New powers to oversee compliance with UK NMW rates on international vessels

Back in March 2022, a furore erupted over the mass redundancies by P&O Ferries of its workers and their replacement with an international crew on much lower wages.

Amidst all the calls for changes to prevent ‘fire and rehire’ tactics, the only relevant change to employment legislation to have made it onto the statute book so far is The Seafarers' Wages Act 2023 (SWA 2023), which came into force on 23 March 2023. 

Confusingly however, some of the main enforcement regulations have yet to come into force as they require a statutory instrument and thus far no date has been given by the secretary of state to introduce the delegated legislation.

Previously, the National Minimum Wage (NMW) applied to all seafarers on vessels on domestic UK routes, whether or not the vessels were UK registered and even if the seafarers were not ordinarily resident in the UK. However, the NMW did not apply to seafarers working on international routes unless their ship was registered in the UK and they were ordinarily resident in the UK.

The SWA 2023 seeks to address this omission and provides that seafarers working on ships that use UK ports at least 120 times a year are paid at a rate at least equivalent to the UK NMW for their work in UK waters. This applies irrespective of the ship's flag or the seafarers' nationality. To effect SWA 2023, harbour authorities will have the power to request that ship operators provide a declaration that their seafarers are paid at a rate at least equivalent to the NMW for their work in the UK or its territorial waters. Harbour authorities will also be able to charge operators who fail to provide such a declaration and can refuse access to the harbour in a case of non-compliance. The secretary of state for transport may appoint investigators from the Maritime and Coastguard Agency to verify that operators are complying.

So what impact will the SWA 2023 have? Given that anyone can track the movements of commercial vessels over 300 gross tonnage on an international voyage via an Automatic Identification System (AIS), it may be that specialist maritime trade unions decide to closely monitor vessels docking in UK ports to ensure compliance.  It is also another important area for business compliance teams to ensure they are getting right in relation to both their own vessels and those within their supply chains. Finally, given the high-profile exposure generated by the roll out of freeports across the UK, it is possible that these locations could receive the most scrutiny. Shoosmiths can provide assistance to businesses to ensure they are compliant from our specialist employment team and in respect of regulation, business crime and compliance.

Disclaimer

This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2024.

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