

Following the negative answers received by the parliamentary group to questions on the number of complaints of non-payment of NMW that have been registered against shipping companies and the length of time taken in resolving these complaints, the union submitted an FOI request to HMRC for this information. The FOI request was submitted on 16th November and we await HMRC’s response.

We have also raised the issue of non-payment of the NMW as part of the Condor Ferries campaign, where Ukrainian seafarers are being paid £2.35 per hour. The following answer received on 29th October to a written question tabled by the Parliamentary Group confirms the government’s current thinking on NMW:

Katy Clark: To ask the Secretary of State for Business, Innovation and Skills whether all crew regardless of nationality who are working on a ship registered under a flag of convenience on routes between UK ports and (a) the Channel Islands and (b) France are subject to UK employment law.

Jo Swinson: UK case law has established the principle that a person with a sufficiently strong connection to the UK can take advantage of UK employment rights such as the minimum wage. Each case has to be considered on its individual facts.

UK employment rights may be enforced by an individual through an employment tribunal. In addition, certain employment rights such as the minimum wage are enforced by Government. The Pay and Work Rights helpline (0800 917 2368) provides a single point of access to Government enforcement bodies.

At a meeting of the TUC NMW Joint Enforcement Group on 14th November, RMT raised non-payment of the NMW in the maritime sector. HMRC officials responded that they considered problems around non-payment of NMW by shipping companies the result of a lack of awareness amongst seafarers. Whilst this implies that unions are partly responsible for that lack of awareness, it does point to a solution – namely that RMT ensure that the NMW helpline and other information is prominently displayed in the work place, especially on vessels where non-EEA seafarers are employed.

A guide to submitting a complaint about non-payment of the NMW is attached to this circular. Colleagues may want to adapt this for display in ships’ canteens or mess rooms, particularly if you work with non-EEA seafarers.

The campaign now aims to persuade a seafarer or group of seafarers being discriminated against in this way to take up Employment Tribunal cases over the non-payment of NMW. We are awaiting the outcome of further discussions between the ITF, Ukrainian trade union officials and the Ukrainian seafarers working for Condor, before we can look at taking up any of those cases at an ET and will continue to look for other examples, particularly on vessels where we have members.

I will continue to keep you updated on further developments in the campaign.

Yours Sincerely

Bob Crow,

General Secretary