My honourable friend the Parliamentary Under-Secretary of State for Transport (Paul Clark) has made the following Ministerial Statement.
Some three years ago, the European Commission informed the Government that it had received a complaint relating to Section 9 (s9) of the Race Relations Act 1976 (RRA 1976), which permits wage differentiation on the ground of nationality against a seafarer who was recruited abroad. We accept that this provision appears to be inconsistent with EC law, to the extent that it allows pay differentiation to the disadvantage of seafarers from other EC or EEA states or others with corresponding rights in EC law.
Additionally, the Commission has since raised concerns regarding Section 8 (s8) of the RRA 1976 in that it states that an employee working wholly outside Great Britain has to be ordinarily resident in Great Britain, in order to be protected from discrimination on racial grounds. The Commission views this as being unjustifiably indirectly discriminatory and contrary to Articles 39 EC and 7(1) of Regulation 1612/68 when applied to EC and EEA nationals and others with corresponding rights in EC law.
If enacted, the Equality Bill will bring together and restate the majority of existing domestic discrimination legislation including the RRA 1976. It therefore provides an opportunity to address both of the Commission’s concerns.
The Equality Bill is silent as to where it applies, so this will generally be for the courts and tribunals to determine. As far as the Part 5 (work) provisions are concerned, this approach is acceptable for most workers, who at any given time are within either the territory of the United Kingdom or some other territory. However, seafarers work on ships that may be constantly moving between waters under the jurisdiction of different States. Clause 78 of the Equality Bill therefore provides for Ministers to specify in regulations which seafarers on which ships, and which crew on which hovercraft, the employment provisions apply to. This enables Ministers to take account of international law and custom and the global practices of the shipping industry when deciding exactly how Part 5 is to apply to seafarers.
The regulation-making power in Clause 78 of the Bill is wide enough for the regulations to allow the differential pay practice to continue although, following the concerns raised by the European Commission regarding EC, EEA and other relevant seafarers, any replacement for Section 9 would have to take a more narrowly drawn form.
A key factor to consider before deciding whether to bring forward a more narrowly drawn replacement for Section 9 is the likely financial effect on industry of the different possible options.
Today, therefore, I am publishing draft regulations, which would be subject to the affirmative procedure in Parliament, showing how the Government currently propose that Part 5 of the Bill should apply to seafarers.
Regulations 3(1) and 4 of the draft regulations would apply the employment provisions of the Bill to every seafarer on a UK ship with a port of choice in Great Britain, so long as the seafarer either works at least partly in Great Britain, or is a UK or other EEA national (or has corresponding EC law rights) and has an employment relationship sufficiently linked to Great Britain. Regulation 3(2) would extend the employment provisions to ships flagged to other EEA countries while they are in UK waters, but only for the benefit of those seafarers who fulfil the criteria in regulation 3(3)(b) to (d).
Regulation 3(2) requires further work across Government before a final version of the regulations can be laid before Parliament for approval.
The draft regulations are currently silent on the issue of differential pay. If the regulations were made in the form of the published draft, the practice of nationality-based pay differentials would become unlawful. However, I have today written to a number of stakeholders seeking evidence-based financial estimates of the likely impact of either:
outlawing the practice altogether; or
continuing to allow the payment of differential rates to seafarers but only where such differentiation would not operate to the disadvantage of nationals of any EC or EEA state (or any other state whose nationals are entitled to corresponding rights under EC law) nor to that of seafarers recruited in Great Britain, and the difference in rates would correspond to a difference in the costs of living in the places where the seafarers respectively habitually reside.
Copies of the draft regulations have been placed in the Library of the House.
Once I have considered any responses submitted, I will report back to Parliament.