HC Deb 12 July 1973 vol 859 cc1928-42

10.38 p.m.

The Under-Secretary of State for Employment (Mr. Dudley Smith)

I beg to move, That the Redundancy Payments (Merchant Seamen Exclusion) Order 1973, a draft of which was laid before this House on 11th June, be approved. I do not think that the order need detain the House for long. Its purpose is to prevent a possible anomaly effecting the entitlement of merchant seamen to payments under the Redundancy Payments Act 1965. It is non-controversial. I know that the hon. Member for Kingston upon Hull, East (Mr. Prescott) wishes to raise a number of points which I will endeavour to deal with later.

In 1968 an order was made after full consultation with the shipping industry to exclude merchant seamen from the statutory scheme where their service is covered by a voluntary redundancy payment scheme agreed by the industry. In one respect the criterion of exclusion in the 1968 order has been found to be too wide. Service was excluded if it was under articles requiring the observance of the National Maritime Board's terms and conditions of employment.

The articles have been used by some employers who are under no obligation to participate in the industry's redundancy payment scheme. The obligation to participate arises only where the employer is a member of an organisation affiliated to the National Maritime Board. Consequently some merchant seamen might be excluded from the statutory scheme even though their service was not covered by the industry's scheme. The board has asked for the order to be amended to close any possible gap and it seems to me a sensible step to take.

The order seeks to remedy this anomaly by excluding service under articles or, from 1st January last, under crew agreements applying the National Maritime Board's terms and conditions, but only where the service is in a ship covered by the employer's membership of an organisation affiliated to the National Maritime Board. This is a comparatively narrow point, but I agree that it is important because it affects a fair number of men who serve in the merchant service and it is right and proper that this should have been called to the attention of the Government of the day so that an adjustment may be made. I hope, therefore, that the House will feel able to approve the order.

10.42 p.m.

Mr. John Prescott (Kingston upon Hull, East)

The Opposition do not intend to oppose the order but I take this opportunity to highlight some of the problems and seek a number of assurances and, perhaps, changes that the Minister might be prepared to consider. We do not want to delay the House but this matter is an important and a contentious one in the merchant service. We are here discussing yet another regulation concerning exclusion of the Merchant Shipping Acts only five or six years after the original order was made containing the defects outlined by the Minister.

The 1968 order was inadequate to achieve the objective set for it. As a result some British seamen on British-registered vessels were not paid anything when made redundant by the company employing them. The company, however, was able to recover from the State the contributions it had made towards the redundancy scheme. The company drew the benefits yet the seamen were denied payment because of the exclusion order which was supposed to guarantee some form of payment.

This matter of redundancy benefits is highly controversial as is shown by the considerable struggle which has ensued between the trade unions and the owners about whether a special redundancy scheme should be provided to take account of the special circumstances of the industry. Clearly the original redundancy legislation to which the order was directed denied benefits to seamen primarily because of the circumstances of their occupation, which are that because they sign the articles of agreement, or, latterly, the crew agreement, they are employed for a period of less than two years, the minimum qualifying period for redundancy pay.

Some seamen—after as much as 20 or 30 years service—were unable to claim redundancy pay because they were returned to the merchant navy pool—what is known ashore as the Labour Exchange—and therefore while employment with that company had terminated they were considered to have been offered alternative employment by the pool labour system and their claim for redundancy pay was rejected.

These industrial issues created consternation, and led to both the unions and the companies asking for exemption from the Redundancy Payments Act. The Minister was very concerned with the Industrial Relations Act. I constantly argued that we were always considered in legislation to be exceptional to the legislation for ordinary workers and given special legislation, but when we pressed the Minister to exempt us from that Industrial Relations Act we were told that we were in the same position as every other worker. Tonight we are once again discussing one of the exemptions for the seamen as different from other industrial workers.

The 1968 order required that certain minimum criteria be observed before any Government could consider exclusion from the 1965 Act. My right hon. Friend the Member for Birmingham, Spark-brook (Mr. Hattersley) laid down those criteria on 18th June 1968. They are the same criteria about which we have to satisfy ourselves when we consider the order tonight. My right hon. Friend said: There are obvious minimum criteria by which exclusion should be judged. The first requirement is that the employers have set up at considerable cost to themselves redundancy arrangements. The second is that the individual arrangements should eliminate claims on the general redundancy fund. Third, the benefits should be at least comparable to those paid by the scheme."—[OFFICIAL REPORT, 18th June, 1968; Vol. 766, c. 1805.] With the opportunity to have a second order, which is most unusual, we can judge, against those criteria, just how effective the original order was. Perhaps that could reflect why we have certain worries about the order. It was clearly shown on payments calculated to be paid to a man made redundant on 11 weeks a year employment that the arrangements was improved, and that that criterion was satisfied. But although there has been a decline of 30,000 in the number of seamen in the past decade only about 150 have been made redundant, and their redundancy has cost the industry about £100,000. The criterion about claims on the State fund has been satisfied to the hilt. There were no claims on the State fund.

On the third point, about the scheme being of considerable cost to the employers, the figures are unfortunately secret and very difficult to obtain. I hope that the Minister will consider changing that. But what evidence we have, some of it taken from the yearly report to the House of the redundancy fund, it appears that, taking into account the money refunded to the industry under the order the industry benefited. Refunds not only in respect of seamen are recorded but also of dockers, share fishermen and others. There are other hon. Members from the port that I represent who concern themselves with fishing matters, especially conditions of employment, which I leave to them, perhaps wisely. I note that the hon. Member for Haltemprice (Mr. Wall) is not here tonight to further their interests.

It has been estimated that the companies have been saving over £250,000 a year in returned contributions up to 1971 as a result of having their own scheme. That is almost 90 per cent. of the contributions they have been paying to the State. Consequently, 10 per cent. had been used for paying redundancy benefits up to 1971.

The matter has caused considerable concern to the trade unions involved. If it is said that all industry must pay towards a social benefit, a redundancy fund, that fund is used for good social purpose. If it cannot because of the circumstances of the industry be granted to seamen for the reasons which I have given, clearly that money should be used for some other means to meet the differences which exist in the system so that money raised for social purposes is used for social ends.

Perhaps consideration of sick pay systems which the industry has now adopted is an example. The shipping industry has one of the highest death rates due to occupational deaths and one of the highest accident records in the country. The higher-than-shore average of people who die from diseases, accidents or who suffer from mental illness illustrates the stresses which the lads face who go away to sea. Therefore, we need considerably more data about the cash position in order to press for further financial provision to supplement the industry's new medical severance scheme.

It is important to know how much the industry saves so that we can legitimately argue that the money should be used in other directions. In passing, I mention that we have health and insurance contributions for owners who employ foreign seamen, but the owners are able to recoup those contributions. That makes foreign labour cheaper and it is more difficult for British labour to get jobs when foreign labour is made that much cheaper by payment of less social contributions.

It is the responsibility of the Department, which is concerned with the criteria on which this legislation is based, to ensure that the industry uses social contributions to social ends and that the money is not just put back into the kitty

It is relevant to quote the evidence given by the Department to the Statutory Instruments Committee when it was considering the Redundancy Payments (Exclusion of Merchant Seamen) Order, 1973. In evidence it was said: Indeed, that formulation in the 1968 Order was taken from the text of the industry's own redundancy scheme, and at that time had the approval of the industry; and those instructing me were assured by the industry at that time that that was a satisfactory and reasonably watertight formulation of the position. All too easily the industrial view is accepted. I should like to see the Department be a little more vigilant about some of the views and estimates given to it. This measure considerably tightens up one of the problems which arises when seamen on British ships are not covered by the scheme and if the owners are not a member of the National Maritime Board. That situation is covered by the new Redundancy Payments Order. The order makes it clear that if owners are not members of the National Maritime Board they shall belong to the State scheme. Those companies must pay their contributions to the State scheme. No one will be able to find a loophole as a result of the position being considerably tightened.

There are some further points which are causing some concern. There are seamen who will now come in the State scheme. If they are not under the industry's National Maritime Board's scheme they will be available to go into the State scheme. Is the Minister able to give us an idea how many seamen will be exempt from the board's scheme, or, to put the other side of the equation, how many seamen will be able to go into the State scheme? We must bear in mind that even if a company contributes to the board's scheme, if the company's vessel is below 200 tons it need pay no contribution.

Secondly, there is a problem about articles for those lads in the State scheme. Crew agreements last three or six months and it will now not be possible to meet the original requirement of the two-year accumulated period before they can become a claimant on the redundancy fund. It is possible that a company, facing the possibility of paying its 50 per cent. into the redundancy fund, could end the articles just before the redundancy period and opt out of its responsibility to paying in money.

If the man is to pursue his claim for unfair dismissal, as the Minister knows better than most because he drafted most of the laws on this matter, he must for two years have served in that employment. So he will be denied the right under the Industrial Relations Act to secure redress. The company indeed has a financial incentive to get rid of the man.

Thirdly, I understand that the appeals tribunal requires a seaman, before he makes a redundancy claim, to be employed for two years in his employment. This raises an issue of contract law. If the contract or article or crew agreement is freely entered into between employer and employee and at the end of a set period—say, six months—the articles automatically finish, is the employer forced to take back the man on the ship?

Finally, I wish to raise an important point involving the present industry scheme. It is relevant to the order which, unfortunately, does not correct it. One of the rights of the Act dealing with the question of redundancy concerns not only the benefits conferred but the guarantee of legal rights. If a man's claim for redundancy is turned down, he can go through various stages of appeal.

A case has been brought to my attention about which I know the industry is concerned. I am sure that something will be done about it. It is the responsibility of the Department to ensure that the legal right in question is passed into the industry scheme. The case concerns a constituent, not of mine, but of my right hon. Friend the Member for Huyton (Mr. Harold Wilson). I shall not go into the details, but I will send all the papers to the Minister so that he can make a proper assessment. However, everything I propose to say about the case is correct and I do not want to bore the House with the details.

The man in question, Mr. Noel McCormack, was employed on a vessel as a baker. In the merchant shipping service a baker is what we call an Appendix A man. He is not a registered seaman. People such as doctors, nurses, pursers and bakers are generally called Appendix A people; they are employees of the company. Mr. McCormack was employed by a passenger company which closed down its ships, and he was made redundant.

It is important to realise that if a seamen lives not in a port such as Liverpool but outside it he has to report to his employment exchange and not to the pool, which does the job on behalf of the exchange of allocating seamen to ships and dealing with unemployment benefit. Mr. McCormack reported to the employment exchange. He was made redundant in April 1970, and he remained unemployed until February 1971. He made a claim in November 1971 for redundancy pay. He failed to qualify under the industry scheme because he did not satisfy the criterion, namely, he did not for 12 weeks report himself available for work.

The labour exchange did not, as it has admitted, inform the pool. That was the mistake of the Department of Employment official and not of Mr. McCormack. That is a legal point which will have to be considered. He did not claim within 12 months, so he failed to qualify under the industry scheme. He appealed to the tribunal under the 1965 Act and his case was considered in London in February 1973. His appeal failed because the tribunal said that as he was a merchant seaman he was excluded from the provisions of the Act dealing with redundancy. Therefore, the industry scheme of appeal is less fair and the guarantees for the justification of the exclusion order have not been satisfied.

The industry disallowed this man. He appealed again to the higher authority and he was further disallowed. The industry scheme requires that if the employer and the trade union disagree about a redundancy claim the case goes to the National Maritime Board. If there is still disagreement the parties can come to the Department and be heard by a tribunal. However, if the trade union and the owners agree, the man is denied all effective right to go to a tribunal. If there is a point of law at issue, as in this case—namely, is the responsibility on the Department of Employment if it fails to notify the pool that the man was available for work in compliance with the Act?—it should be considered by a lawyer.

I hope that the Minister will press the industry to include this alternative appeal system, and ensure that seamen are guaranteed those minimum requirements laid down in the 1965 Redundancy Act in regard to appeal conditions.

The order will not create any opposition, but I have raised several doubts. I ask the Minister to consider the matters I have mentioned and approach the industry to make sure that those doubts on the appeals system are satisfied. Secondly, will he consider the redundancy claims of the non-State seamen—those who are no longer under the exclusion order and are excluded by the two-year requirements on unfair dismissal and redundancy. Thirdly, will he consider breaking down the redundancy fund into separate categories for dockers, share fishermen and seamen, so that an assessment can be made of the amount of money given back to the industry out of the appeals?

11.2 p.m.

Mr. Kevin McNamara (Kingston upon Hull, North)

I wish to draw to the Under-Secretary of State's attention some provisions of the order which exclude fishermen. Fishermen in Hull are prevented from receiving benefit either under the Redundancy Payments Act or under the Contracts of Employment Act. The order specifically exempts fishermen. I contend that orders of this nature exempting fishermen from the benefits of the Redundancy Payments Act should not be brought before the House.

I have taken up this matter in correspondence with the Minister of State. He summarised the position as follows: The difficulty about the casual nature of employment in the industry is that statutory payments are calculated on, among other things, the length of reckonable service with the employer … this usually means service with the last employer before redundancy dismissal; service with more than one employer can, however, be aggregated where there has been a transfer of the business or successive employing companies are ' associated' within the meaning of the Act. The Minister went on to explain how it was possible for parts of an industry or a whole industry which by reason of its nature are not covered by the Act to bring forward a scheme. We are discussing the provisions of such a scheme as it applies to merchant seamen.

A fisherman signs articles—a crew agreement—and at the end of his voyage he signs off. He might have a continuous crew agreement in the sense that he will make a number of trips. At the end he will sign off, have his rest and then try to get another vessel. It might well be that he goes on to the same trawler as he had been on before, or to a different trawler with a different owner. The overall effect is the same—that he does not have contiuous or reckonable service within the meaning of the Act.

This is particularly difficult for fishermen, for a number of reasons. While I do not dispute with my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) the arduous nature of the ordinary merchant seaman's job, I point out that the fisherman's job, working on open decks in gale force weather, perhaps harassed, although fortunately not at present, by Icelandic gunboats, having to bring gear aboard and to fish out, is difficult, dangerous, and arduous. There is a great number of accidents. We all remember with sadness the type of tragedy which occurred a number of years ago. Fortunately, through the work of both parties and both sides of the industry, they have averted those. Nevertheless, this is a dangerous job, where men work long hours and have a considerable number of accidents.

The overall result is that one may reach 40 or 45, and because of the casual nature of the industry not find employment again on trawlers. Because of the arduousness of the job, skippers looking for crews seek to get men from the register who are young or youngish, or middle-aged with a lot of experience. Once they are past 40 or 45, it is difficult for ordinary deck hands to get continuous employment on trawlers. One has only to look at unemployment in the fishing industry to realise that.

A man comes to a position in middle age where he has no regularity of employment and should, in all fairness, be declared redundant, but because there is no redundancy scheme in the fishing industry, he is excluded from proper provision for compensation for loss of employment and loss of wages—admittedy good wages at the moment but wages which have to be worked for very hard.

The Under-Secretary is probably aware that in a recent application for a wages increase by the Transport and General Workers' Union, my own union, to the Hull Fishing Vessel Owners Association, the union has asked for decasualisation of the industry and a proper system of redundancy payments, with appropriate protection, similar to that given to people in shore-based industry under the Contracts of Employment Act.

It may be, because of the nature of the negotiations, that it will be impossible to come to a proper agreement in the industry, and I therefore ask the Minister to give an undertaking, should the industry fail to come to an agreement on this terrible anomaly and the grave injustice done to fishermen on Humberside and everywhere else where there are distant and middle water vessels, that the Department will consider trying to bring the two sides together to work out a proper scheme to give social justice to the fishermen of our country.

11.10 p.m.

Mr. Dudley Smith

We have had two interesting contributions, including the usual erudite speech on Merchant Navy matters from the hon. Member for Kingston upon Hull, East (Mr. Prescott). I do not always agree with him, but he knows the subject very well and speaks fluently. He posed a number of questions, some of which I shall try to answer. If I do not cover them all, I hope he will excuse me. On other points I shall check up and be in touch with him. I am glad that the hon. Gentleman is not opposing the order and that he agrees that it is a great improvement. I agree that the 1968 order had its anomalies. I make no political point on this, but merely say that it was passed by a Labour Administration. All Governments and officials make mistakes from time to time. There was a loophole there which was not foreseen. This exemption will undoubtedly be helpful to those who work in the industry.

I have gone carefully into this matter in the last few days and I am of the opinion that the scheme is a very good and worth while one for the industry. Although it can be said that we always want something better, I think that by and large what has been done is appreciated.

One of the most important points made by the hon. Gentleman is related to the difficulty over the appeals procedure. Let me try to set the scene. My right hon. Friend's power under Section 16 of the Redundancy Payments Act to prescribe employments by order from the statutory scheme is a general power. Section 16 does not lay down any conditions on which he may exercise it, except the approval of the exclusion order by both Houses of Parliament. It is not necessary that there should be a voluntary scheme or that, if there is a scheme, it should include any particular provisions.

The requirement mentioned by the hon. Gentleman as to rights of appeal applies to schemes exempted under Section 11 of the Act. There is nothing in Section 16 to prevent exclusion on account of a voluntary scheme agreed by an industry and suited to its needs, as in the case of the merchant seamen. The scheme agreed by the industry provides for appeal to a sub-committee of the National Maritime Board in cases of dispute about entitlement to redundancy payments under that scheme. If the subcommittee is not able to reach agreement, the services of the industrial tribunals are available by agreement with the National Maritime Board to assist in a non-statutory capacity. It is true that if the sub-committee reaches agreement, the seamen at present have no automatic right of appeal to an independent tribunal or arbitrator outside the industry. I understand that the National Maritime Board is considering how this right might be given. My Department will be pleased to advise the National Maritime Board on this if it so wishes, and to discuss the various points raised by the hon. Gentleman on appeals procedure. I give an undertaking that I shall follow this up to see that this is done. I assure the hon. Gentleman that the point is well taken.

The hon. Gentleman's second point, on which he placed a great deal of emphasis, related to employment with different non-affiliated employers. We are not attempting in the order, which is fairly restricted, to deal with all the problems that arise from conditions of employment in the merchant shipping industry. There are many problems and the hon. Gentleman has spotlighted some of them. The aim of the order is to remedy an anomaly which was not seen before when the 1968 exclusion order was made as between existing statutory and voluntary redundancy payments schemes. There are no powers in the Act by which my right hon. Friend the Secretary of State can on his own initiative treat employment with separate employers as aggregated for the purpose of redundancy payments. On this point merchant seamen are only in the same position as workers in any employment ashore.

I accept that there is a tendency in merchant shipping for people to have a shorter-term engagement compared with work on shore. Employment with separate employers can be aggregated only if a scheme of redundancy payments is agreed in an industry and provides for aggregation, as does the National Maritime Board's scheme. The employment covered by the scheme can then be excluded from the statutory scheme under Section 16 of the Act or exempted under Section 11. We shall always be pleased to consider any proposals that may be made for schemes in the different sections of the industry that are outside the scope of the National Maritime Board's scheme. We shall treat with the utmost seriousness any proposals that may be made to us about it.

That leads me to the important point on unfair dismissal. The hon. Gentleman invested me with powers rather above myself by saying that I drafted most of the Industrial Relations Act. I began to understand some parts of it during our discussions on the Bill, but I am not a lawyer. Although it is an admirable Act, I believe that certainly piloting it through the House did require a great deal of legal knowledge. I do not intend to get controversial, because the debate has been on a reasonably high level so far.

I think the House will agree that one of the big successes of the Industrial Relations Act was the part dealing with unfair dismissal. It is true that where the articles of contract last less than two years there is no entitlement to appeal against unfair dismissal. But the Government—this is nothing new; I have mentioned it in speeches—are open to suggestions for amending the Act, and they have specifically under review the two-year period of qualification for appeal to an industrial tribunal against unfair dismissal.

The hon. Gentleman probably knows, as he was an active participant in our debates, that one of the main reasons for this two-year qualification was a feeling that there might be a sudden rush of cases. The two-year period was to allow those responsible time to get properly assembled and to deal with those cases. Therefore, it was felt that there should be some time inhibition to begin with. Again, that can be looked at, and I am sure that it will be considered.

The Government are aware of the feelings, which are not confined purely to this industry, about reduction of the qualifying period. I cannot anticipate events, but I should think that it is a likely bet that in due course this period will be reduced.

I cannot give the hon. Gentleman any exact figures about the numbers of merchant seamen who are covered or not covered by the order. However, I will check on this matter and get in touch with him if I can obtain the information. I understand that the National Maritime Board has no figures for the numbers of vessels outside the scope of the industry's scheme. However, we can look into this matter further. I will also look into the possibility of publishing the figures.

The hon. Gentleman chided the Government about being more vigilant in their approach to representations and blandishments from the industry and not merely accepting what is given. I think that we are pretty testy sometimes. We like to examine these matters fairly closely. We are not easily misled. The hon. Gentleman may feel that we sometimes accept these matters too easily when they come from his industry. He has now put us on our guard and we shall pay more heed, if we do not already, to the representations that we sometimes get from sections of the industry.

I listened with interest to the speech by the hon. Memeber for Kingston upon Hull, North, who always speaks with great knowledge of the fishing industry. Although fishermen are outside the scope of the order, as he knows, it was perfectly fair for him to raise the matter that he did because it is a concomitant problem. However, in this instance we are specifically dealing with merchant seamen and no other particular body. I have taken note of what the hon. Gentleman has said. Share fishermen are exempt from the Redundancy Payments Act. This is a big and important industry, as we know only too well from recent events that have been taking place particularly from the hon. Gentleman's home port. There are difficulties in delineation in the fishing industry, as my hon. Friend the Minister of State said in that fairly long letter that he sent to the hon. Gentleman earlier this year. Difficulties are made to be overcome, and I agree that there may be anomalies which should be looked at with care. The hon. Gentleman will appreciate that I cannot give a commitment on this, but I undertake to look closely at it and perhaps I can write to the hon. Gentleman or have a further word with him about it in due course.

Dame Irene Ward (Tynemouth)

Reference has been made to the fishermen of Hull, but this is important to the fishermen on the Tyne, so I, too, should like a letter.

Mr. Smith

I am always glad to oblige my hon. Friend. No one is more assiduous than she is in looking after the interests of those who work off and on the coast. Although I was addressing my remarks to the hon. Member for Kingston upon Hull, North I was including all fishermen because this is a large and important industry.

This is a small but somewhat technical order. It may present problems for those who have not studied the matter, but it points in the right direction. I appreciate the approach that the Opposition have adopted. The order has already passed through another place, and there is no further inhibition upon it. In those circumstances, I hope that it will help those who work in this industry.

Question put and agreed to.

Resolved, That the Redundancy Payments (Merchant Seamen Exclusion) Order 1973, a draft of which was laid before this House on 11th June, be approved.