Equality Act 2010 (Work on Ships and Hovercraft) Regulations 2011: post implementation review

Question 1

Introduction

Accepted Answer

This is a call for evidence to support a review of the application of the Equality Act 2010 (Work on Ships and Hovercraft) Regulations 2011 (the Regulations).^{[footnote 1]} The aim of this call for evidence is to gather evidence to inform the review required under regulation 6 of the Regulations. The review will then assess the effectiveness of the Regulations and determine whether they have achieved the objectives that prompted their introduction originally.

The review is also intended to assess whether those objectives remain appropriate and highlight any failings and any unintended consequences. Subject to the outcome of this call for evidence and the review, a recommendation may be made to keep, amend, repeal or replace the Regulations.

It is noted that a review of the Regulations should have been implemented in 2016 with another to follow in 2021. The vote to leave the EU made it difficult to consider a review of the regulations at the time due to the ongoing uncertainty around the future relationship between the UK and the EU and the additional work that resulted.

By the time that position had been made clearer, the country was then beset by the COVID-19 pandemic, followed by the invasion of Ukraine by Russia. All of which required reprioritisation of departmental resource. It is, therefore, acknowledged that this review is late.

This call for evidence is designed to enable participants to submit their views both on the effectiveness of the regulations as they stand as well as offering the opportunity to suggest amendments for the benefit of the shipping industry and those who work within it. The questions are therefore quite broad in scope to encourage engagement.

We, therefore, invite participants to submit evidence in as much detail as possible to enable us to conduct a rigorous analysis and thereby make sound recommendations. While we intend to take note of all suggestions and incorporate them into our analysis, any recommendations will be subject to constraints imposed by our international obligations. That is one aspect of belonging to the international maritime community that most of those who participate will be aware of, and which we as policymakers must take into account.

The review will also consider the judgment of the Employment Appeal Tribunal in the case of Walker v Wallem Ship Management Ltd.^{[footnote 2]} In that case it was decided that the Regulations did not protect the appellant against direct sex discrimination by an offshore employment service provider carrying out recruitment in England to work on foreign registered ships outside the UK.

The tribunal lacked jurisdiction because both the respondent and prospective work were based outside of the UK. The 3 members of the appeal tribunal noted in paragraph 41 that ‘the Secretary of State would be wise to revisit the scope of the 2011 Regulations.’

Thank you for engaging with us and for offering your evidence to this review.

Question 2

Legislative context

Accepted Answer

The Equality Act 2010 (the Act) formalised regulation in several areas to tackle the problems of potential discrimination in society. Part 5 of the Act focuses specifically on the area of work and provides a framework to prevent discrimination, harassment, victimisation and other unlawful conduct in the workplace in respect of protected characteristics.

The protected characteristics are:

age
disability
gender reassignment
marriage and civil partnership
pregnancy and maternity
race
religion or belief
sex
sexual orientation

The aim of Part 5 of the Act was to ensure that employees were treated fairly by employers while working in the UK.

Section 81 of the Equality Act 2010 states that Part 5 of the Act only applies to work on ships, work on hovercraft and seafarers in such circumstances as are prescribed in regulations. The 2011 regulations prescribe those circumstances, specifying to which seafarers, working on which ships, operating in which waters, Part 5 of the Act applies. The Regulations also make provision for different rates of pay for seafarers because of nationality if the seafarer applied for work or was recruited outside Great Britain and is not a British Citizen (as defined in the British Nationality Act 1981) or national of an EEA state or a designated state.^{[footnote 3]}

Before the Regulations came into force, the Race Relations Act 1976 provided that it was not unlawful for seafarers to be paid differently based on their nationality if they were recruited outside Great Britain. That included seafarers from EEA states and designated states. The European Commission investigated a complaint that UK law on differential pay for seafarers did not comply with European law and issued a reasoned opinion upholding that complaint. At the time the UK was a member of the EU and, therefore, risked infraction proceedings if conditions applied to UK seafarers were not also applied to those from the EU/EEA. It therefore proved necessary to take this into account when producing the Regulations.

The Regulations prescribe the circumstances in which Part 5 of the Act (work) applies to seafarers working on United Kingdom ships and hovercraft (regulations 3(1) and 4), or on EEA ships and hovercraft (regulation 3(2) and (3)). The Regulations provide that it is not unlawful to discriminate in relation to pay where a person applied for work as a seafarer outside Great Britain or was recruited as a seafarer outside Great Britain and is not a British Citizen or a national of an EEA State or designated state (regulation 5).

The Regulations require the Secretary of State to review the operation and effect of these Regulations and publish a report setting out the conclusions of that review within 5 years after they come into force and within every five years after that (regulation 6). The review will make a recommendation as to whether to keep, amend, repeal, or replace the Regulations.

The Regulations do not apply to Northern Ireland. However, similar provisions are provided for by Article 11 of the Race Relations (Northern Ireland) Order 1997 (as amended).

Question 3

Summary of previous evidence

Accepted Answer

Evidence provided by the UK Chamber of Shipping (UKCoS) at the time the Regulations were made, and included in the impact assessment, stated that to extend protections to seafarers from the EEA and designated states, the average percentage increase in wage costs, which range between 6% and 32% and would impact on a ship’s overall running costs by up to 7.2%. If it applied to all seafarers, the range would be an increase of 10% to 130% with the overall cost potentially as high as 56%.

The evidence provided suggested that the question of extending equal pay to seafarers working in the UK or on UK vessels was foremost in the minds of those responding to the initial request. There was a diversity of opinion ranging from support for an equal pay regime for all seafarers regardless of nationality to a view that shipping should be treated as an exception to Part 5 of the Act due to the international nature of the industry.

Given the diversity of opinion, the government commissioned an independent study chaired by Susan Carter (hereinafter referred to as the Carter Report)^{[footnote 4]} to analyse the findings of the consultation and make recommendations based on the following options.

option A: outlawing the practice of nationality-based pay differentials altogether
option B: 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 EU or EEA state (or any other state whose nationals are entitled to corresponding rights under EU law), nor that of seafarers recruited in Great Britain – the difference in rates would correspond to a difference in the costs of living in the places where the seafarers respectively habitually reside

The report, published in May 2010, noted that the evidence submitted on the economic impact on the shipping industry and the impact on the UK generally was in some respects ‘incomplete and conflicting’.

The report concluded in paragraphs 10.4 to 10.6:

The Department for Transport has accepted the need to outlaw differentials with respect to EU/EEA and designated states (option B) in order to comply with EU law. The issue is whether to go further and outlaw differentials altogether (option A), bringing the shipping industry in line with other industries. I could find no reason for making a special case for the shipping industry.

While Option A could involve significant short-term costs for some shipping companies, the immediate benefit would be ‘better outcomes for those who experience disadvantage’ as the Equality Act 2010 intends. In the long term, greater equality is expected to bring economic benefits.

On the basis of the evidence submitted, I recommend outlawing the practice of nationality-based pay differentials for seafarers altogether (option A).

The government chose option B which saw the principles applied to EU/EEA seafarers, plus those from designated states. While this was duly approved, on 27 June 2011, the Grand Committee questioned why the evidence provided by UKCoS was readily accepted when the Carter Report was not referenced in either the impact assessment or explanatory memorandum accompanying the Regulations and further questioned whether the report was considered.^{[footnote 5]}

Question 4

What this call for evidence seeks to achieve

Accepted Answer

The purpose of this call for evidence is to gather evidence to inform the review of the Regulations. In particular, the review will consider whether it remains appropriate for the protections in the Regulations to be extended to seafarers of EEA and designated states, now that the UK has left the EU, or whether the Regulations should be amended to narrow or broaden their scope.

The review has the potential to produce considerable change in the way in which seafarer employment issues are approached. It is therefore imperative that any arguments are supported by detailed evidence. The Carter Report attracted considerable comment and interest whether agreeing with its recommendations or not.

However, as already indicated above, the Report did suggest that the evidence provided was incomplete and conflicting in places. This call for evidence therefore intends to address the existing evidential concerns and provide the opportunity for interested parties to submit detailed and comprehensive evidence on whether the Regulations have met their objectives, and whether those objectives remain appropriate.

The aim of this call for evidence is to ensure that a recommendation can be made with the benefit of the strongest possible evidence, to ensure that it produces the best outcomes possible for seafarers, the maritime sector and the UK.

Question 5

Background to the questions

Accepted Answer

Regulation 3

Regulation 3 of the Equality Act 2010 (Work on Ships and Hovercraft) Regulations 2011) states:

3(1) Part 5 of the Act applies to a seafarer who works wholly or partly within Great Britain (including United Kingdom waters adjacent to Great Britain) if the seafarer is on:

a United Kingdom ship and the ship’s entry in the register maintained under section 8 of the Merchant Shipping Act 1995 specifies a port in Great Britain as the ship’s port of choice, or
a hovercraft registered in the United Kingdom and operated by a person whose principal place of business, or ordinary residence, is in Great Britain

3(2) Part 5 of the Act, except in relation to the protected characteristic of marriage and civil partnership, also applies to a seafarer who works wholly or partly within Great Britain (including United Kingdom waters adjacent to Great Britain) and who is on:

a ship registered in or entitled to fly the flag of an EEA State […]^{[footnote 6]}
a hovercraft registered in an EEA State […]^{[footnote 1]}

if paragraph (3) applies.

3(3) This paragraph applies if:

the ship or hovercraft is in United Kingdom waters adjacent to Great Britain
the seafarer is a British citizen or a national of an EEA State […]^{[footnote 1]} or of a designated state, and
the legal relationship of the seafarer’s employment is located within Great Britain or retains a sufficiently close link with Great Britain

Q1. To what extent do you think that Regulation 3 has succeeded in protecting the rights of UK seafarers, EEA seafarers or seafarers from other parts of the world?

Regulation 4

Regulation 4 of the Equality Act 2010 (Work on Ships and Hovercraft) Regulations 2011 states:

4(1) Part 5 of the Act applies to a seafarer who works wholly outside Great Britain and United Kingdom waters adjacent to Great Britain if the seafarer is on:

a United Kingdom ship and the ship’s entry in the register maintained under section 8 of the Merchant Shipping Act 1995 specifies a port in Great Britain as the ship’s port of choice, or
a hovercraft registered in the United Kingdom and operated by a person whose principal place of business, or ordinary residence, is in Great Britain

and paragraph (2) applies.

4(2) This paragraph applies if:

the seafarer is a British citizen or a national of an EEA State […]^{[footnote 7]} other than the United Kingdom or of a designated state
the legal relationship of the seafarer’s employment is located within Great Britain or retains a sufficiently close link with Great Britain

Q2. To what extent do you think that Regulation 4 has succeeded in protecting the rights of UK seafarers, EEA seafarers and seafarers from other parts of the world?

Q3. With regard to regulations 3 and 4, what, if any, amendments do you propose?

Regulation 3 and 4

Regulations 3 and 4 apply Part 5 of the Act to:

all seafarers, irrespective of nationality, who work onboard a UK registered ship which operates wholly or partly in Great Britain or adjacent waters, and
EEA/designated state seafarers where the legal relationship of their employment is located in (or closely linked to) Great Britain, working onboard an EEA-registered ship/hovercraft operating wholly or partly in Great Britain or adjacent waters (except in relation to the protected characteristic of marriage and civil partnership), and
EEA/designated state seafarers where the legal relationship of their employment is located in (or closely linked to) Great Britain, working onboard a UK-registered ship/hovercraft operating wholly outside of Great Britain and/or adjacent waters

The application of the Regulations to EEA/designated state seafarers, ships and hovercraft was as a result of the UK’s membership of the EU at the time they were made. The UK is no longer a member of the EU or EEA.

Designated states are states outside the EEA whose citizens are entitled to protection under EU law by virtue of association agreements with the EU. It should be noted that except for the Russian Federation, none of the designated states are considered major global labour-supplying states for seafarers.

Q3A. Further to any suggested amendments you may have offered in your answer to Q3, to what extent (if at all) do you think the scope of Regulations 3 and 4 should be amended now that the UK has left the EU, and how should this be applied to:

seafarers whether of UK, EEA/EU or other nationality?
to vessels (ships and hovercraft) whether registered in the UK, EU/EEA or elsewhere?

Regulation 5

Regulation 5 of the Equality Act 2010 (Work on Ships and Hovercraft) Regulations 2011 states:

It is not a contravention of section 39(1)(b) or (2)(a) or 41(1)(a) of the Act, as applied by regulations 3 and 4, for an employer or principal to offer to pay or to pay a person (A) at a lower rate than that at which the employer or principal offers to pay or pays another person (B) because A is of a different nationality from B, if:

A—
- applied for work as a seafarer, or
- was recruited as a seafarer, outside Great Britain, and
A is not—
- a British Citizen
- a national of [an]^{[footnote 8]} EEA State, or
- a national of a designated state

Regulation 5 provides that it is not unlawful to offer to pay or pay different rates of pay to seafarers, other than those from EEA or designated states if a person applied for work as a seafarer or was recruited as a seafarer outside Great Britain. The exclusion of EEA/designated state seafarers from differential pay was as a result of the UK’s membership of the EU at the time.

Q4. To what extent, if at all, do you believe this Regulation should continue to be applied and to which specific groups? Provide robust and verifiable supporting evidence and source data to support your position.

Q5. What would be the effect of omitting Regulation 5, retaining Regulation 5, and amending Regulation 5 on the conditions of employment of current and future UK seafarers?

Q6. What would be the effect of omitting Regulation 5, retaining Regulation 5, and amending Regulation 5 on the conditions of employment of current and future EEA/designated state seafarers?

Q7. What would be the effect of omitting Regulation 5, retaining Regulation 5, and amending Regulation 5 on the conditions of employment of current and future seafarers from the rest of the world?

Q8. If you have proposed an alternative for Regulation 5, what do you believe the effect will be on the decision on whether to employ current and future UK seafarers, seafarers from the EU/EEA, seafarers from designated states and where provided, seafarers from those states where you have suggested the Regulation should apply?

Further questions

In order that government is as well informed as possible about the outcomes of the existing legislation, we are asking you to address some additional questions to build the strongest possible evidence base for any decision taken.

Given that the UK has now left the EU and the world economy has been subjected to a pandemic and most recently war in Ukraine, the evidence supplied when the Regulations were drafted is now out of date.

Questions 9 to 14 ask for your opinions on the potential financial cost of implementation of this proposal both to individual shipping companies/groups and the wider economy.

Q9. What are the comparative pay rates for different ranks of seafarers within your organisation by nationality alone?

Q10. What jurisdiction applies to the employment of seafarers on your vessels?

Q11. What comparisons do you make in terms of pay and employment conditions for seafarers with those of other industries in an individual’s country of origin?

Q12. What account do you take of the cost of living in a particular seafarer’s normal base of operations as opposed to that of their country of origin?

Q13. To what extent are you aware of any unintended consequences that have resulted from the implementation of the Regulations?

Q13A. Further to any suggestions or comments you may have offered in your answer to question 13, what (if any) amendments do you consider should be made to specifically address the judgment in Walker v Wallem Ship Management Ltd?

Q14. What opportunities can you identify to reduce the burden on businesses, particularly smaller and medium-size businesses?

Question 6

How to respond

Accepted Answer

The call for evidence began on 19 April 2024 and will run until 11:59pm on 19 July 2024. Please ensure your response reaches us before the closing date.

The easiest way to respond is via the online questionnaire. You can find a link to the questionnaire in the Ways to respond section for this call for evidence.

If you cannot respond online, there is also a downloadable form and an email and postal address.

When responding, state whether you are responding as an individual or representing the views of an organisation. If responding on behalf of a larger organisation, make it clear who the organisation represents and, where applicable, how the views of members were assembled.

We do not expect you to submit evidence or views in response to every question listed if not applicable.

If you have any suggestions for others who may wish to be involved in this process, contact us.

Question 7

What will happen next

Accepted Answer

Once the call for evidence has closed, the review team will analyse the responses received. These will be included as part of the post-implementation review.

If you have questions about this call for evidence, contact:

Call for evidence on The Equality Act 2010 (Work on Ships and Hovercraft) Regulations 2011
Maritime PRSS Division
Maritime Directorate,
Department for Transport,
Zone 1-5, Floor 4,
Great Minster House,
33 Horseferry Road,
London, SW1P 4DR

Question 8

Freedom of information

Accepted Answer

Information provided in response to this call for evidence, including personal information, may be subject to publication or disclosure in accordance with the Freedom of Information Act 2000 (FOIA) or the Environmental Information Regulations 2004.

If you want information that you provide to be treated as confidential, please be aware that, under the FOIA, there is a statutory Code of Practice with which public authorities must comply and which deals, amongst other things, with obligations of confidence.

In view of this it would be helpful if you could explain to us why you regard the information you have provided as confidential. If we receive a request for disclosure of the information, we will take full account of your explanation, but we cannot give an assurance that confidentiality can be maintained in all circumstances.

An automatic confidentiality disclaimer generated by your IT system will not, of itself, be regarded as binding on the department. The department will process your personal data in accordance with the Data Protection Act (DPA) and in the majority of circumstances this will mean that your personal data will not be disclosed to third parties.

Question 9

Data protection

Accepted Answer

The Department for Transport is carrying out this call for evidence to gather evidence on these Regulations. This call for evidence and the processing of personal data that it entails is necessary for the exercise of our functions as a government department.

If your answers contain any information that allows you to be identified, the department will, under data protection law, be the Controller for this information. As part of this call for evidence process, we’re asking for your name and email address. This is in case we need to ask you follow-up questions about any of your responses. You do not have to give us this personal information. If you do provide it, we will use it only for the purpose of asking follow-up questions.

The department’s privacy policy has more information about your rights in relation to your personal data, how to complain and how to contact the Data Protection Officer. Your information will be kept securely on a secure IT system within the department and destroyed within 12 months after the consultation process has been completed.

Question 10

Full call for evidence questions

Accepted Answer

Q1. To what extent do you think that Regulation 3 has succeeded in protecting the rights of UK seafarers, EEA seafarers or seafarers from other parts of the world?

Q2. To what extent do you think that Regulation 4 has succeeded in protecting the rights of UK seafarers, EEA seafarers and seafarers from other parts of the world?

Q3. With regard to Regulations 3 and 4, what, if any, amendments do you propose?

Q3A. Further to any suggested amendments you may have offered in your answer to question 3, to what extent (if at all) do you think the scope of Regulations 3 and 4 should be amended now that the UK has left the EU, and how should this be applied to:

seafarers whether of UK, EEA/EU or other nationality?
to vessels (ships and hovercraft) whether registered in the UK, EU/EEA or elsewhere?