REDUNDANCY PAYMENTS EXCLUSION OF MERCHANT SEAMEN ORDER 1968 (Hansard, 17 July 1968)

§ LORD HUGHES

My Lords, I beg to move that the Redundancy Payments Exclusion of Merchant Seamen Order 1968, a copy of which was laid before the House on June 11, be approved. The direct effect of this Order is to exclude merchant seamen from the provisions of the Act. As a corollary, it enables the Secretary of State, under Section 31 of the Redundancy Payments Act, to make refunds of Redundancy Fund contributions to employers of excluded employees. The reason for making refunds under Section 31 of the Act conditional on exclusion under Section 16 is so that employers who, at substantial cost to themselves, have set up their own arrangements to deal with redundancy in their own industry, and have thereby eliminated the need for claims upon the Redundancy Fund, can, by this provision, be relieved of the burden of contributing to the statutory Scheme as well as financing their own arrangements.

A good example of this policy of exclusion and refund is provided by the docks industry. The National Docks Labour Board has a statutory duty to provide from a levy on port employers a weekly fall-back wage to registered dock workers when they terminate employment with an individual port employer. Registered dock workers cannot become redundant from the industry as a whole except by a reduction in the numbers registered, in which case compensation is normally agreed between both sides of industry.

The position in the Merchant Navy is somewhat similar. For many years now the shipping industry has had its own decasualisation scheme, known as the Merchant Navy Establishment Scheme, which provides payments in supplementation of unemployment benefit and, in suitable circumstances sickness benefit, to seamen temporarily unemployed between voyages. In the year ending March 31, 1968, this scheme cost shipping employers £797,000. Various improvements to individual contracts of service are being negotiated which will add at least £400,000 a year to this bill. Your Lordships will nevertheless appreciate that to 410 exclude any section of industry from participating in the benefits of an important social measure like the Redundancy Payments Act is a serious step. Such a step would not be contemplated by the Secretary of State unless she were satisfied that an exclusion order was desired by all sections of the industry.

My Lords, I am pleased to say that this condition is amply fulfilled. As long ago as December, 1965, the Department of Employment and Productivity was approached by the National Maritime Board, which is the joint negotiating body for the shipping industry and on which are represented the employers and the unions serving the various categories of seamen. The National Maritime Board submitted a draft redundancy scheme to be substituted for the statutory scheme when the exclusion order came into operation. Since Merchant Navy Establishment Benefit already covered the situation of the seaman who was unemployed between voyages but who still remained within the industry, this scheme was designed to deal with the seafarer who became redundant from the industry as a whole, bearing in mind that from the nature of their calling redundant seamen had particular difficulty in obtaining equally remunerative work ashore. The details of the scheme have been the subject of protracted negotiations and discussions, not only between the parties concerned, but also with the Depart bent of Employment and Productivity and the Board of Trade. The Confederation of British Industry and the T.U.C. have also been kept fully informed of the progress of the negotiations.

The finally agreed scheme is substantially more generous than the statutory provisions. For example, the statutory scheme imposes a maximum of 20 years' reckonable service, whereas the agreement allows 25 years' service to count; under the statutory scheme the weighting for age is limited to one and a half weeks' pay for each year of service over forty years, whereas the agreement additionally allows two weeks' pay for each year of service over 50; under the statutory scheme pay up to £40 a week is taken into account, but under the agreement this limit is raised to £50 a week. Moreover, all seagoing service, whether with one or more employers, is aggregated.

411 But, my Lords, neither employers nor employees are tied to the agreement for all time. It is provided that any of the organisations signatory to the agreement may terminate the agreement so far as that organisation is concerned provided six months' notice of intention is given. Your Lordships will of course appreciate that in the event of this happening the Secretary of State would wish to review the position regarding exclusion. She would also wish to review it if there were a substantial fall in the value of benefits provided under the agreement compared with the value of contributions refunded.

I must now draw your Lordships' attention to one other provision in the order. Article 3(2)(a) specifically excludes a merchant seaman who is neither domiciled nor has a place of residence in Great Britain. These seafarers, although outside the scope of the National Maritime Board Redundancy Agreement, are by definition unlikely to qualify for benefits under the statutory scheme, and it is therefore right that contributions paid on their behalf by employers should also be refunded. I beg to move.