Supplementary written evidence from Professor Jason Chuah (MAR0017)

Minimum wage for Seafarers

  1. Seafarers working on British flagged vessels are entitled to the national minimum wage unless their employment is wholly outside the UK or the worker is not ordinarily resident in the UK. (s. 40 National Minimum Wage Act 1998)
  2. Any worker who is working or ordinarily works in (a) UK territorial waters or (b) in the UK sector of the continental shelf (essentially the UK Exclusive Economic Zone) shall be entitled to the national minimum wage. That is irrespective of the worker’s nationality or the employer’s place of incorporation. It follows that seafarers employed on both UK and foreign flagged ships serving routes in UK territorial sea would be entitled to the NMG. (art 2 National Minimum Wage (Offshore Employment) Order 1999)
  3. However, the law in (2) above does not apply where the individual was “employed for the purposes of activities on a ship exercising the right of innocent passage or the right of transit passage”. (art 2 National Minimum Wage (Offshore Employment) Order 1999 as amended in 2020)
  4. The net results appear to be:
    1. Seafarers working on any British flagged vessel will be entitled to the NMW unless they are working wholly outside the UK.
    2. Any seafarers working in UK territorial waters (eg. on a route between England and Northern Ireland) would be entitled to the NMW.
    3. Seafarers working on a vessel passing through UK waters en route from the US to Sweden, for example, would be excluded from the NMW entitlement as the ship is exercising its international law of the sea rights. The exclusion will apply even if the ship were to trans-ship at a UK port.
    4. Seafarers working on a route, say, between England and France might not be entitled to the NMW because they work in and out of UK waters (territorial sea and the UK sector of the continental shelf). Two problems:
      1. It might be arguable that as a ferry worker ordinarily works in UK territory they should be entitled to the NMW. The term “ordinarily works” in this context however has not been tested in the courts. Clarifying this term by an Order could be a solution.
      2. It is not entirely clear that the NMW would only relate to those hours of work within UK waters and when the ship is outside UK waters, the pay could be different.
  5. Changing the law to extend the NMW to seafarers (especially if not British subjects) working outside UK waters is to give UK employment law extraterritorial effect. This is controversial as it is sometimes interpreted by flag states and other coastal states as the UK (being the port state) encroaching on their sovereignty. That however is not to say that it has not been done before.
  6. I am also concerned that it’s one thing conferring the employee extraterritorial rights which they can claim compensation for in the event of a breach. It is quite another to apply criminal and/or civil sanctions on foreign employers for breaches of NMW laws alleged to have been committed outside UK territory.
  7. As to sanctions, the Department for Transport’s proposal to empower the harbour master to deny entry to vessels, British or foreign flagged, is problematic. There is no clear legal precedent for denial of port access on the basis of employment rights. The closest shipping example is in EU law where port states in the EU (including the UK for now as a result of retained EU law) can deny exit of any vessel which is in breach of working time for seafarers. However, in practical terms that merely means that once the seafarers who had been overworked have been properly rested, the “deficiency” would be deemed to have been resolved and the ship should then be allowed to leave. Port entry has been refused usually on health and safety grounds – for example, a ship infected with a dangerous organism or a ship carrying hazardous materials in peril of sinking. It is also arguable that even in the working hours directive example above, the justification for denial of exit was premised on health and safety reasons. However, for failing to pay the minimum wage would be inconsistent with existing international norms.
  8. As to the suggestion to establish national minimum wage corridors with neighbouring states, there is a risk of a conflict of enforcement jurisdictions. Will both states have enforcement powers and jurisdiction, and to what extent? We should also think about how to address different levels of the minimum wage between the states. It is conceivable that a British seafarer working exclusively in UK waters might end up being paid less than their colleague who work in an international route, and vice versa.

 

April 2022