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Clause 4

Volume 114: debated on Thursday 9 April 1987

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Employment Etc Of Authorised Pilots

I beg to move amendment No. 16, in page 5, line 24, after 'above', insert

'who is not already employed by it under such a contract'.
In a few ports, again in Orkney and Shetland, pilots are already directly employed by the harbour authority in its role as the pilotage authority. This amendment is to make it clear that where such arrangements exist, the authority is not obliged to make a fresh offer of employment or to upset existing arrangements.

I thank the Minister for this helpful amendment. It helps to clarify the position, as I understand the next two Government amendments do. This is something which could have been unclear and could have led to further difficulties, and we certainly welcome this clarification.

Amendment agreed to.

I beg to move amendment No. 17 in, page 5, line 28, leave out

'this subsection shall not apply'
and insert
'it need not do so'.

With this it will be convenient to take Government amendment No. 18.

The competent harbour authority will be obliged to offer direct employment to authorised pilots unless the pilots have decided that they need not do so —for instance, if they wish to be self-employed. But the pilots cannot prevent the competent harbour authority from employing them directly should the ports wish to do so. As the Bill stands, there has been some concern that, if pilots wish to be self-employed, ports will be obliged to accept that. The amendments make it clear that the ports merely have the option to accept self-employment or other arrangements.

Amendment agreed to.

Amendment made: No. 18, in page 5, line 30, leave out' this subsection shall not apply' and insert 'it need not do so'.

8 pm

I beg to move amendment No. 19, in age 5, line 30, at end insert—

'( ) Where by virtue of subsection (2) above a competent harbour authority is obliged to offer to employ any person, that offer shall be for not less than one year and shall in respect of remuneration and pension be no less favourable than those recommended immediately before the appointed day for the former pilotage district in which the harbour of the competent authority falls.'.
Amendment No. 19 contains two elements which I will deal with separately. The first is that the offer of employment under a contract of employment to be made under subsection 2 shall be for a period of
"not less than one year."
By tabling the amendment I am not attempting to circumvent clause 3(5), especially paragraphs (a) and (b) which, by and large, will only apply to exceptional cases. I acknowledge that the contract of employment is dependent upon a person being authorised. Should a person lose his authorisation for a proper reason, I accept that, subject to the satisfaction of the provisions of the Employment Protection (Consolidation) Act 1978, his contract of employment should be terminated.

The amendment is designed to allow pilots and other suitably qualified people with the potential to become pilots to make a commitment to pilotage in the new regimes that will come into existence on the appointed day. Those people are hardly likely to do that in the knowledge that they could be authorised under clause 3(1) and accept a contract of employment under clause 4(2) on one day and then, for whatever reason, have the authorisation revoked the next day and, as a consequence, have their contracts of employment terminated. That is not a climate conducive to encouraging the competent and efficient to remain in the profession or attract the right calibre of man into the profession in the future.

A similar amendment was tabled at the Committee stage in the House of Lords. In a debate on 9 December the Minister said:
"But I think that the suggestion of a fixed term which may be extended — and I emphasise the word 'may' — during which authorisations will remain in force is a helpful one, and the minimum period of one year would also help the pilots to plan ahead. But we had to think a little about the relationship to a pilot's contract of employment or other agreement with the CHA."—[Official Report, House of Lords, Public Bill Committee, 9 December 1986, c. 31.]
I could not agree more. Unfortunately on Report in another place on 12 February, the Minister said:
"On reflection, I am afraid I do not think that this would he desirable. In future a pilot's security about his future must rest on the terms of his agreement with the CHA" —[Official Report, House of Lords,12 February 1987, Vol. 484, c. 758.]
It is difficult to understand the change in attitude and equally how the results of "reflection" equate with the Government's promise to ensure the equitable treatment of the continuing pilot. That promise, I remind the Committee, was responsible for the pilots' qualified support for reform.

Secondly, the amendment contains provision to ensure that in financial terms pilots will receive not less than that to which — for a negotiated level of work — they are presently entitled. Reference has already been made to the fact that pilots have given their qualified support to reform on the basis of Government promises ensuring the equitable treatment of pilots. It may be appropriate to quote some of the references. The Green Paper "Marine Pilotage: A Consultative Document" published in December 1984 states in paragraph 8.1:
"The Government accept that the proposals in this paper will represent a fundamental change in the organisation of pilotage which entails an obligation to ensure that the existing members of the profession are treated fairly and equitably when the new policy is implemented."
In a letter to my hon. Friend the Member for Harwich (Sir J. Ridsdale) dated April 1986 my right hon. Friend the Prime Minister said:
"But in drawing up the new proposals the Government's aim will be to deal equitably with all those involved including in particular both the pilots who will be retiring and those who will be continuing."
In a letter to the chairman of the pilots national organisation, the United Kingdom Pilots Association (Marine) dated May 1986:
"I am satisfied too that what we propose will deal fairly with the members of your distinguished profession."
My right hon. Friend the Secretary of State for Transport in a speech to the pilots' annual conference in October 1986 said:
"Both I and the Minister for Shipping, Lord Brabazon, will do all we can to ease that transaction and to ensure that you get a fair deal."
Finally, the White Paper "Marine Pilotage: Legislative Proposals" published in November 1986 states in paragraph 41:
"The Government …is confident too that the legislation will provide a lasting basis for the future of Marine Pilotage while at the same time providing equitable treatment to the present and future members of a distinguished profession."
If' those guarantees are to be fulfilled, undertakings would have to be entered into through legislation or binding agreement. First, there would have to be guarantees that entry into the new regimes would be at an income level of not less than the present level of earnings and, in addition, that pension contributions would be maintained at the present level.

Secondly, continuing pilots should be deemed to have been employed since the date of the first licensing. Thirdly, there should be protection of pension rights, including the doubling up of years between the ages of 60 and 65 and the continuation of the enhanced early retirement scheme as an on-going benefit of the fund.

Finally, the provision of the lump sum compensation agreement should continue for a period of not less than, for example, 10 years. The amendment addresses only the first of those four matters.

It is interesting to note what the Pilotage Commission had to say in a submission to the Minister responsible for shipping on 6 June 1985. It stated that in any future reform pilotage service the Commission believed that
"Regard must be had to the fair treatment of the continuing pilots who should not be disadvantaged in respect of their overall service entitlements."
In a letter to Lord Brabazon, the Under-Secretary of State, dated 26 November 1986, the Pilotage Commission stated:
"You will recall that in commenting on the Green Paper the Commission stressed that Harbour Authorities should be required to employ pilots on fairly negotiated terms in respect of pay and conditions having regard to the pilots current recommended level of earnings and other entitlements. In this respect the Bill contains no safeguard to ensure the equitable treatment of pilots and I would wish to place on record the Commission's view as to the need for a suitably worded amendment to remedy this defect."
That point was picked up by Viscount Simon in Committee stage in the House of Lords. He said:
"We regard this as one of the most important amendments that we have to consider in this Bill, because the Government have given an assurance, I understand, in several forms to the pilots, that those who are at present licensed pilots and who wish to continue as authorised pilots under the new pilotage authorities will be fairly and equitably treated. That is something which I think the whole Committee would wish to see done. But there is nothing at all that I can see in the Bill which makes provision for this and that is why we have put the amendment down."
In reply, among other things, the Minister said:
"It is not unusual for legislation to provide that, where employees of one body are being transferred to a new employer, their level of earnings should be preserved. But in this case self-employed members of the profession are being offered employment."
However, the noble Lord Brightman had already said:
"I also support the spirit although not the form of the amendment … but an obligation to offer a contract of employment does not have any meaning as a matter of law, unless there is spelt out the terms on which that offer is to be made. I therefore ask: where in the Bill do we find the terms of the obligatory offer? What does the harbour authority have to do in order to fulfil its statutory obligations? Will any old offer do?

If nothing is spelt out as regards the ascertainment of the terms of the offer, which, by statute, the harbour authority will have to make, it seems to me that the obligation is really meaningless."—[Official Report, House of Lords, Public Bill Committee, 10 December 1986; c. 45–51.]
So much for the value of a contract of employment.

At this stage, nothing has yet been spelt out on the terms of the offer. In any case, are the pilots truly self employed? My right hon. Friend the Prime Minister obviously does not think so because in the letter to Mr. Wilkin, to which I referred, she stated:
"and in any case I think you will agree that, although pilots are treated as self employed for Inland Revenue purposes, the profession has few of the characteristics normally associated with self employment."
On Report, the Government introduced an amendment which is now clause 5 of the Bill. The clause is entitled:
"Temporary procedure for resolving disputes as to terms of employment".
In introducing the amendment, the Minister said:
"I made it plain, and I have made it plain again today, that I did not regard such a guarantee as justifiable, but I recognised that there was a feeling in the Committee that the provision about the offer of employment needed to be supplemented. Several noble Lords suggested that an arbitration procedure should be considered. These amendments set out such a procedure which I hope your Lordships will accept." —[Official Report, House of Lords, 12 February 1987; Vol. 39, c. 812.]
It has been made clear by the pilots that this is no substitute for Government guarantees, a fact that was conveyed to Lord Brabazon by Lord Underhill in a letter which stated:
"The main question however"—
it remains unanswered—
"is what is the Government proposing to insert in the Bill to carry out the many undertakings given to pilots on the conditions of service and benefits for continuing pilots."
On Third Reading in the House of Lords, the Minister referred at column 791 to the terms of the general guidance that the Secretary of State will give to the arbitration panel under clause 5(3) which he said should, if at all possible, be agreed in advance by both the pilots and the ports. He went on to say that the pilots and ports had already been able to agree on seven general considerations to which the panel would be required to have regard as appropriate in making its determinations while recognising that others may also need to be taken into account in some cases. It appears that the Government believe that they are fulfilling their promises and undertakings to the pilots by the institution of an arbitration panel which shall have to have regard "as it considers appropriate" to some general guidance notes provided by the Secretary of State. I suggest that any reasonable man can come to his own conclusions on whether that is the case. The pilots do not think so, nor do I.

The amendment is intended to assist the Government to fulfil part of their repeated promises to ensure the equitable treatment of the continuing pilots. The guarantees have been given successively by my right hon. Friend the Prime Minister, my right hon. Friend the Secretary of State, Lord Brabazon and my hon. Friend the Under-Secretary of State for Transport — the hon. Member for Worcestershire, South (Mr. Spicer) —hon Second Reading. I should like to hear from my hon. Friend the Under-Secretary of State how the Government proposes to deliver that commitment. Without such a provision in the Bill, the Government's promises will have been meaningless.

I have good deal of sympathy for the amendment. It states:

"a competent harbour authority is obliged to offer to employ any person".
Should not that obligation be extended to those who work on, say, pilot cutters and to those who do pilotage work within ports? I am sure that the Minister will acknowledge that I have given him notice, albeit just a few hours, of the questions that I should like to put to him and to put in the Official Report.

8.15 pm

Will the Minister give the Committee an assurance that the Bill's provisions will not have an adverse effect on the future employment of licensed river and dock pilots in the port of London and on those employed as licensed dock and harbour pilots in south Wales ports? I need hardly remind the Minister that those men have given excellent service over many years in meeting the needs of shipping in those ports. Is the Minister satisfied that the Bill's provisions for the future employment of and compensation for persons employed in the pilotage service, other than pilotage authority staff, will ensure that such persons are treated no less favourably than those employed by pilotage authorities?

My next question is important to ancillary employees. What criteria will the Pilotage Commission apply in carrying out its responsibilities under the Bill's provisions for the making of arrangements under schemes which will apply to employees as well — for example, pilot boat crews and others on the staff of the pilotage authorities? The amendment is concerned with the terms and conditions of employment of pilots, but the provisions need to be extended to those other employees. Will the Minister's officials give guidance to the Pilotage Commission to ensure that those employees are dealt with fairly and that the commission applies the same standards in making arrangements for a scheme for such employees as for pilotage authority staff?

The hon. Member for Crosby (Mr. Thornton) said that concern had been expressed in the other place about the need to treat pilots equitably. I wholeheartedly share that concern, but my concern extends to those who assist pilots to fulfil their responsibilities. The hon. Member for Crosby mentioned clause 5. Does clause 5 cover those employees and other persons in terms of arbitration? Their terms and conditions of employment must not be ignored by the Government or by the competent harbour authorities.

I listened with great interest to what the hon. Member for Crosby (Mr. Thornton) said in a long contribution on an important matter. The Bill's main thrust is clearly to change the procedure whereby pilots are employed. In general, it is reasonable for the Minister to say that when the Government actively seek by legislation to change the terms of reference of any person's employment, certain matters will be taken into account. Those points could be made in respect of steelmen, miners and many other people. I had hoped that Conservative Members would join us in making that point. This does not in any sense dilute what the hon. Member for Crosby said about the group of people whose terms of employment are being changed by an Act of Parliament. As legislators we must be sure that we are fair, just and equitable in the way in which we proceed.

I shall be interested to hear the Minister's reply to his hon. Friend, who made a very telling intervention. I have read the Bill from cover to cover, but I can find nothing to suggest that ancillary staff will have access to an arbitration tribunal if the terms of reference of their employment are altered as a consequence of the Bill. We are talking not only about a change to the pilotage service, but the effect that that will have on ancillary staff in the pilotage service—for example, those who are employed on pilot cutters. My hon. Friend the Member for Greenoch and Port Glasgow (Dr. Goodman) asked whether there is anything in the Bill that will benefit them in respect of an appeal to a tribunal. We are talking not only about pilots in the United Kingdom but about others who work on pilot cutters, who also have rights and contracts of employment. We should not lose sight of that fact when discussing changes in pilot employment contracts.

Like the rest of the Committee, I shall be interested to hear the Minister's reply on a very important and fundamental principle in the Bill.

There has been—certainly on Second Reading —consensus on the Bill and on a rationalisation of pilotage services in the United Kingdom. It is essential that Parliament, in taking this step, which will have such impact on the lives and employment prospects of so many people, should address the conditions that will affect the incomes of those people. The guidance note contains a provision which, if applied, could lead to fair and equitable treatment of pilots.

A distinction must be drawn between employees and those who are self-employed. Self-employment carries risks and uncertainties that are not always felt by employees who enjoy the full protection of employment legislation. The Secretary of State should also include it in his guidance note that when pilots become employed and are brought into the staff structure of competent harbour authorities, their remuneration will have effect and will be noted by other senior officers of the harbour authority.

I cannot claim any experience in negotiations, but one does not need to have that experience to observe that differentials in salaries often lead to conflict and difficulty in industrial relations. That should be borne in mind when new rates of remuneration are fixed. Throughout the passage of the Bill in the other place and in the time leading up to the presentation of the Bill, pilots have been given assurances that they will he treated fairly and reasonably and that principles of equity will apply. The hon. Member for Crosby (Mr. Thornton) is right to press the Government.

How many ancillary employees are employed by the Shetland pilotage authority?

I would have needed advance notice of that specific question. Perhaps I could write and tell the hon. Member.

We ask the Government to assure us that what they are proposing will be fair and reasonable. We ask the Minister to say whether there is any way in which the guidance notes can be made more binding on the arbitration panel. The guidance notes that have been agreed between the two sides of the industry will help to ensure some degree of fairness. Will the Minister tell us how they will become more binding on the panel?

My hon. Friend the Member for Crosby (Mr. Thornton), who quoted the Pilotage Commission and also my noble Friend Lord Brabazon, was being a little unfair because those quotations were taken from a point in the debate before we had agreed to the statutory arbitration procedures to be included in the Bill.

In answer to the question by the hon. Member for Greenock and Port Glasgow (Dr. Godman), supported by the hon. Member for Wigan (Mr. Stott), boat crews and other staff employed by the pilotage authorities will be included in the schemes under clause 24 and will be transferred to the employment of the appropriate competent harbour authority. If they are employed by a private company, they will not be included in the schemes because, unlike the pilotage authorities, the employees of private companies will not have been abolished, as it were. If the competent harbour authority decides to make changes in the arrangements for boat services which involve redundancy, the employer will have to meet his obligations in the normal way.

The only exemption or exception is where boat crews or other people are employed by the pilots themselves. In that case the Pilotage Commission will have discretion to include them in the winding-up scheme. We arc discussing these details at official level with the Pilotage Commission. So far as those who are employed by pilots are concerned, the Pilotage Commission will have discretion over the scheme that it puts forward.

The amendment is intended to require a competent harbour authority which employs pilots to guarantee rates of remuneration under the new arrangements. We do not agree that it is reasonable for pilots to have a cast-iron guarantee of this sort, because it would severely hamstring the ability of competent harbour authorities to negotiate sensible improvements in the efficiency of the service. The pilots' position is well protected by the arbitration provisions in clause 5. General guidance to the panel will be given by the Secretary of State, and representatives of pilots and the ports have agreed a list of considerations which, in their view, should constitute that advice.

Among the considerations are the pilots' past earnings, recommended and actual. The British Ports Association has indicated that it would be willing to include these considerations in agreed guidelines for the employment of pilots by port authorities. I have seen no evidence that the ports are seeking to press down levels of earnings or to get pilots' services on the cheap. Even if they were, the arbitration procedure amounts to considerable protection. The going rate of pay for a pilot will, I am sure, remain much as it is at present, but it is important that the competent harbour authorities should have the ability to negotiate with the pilots to see that in return there is an acceptable level of productivity in the port.

8.30 pm

It seems likely that most pilots will remain in the pilots' national pension fund. As that is a private pension fund, I do not believe that we should legislate to pre-empt the decisions of the managers. In any event, the British Ports Association, which, with the pilots, will he responsible for the fund under the new regime, has already given undertakings that current levels of benefit will be maintained, subject always to the financial position of the fund. Therefore, I ask my hon. Friend to withdraw the amendment.

I have listened carefully to what the Minister has said and I accept entirely his expression of good will. However, I must press the amendment to a Division because ministerial expressions of good will are not a bankable commodity for the future fair and equitable treatment of pilots. Therefore, I ask the Committee to support the amendment.

Question put,That the amendment be made:—

The Committee divided: Ayes 14, Noes 85.

Division No. 144]

[8.31 pm

AYES

Anderson, DonaldPrescott, John
Carlile, Alexander (Montg'y)Skinner, Dennis
Foot, Rt Hon MichaelStott, Roger
Golding, Mrs LlinTaylor, Matthew
Haynes, FrankWallace, James
Howells, Geraint
Hughes, Robert (Aberdeen N)Tellers for the Ayes:
Kirkwood, ArchyMr. Malcolm Thornton and Dr. Norman A. Godman.
Powell, Raymond (Ogmore)

NOES

Amess, DavidHordern, Sir Peter
Ancram, MichaelHowarth, Gerald (Cannock)
Arnold, TomHowell, Ralph (Norfolk, N)
Ashby, DavidJessel, Toby
Atkins, Rt Hon Sir H.Jones, Robert (Herts W)
Atkins, Robert (South Ribble)Kershaw, Sir Anthony
Baker, Nicholas (Dorset N)Lawrence, Ivan
Baldry, TonyLennox-Boyd, Hon Mark
Batiste, SpencerLloyd, Peter (Fareham)
Bellingham, HenryMcCrindle, Robert
Biggs-Davison, Sir JohnMalone, Gerald
Boscawen, Hon RobertMarlow, Antony
Bottomley, PeterMoate, Roger
Bowden, Gerald (Dulwich)Moynihan, Hon C.
Braine, Rt Hon Sir BernardNeubert, Michael
Bryan, Sir PaulNewton, Tony
Burt, AlistairNorris, Steven
Butterfill, JohnOnslow, Cranley
Chope, ChristopherPercival, Rt Hon Sir Ian
Clark, Hon A. (Plym'th S'n)Portillo, Michael
Colvin, MichaelPowley, John
Cope, JohnProctor, K. Harvey
Couchman, JamesRathbone, Tim
Dorrell, StephenRidsdale, Sir Julian
Durant, TonyRyder, Richard
Eyre, Sir ReginaldSainsbury, Hon Timothy
Fallon, MichaelSmith, Tim (Beaconsfield)
Favell, AnthonySpencer, Derek
Fenner, Dame PeggySpicer, Michael (S Worcs)
Forth, EricStanbrook, Ivor
Fox, Sir MarcusStern, Michael
Freeman, RogerStevens, Lewis (Nuneaton)
Goodhart, Sir PhilipTaylor, Teddy (S'end E)
Greenway, HarryThompson, Patrick (N'ich N)
Gregory, ConalTwinn, Dr Ian
Griffiths, Peter (Portsm'th N)Waddington, Rt Hon David
Ground, PatrickWakeham, Rt Hon John
Hamilton, Hon A. (Epsom)Wells, Bowen (Hertford)
Hampson, Dr KeithWheeler, John
Hargreaves, KennethWiggin, Jerry
Harris, David
Hawkins, Sir Paul (N'folk SW)Tellers for the Noes:
Heseltine, Rt Hon MichaelMr. Francis Maude and Mr. David Lightbown.
Hill, James
Hind, Kenneth

Question accordingly negatived.

I beg to move, amendment No. 21, in page 6, line 3, leave out subsection (4).

Subsection 4(4) states:
"A competent harbour authority may refuse to authorise any person who is not willing to provide his services as a pilot in accordance with the arrangements made for the provision of such services in its area."
Prior to Third Reading in the Lords, the subsection read:
"A competent harbour authority may refuse to authorise any person who is not willing to provide his services as a pilot in accordance with such arrangements as the authority considers appropriate under subsection (1) above."
That clause was so draconian as to be untrue. It effectively negated all the promises that were made by the Government that they would ensure the equitable treatment of pilots. It effectively nullified the intention of the newly introduced arbitration board.

In view of the statements that the Minister made in the last debate, I do not believe that this subsection, as redrafted, improves on that situation. It is clearly subordinate to subsection (1) of the clause, which states:
"Subject to subsection (2) below, a competent harbour authority may make such arrangements as it considers appropriate for the provision of the services of authorised pilots in the area in relation to which its duty under section 2(1) above is exercisable (whether under a contract of employment or a contract for services)."
I have underlined the important aspect to which subsection (4) clearly is subordinate—such arrangements as it considers appropriate for the provision of services. This amendment serves no useful purpose, in that the general terms in which the Bill is written do not impose a duty on any competent harbour authority to authorise any person it does not wish to.

I shall comment on this amendment in relation to the Minister's remarks in the last debate. He feels that the assurances that have been given are sufficient. Clearly the pilots do not. The guidelines that have been laid down, unless they are contained somewhere in the Bill or schedule, need to be more substantive than a ministerial assurance.

Nothing that I have heard tonight allays my fears that the pilots may find themselves unable to receive the sort of treatment which the Prime Minister, my right hon. Friend the Secretary of State, as well as the noble Lord, Lord Brabazon, promised that they would.

This amendment may remove the competent harbour authority's right to have the final say as to whether it will offer direct employment. Since that is fundamental to the Bill I must ask my hon. Friend to withdraw it, or we should resist it.

I have been puzzling over this amendment. I am an amateur and I do not understand the technicalities. However, it seems to me that this paragraph means that the authority that decides on qualifications of a professional pilot also decides whether he should be employed. If he is not willing to be employed by that authority, does that mean that he loses his qualifications to work as a pilot?

It is the authorisation that gives the pilot his status. It then becomes another matter as to whether he is given sufficient opportunity to be employed.

Amendment negatived.

Clause 4, as amended, ordered to stand part of the Bill.