Numerical Index | Alphabetical Index

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History
Purpose
Background
Main Provisions
Glossary of terms
Endnotes
Contact Officer & Copyright Details

Passage History

 

Date Introduced: 9 December 1998

House: House of Representatives

Portfolio: Transport and Regional Services

Commencement: 28 days after Royal Assent

 

Purpose

To remove employment provisions from the Navigation Act 1912 (the Principal Act) that are inconsistent with the concept of company employment and with the aims of the Workplace Relations Act 1996.

Background

This Bill replaces the Navigation Amendment (Employment of Seafarers) Bill 1998 which was introduced into the House of Representatives on 25 June 1998 by the Minister for Workplace Relations and Small Business, Hon Peter Reith MP. The Bill was not debated and it lapsed when the election was called on 31 August 1998.

This Bill alters the way in which seafarers are employed on Australian ships. It follows one of the recommendations made in the report of the Shipping Reform Group appointed by the former Minister for Transport and Regional Development, Hon John Sharp MP, and chaired by Mr Julian Manser that:

The changes proposed by this Bill are part of a wide-ranging review of the Navigation Act 1912, foreshadowed by the Minister for Transport and Regional Services, Hon John Anderson MP, in his Second Reading Speech.(2)

How seafarers are employed under the Navigation Act 1912

The terms and conditions under which seafarers are employed on Australian ships are regulated by the Navigation Act 1912. Division 8 of Part II of the Act requires that all seafarers (other than officers) enter into an agreement with the master of the vessel on which they sail. The agreement which is prepared on a prescribed form, covers such matters as:

• the period of employment
• wages
• arrangements for allocation of wages
• arrangements for discharge of a seafarer.

Agreements may include any lawful provisions, including a code of conduct [sub section 47 (4A)], agreed between the master of a vessel and a seafarer, in addition to the provisions specified in the prescribed form [subsection 47(4)]. Officers working on Australian ships are not employed under 'articles of agreement'; instead, they have individual contracts with the owner of the vessel.

All seafarers employed on Australian-built ships operating on the Australian coast, or on ships imported into Australia, are required to be Australian residents or to have temporary visas. Visas may be issued for up to four years or as required, subject to the labour market tests under the Migration Act 1958. The Migration Act precludes foreign crew members from working in coastal waters without such visas.

Australian seafarers have been employed under an industry employment system known as the Seafarers Engagement System or 'the roster'. It was criticised by the Shipping Reform Group which stated that:

The Shipping Reform Group recommended the termination of the seafarers' engagement system and predicted that:

The Seafarers' Engagement System was a provision of Schedule X of the 1983 Maritime Industry Seagoing Award. However this award has subsequently been replaced by a streamlined award entitled the Maritime Industry Seagoing Award 1998. The new award specifies a number of employment provisions but does not specify the Seafarers' Engagement System.

Membership and Role of the Marine Council

The Marine Council is established under Section 424 of the Navigation Act 1912. Its membership consists of equal numbers of representatives of shipowners and seafarers together with an employee of the Australian Maritime Safety Authority (AMSA). The Minister appoints the members and the chairperson. It enquires into and reports to the Minister on any matter arising out of, or relating to, the Navigation Act which the Minister refers to the Council for advice [subsection 424(5)]. Its principal role is to assess the suitability of people for employment at sea [subsection 424(5A)]. Serious breaches of the Code of Conduct are referred to the Marine Council which considers the person's suitability for engagement as a seafarer. The Marine Council reports through the Australian Maritime Safety Authority's annual report.

Changes introduced by this legislation

• abolish the Marine Council
• remove the provisions that prohibit the demanding or receiving of a fee for providing a seafarer with employment (Item 9). When introducing the same Bill on 25 June 1998, the Minister for Workplace Relations and Small Business, Hon Peter Reith, said that:

• do away with 'articles of agreement' and replace them with company contracts between the employer and either individual seafarers, or the crew of the vessel as a whole. This will have the effect of treating officers and other seafarers in the same manner. Under company employment, the terms and conditions to apply to seafarers will be matters for negotiation between seafarers and their employers. The employer may be the owner of the vessel or a company specialising in providing crew for ships. Legislative underpinning for the new arrangements will be obtained through the Workplace Relations Act 1996.
• remove some existing terms and conditions of employment, including the provision entitling seafarers to paid sick leave ashore regardless of the cause of their illness. (Items 24-26). Other provisions to be removed include detailed procedures for the discharge of seafarers from service on a ship and methods for paying their wages. The Minister has indicated that such issues are matters for employers and seafarers to negotiate.
• allow crew to be used to clean ships' holds and move cargo in port. The Minister said in his Second Reading Speech that:

Features of company employment

In a speech to the Australian Chamber of Shipping on 6 November 1997, Minister Reith said that the introduction of company employment was a key factor in moving the Australian shipping industry into a more internationally competitive position. He listed some of the attributes which he believed company employment must have, namely:

• unfettered employer right to recruit from any source
• unfettered right of employers and employees to agree on the form of agreement whether collective or individual, union or non-union
• employer discretion to determine selection criteria, subject to meeting minimum mandatory qualification and medical standards
• the right to dismiss, subject to the law
• no scheme (industry-wide or sector specific) for payments to persons no longer employed by a company
• company responsibility for new entrant recruitment and training, subject to meeting any minimum mandatory industry standards
• company employment arrangements to be given effect by company-specific arrangements (ie no industry-wide arrangements/agreements), and
• open access by public, private and other recruitment and placement agencies to the seafarer employment market.(7)

Concerns expressed by the Maritime Union of Australia (MUA)

The MUA has expressed its concern about some of the changes proposed by this Bill. In particular it has highlighted that the changes would allow:

• manning agents to supply crew for Australian vessels
• ships' crew, including foreign crew engaged in overseas voyages, to load and unload cargo in Australian ports and
• crew to clean ships' ballast while in Australian ports.(8)

Of greatest concern is the move to allow manning agents, including foreign manning agents, to provide seafarers for Australian vessels. According to the National Secretary of the MUA, Mr John Coombs:

The MUA has argued that the changes proposed by this Bill may make it difficult for Australia to comply with some international conventions, in particular, the revised Convention on Standards of Training, Certification and Watchkeeping (STCW95), and ILO Convention 22 (Seamans Articles of Agreement Convention) which Australia has ratified.(10)

The MUA has also commented on the statement made by the Minister for Transport and Regional Services, Hon John Anderson MP, in his Second Reading Speech for this Bill, that abuses such as 'crimping' (demanding a fee from a seafarer for placing him or her in a job) were only relevant in the days of sailing ships.(11) The union refers to the recent report of the parliamentary inquiry into the 1996-97 Annual Report of the Australian Maritime Safety Authority which noted that:

In the submission which the MUA made to the House of Representatives Standing Committee on Communications, Transport and Microeconomic Reform in mid 1998, the union stated that the lifting of the prohibition on demanding a fee from seafarers in return for employment meant jobs could be filled on the basis of ability to pay rather than merit. They submitted that:

The MUA's submission also argued that the changes proposed to the Navigation Act 1912, which would allow manning agents to operate in Australia, could undermine safety standards. They stated that manning agents had little incentive to ensure that seafarers were well trained and the AMSA's ability independently to check training records of individual crew members would be difficult.(14) They expressed their concern that the abolition of the Marine Council, which has a role in monitoring seafarers' skills and behaviour, could pose problems in ensuring that crews are properly qualified.(15)

The Government has responded to the MUA by stating that:

• the proposed measures will not affect qualifications, competency and welfare of Australian seafarers(16)
• it will continue to be the responsibility of employers to ensure that their ships are crewed by properly qualified seafarers and it will still be an offence under section 16 of the Navigation Act for unqualified persons to perform duties of master, officer or seaman(17), and
• the Australian Maritime Safety Authority would still have the right to inspect evidence of qualifications.(18)

Reform of the Australian shipping industry

Shipping Reform Group

On 13 August 1996, the former Minister for Transport and Regional Development, Hon John Sharp MP, established the Shipping Reform Group. Its purpose was to provide a mechanism for consultation with the industry on winding back and eventually removing the cabotage restrictions on domestic shipping, and on the establishment of a Second Register for Australian shipping. (These terms are explained in the Glossary to this Digest.) The Shipping Reform Group (SRG) was under the chairmanship of Mr Julian Manser, Chief Executive of the Darwin based company Perkins Shipping Pty Ltd, and consisted of representatives of Mobil Oil Australia Ltd, BHP Ltd, the Australian Shipowners Association, National Bulk Commodities Group, Howard Smith Ltd, and ALOR Pty Ltd. Although there was no union or government representation on the SRG, a number of State government departments and agencies made submissions, as did the Maritime Union of Australia, the ACTU, and the Australian Institute of Marine and Power Engineers.

On 25 March 1997 the Shipping Reform Group presented a report to the Minister which addressed a number of issues in addition to the winding back of cabotage and the establishment of a Second Register. Four recommendations dealt with aspects of labour reform, namely:

• a move to company employment (Recommendation 2)
• reduction in seafarers' leave entitlements (Recommendation 3)
• abolition of the separate seafarers' workers compensation scheme (Recommendation 4), and
• provision for anticipated redundancies (Recommendation 5).(19)

In proposing a move to company employment, the report recommended that 'the (Seafarers') Engagement System should be terminated after company employment becomes widespread'.(20)

Earlier reforms of the Australian shipping industry

Reform of the Australian shipping industry has been a priority since the early 1980s with the implementation of the recommendations contained in the Report of the Committee on the Revitalisation of Australian Shipping, chaired by Sir John Crawford.(21) The principal objective of the reform strategy was to decrease the cost of sea transport by reducing the operating costs of Australian ships to within the range of other OECD ships with national crews.

The Maritime Industry Development Committee (MIDC) proposed changes to working practices on Australian ships that led to a further reduction in crew numbers on new ships. At the same time, shipowners were offered financial incentives for the construction of new ships and modifications to secondhand ships.(22) In April 1989 the Shipping Reform Task Force presented its report which included additional programs to reduce the number of crew on existing and new ships, including offers of voluntary early retirement and an expanded retraining program for seafarers. The Shipping Industry Reform Authority (SIRA) was set up for three years from 1 July 1989 to draw up detailed plans and to oversee the implementation of the reform strategy.

As a result of these changes, typical crew numbers on Australian ships had fallen from about 30 in 1984 to less than 21 in 1992.(23) Crew levels for new vessels was reduced to 18 and there had been a reduction of around 1000 in the maritime labour force.(24)

In April 1993 the former Government extended SIRA's reform program to September 1995. They undertook to contribute up to $25.3 million towards voluntary retirement packages and training. A Maritime Industry Restructuring Agreement (MIRA) was signed in September 1994. MIRA was industry funded and involved negotiations between shipowners and maritime unions in pursuit of further shipping reforms. A number of enterprise agreements were signed which reflected goals agreed during the MIRA process.

1999 Working Group

On 10 December 1998 the Minister for Transport and Regional Services, Hon John Anderson MP, announced the establishment of a working group, chaired by Mr Lachlan Payne of the Australian Shipowners Association, to assess progress in implementing the recommendations of the Shipping Reform Group. The working group has also been asked to look at the benefit to the economy of the Australian shipping industry, develop measures for monitoring labour and efficiency reforms such as enterprise employment, and examine support given to the shipping industries of other OECD countries and support provided to other Australian industries. The working group is to report to the Minister in March 1999.(25)

Characteristics of the Australian shipping industry

The Australian major trading fleet is small by international standards, comprising 62 ships over 2,000 deadweight tonnes as at 30 June 1997. This fleet comprises 42 coastal and 20 overseas vessels.(26) In addition there are a small number of foreign flagged vessels operating on the Australian coast either licensed under the Navigation Act 1912 or outside the jurisdiction of the Act (eg offshore industry, intra-State trade). There are also an unknown number of Australian owned or controlled ships on foreign registries which operate outside Australia. (The Australian Shipowners Association believes the figure may be in the order of 30 ships.(27))

The Australian international shipping task is large due to our being both a large island nation and a major exporter. However, the Australian fleet's participation in Australia's international trade is only around 3% by volume and 5% by value and has declined over the past decade.(28)

In the coastal trade shipping competes with road and rail transport. While coastal shipping accounted for only around 3% of the freight transport task on a tonnage carried basis, it handled around 30% of the transport task on a net tonnage kilometre basis in 1993 - a share similar to that handled by the road and rail freight industries. Of late, the market share of shipping (based on tonnes-kilometres) had declined from 52% in 1970 to 31% in 1993. (29)Nevertheless, Australia's reliance on coastal shipping is considerably above that of the United Kingdom (24%) and the USA (16%) but less than Japan (45%).(30)

The Australian shipping fleet performs a number of distinct tasks, namely:

• the dedicated coastal general cargo services, such as those provided across Bass Strait
• the extensive dedicated coastal dry bulk services (shipping in excess of 30 million tonnes)
• the movement of crude oil to refineries and bulk petroleum products from refineries in WA, SA, Victoria, NSW and Queensland to distribution centres around the Australian coast, together with some exports to the Asia/Pacific region and New Zealand
• the integrated international and coastal services such as those provided by BHP which transport iron ore from Port Hedland to Port Kembla and export coal from NSW and Queensland to ports in Japan, and
• the purely international services provided by ANL and Perkins Shipping.

The majority of the Australian coastal fleet (both by number of vessels and capacity) is used in the transport of bulk freight. Most of the bulk carriers are operated by users (eg BHP Transport and the petroleum companies) to service in-house needs such as the delivery of raw materials and the movement of intermediate products for further processing.

According to the Shipping Reform Group Report, the Australian shipping trade is unique in that many of the coastal routes involve very long distances which are able to be serviced efficiently by vessels designed for and used on international routes. Most other countries' fleets are divided between those vessels suited to either the coastal or international trading task but not both.(31)

The existence of a shipping industry provides Australia with a reservoir of skills able to be used in related areas such as maritime surveying, ship broking and management, safety inspection, port management, and provedoring (the provision of supplies for a ship). The Australian Maritime College provides specialist training for seafarers engaged in Australia's shipping and fishing industries.

Main Provisions

Amendments to the Navigation Act 1912

The Bill repeals approximately 50 sections and subsections containing detailed employment related provisions. In addition, it contains a number of consequential amendments required as a result of the provisions to be repealed, and in order to broaden the concept of an employment agreement so that it is consistent with the Workplace Relations Act 1996.

Agreement

Item 12 removes the requirement at section 46 of the Navigation Act for a seafarer to enter into a prescribed form of 'articles of agreement' with the master of the vessel. Item 5 substitutes a new definition of the agreement which both the master and the seafarer must enter into with their employer. The agreement may be between the employer and one other person, or between the employer and the entire crew of the ship.

Items 1, 2, 4, 8, 16, 20, 23, 30, 34, 35 and 39 are consequential amendments removing references to the detail of the content of the 'articles of agreement' and to the procedures by which they were completed. Under the amended Act the terms and conditions of employment will be matters for negotiation between the employer and the seafarers.

The Bill retains the requirement in section 46 of the Navigation Act that the owner shall not allow a ship to be taken to sea unless there is an agreement in force with the master and each seafarer on the ship.

Abolition of the Marine Council

Items 3, 13, 27 and 48 remove references to the Marine Council contained in subsection 6(1), and sections 47, 48, 138 and 424. For a discussion of the role and membership of the Marine Council, the reader is referred to the Background section of this Digest, at page 3.

Fees for the supply of seafarers

Item 9 repeals the prohibition on demanding or receiving remuneration for providing a seafarer with employment. This prohibition has been in the Principal Act since 1912. Repeal of Division 4 of Part II will allow shipowners to use ship management and crewing agents to recruit crew for Australian vessels.

Use of crew to handle cargo or ballast

Item 10 repeals Division 7 of Part II (section 45 of the Principal Act) which prohibits the use of ship's crew to handle cargo or ballast while a vessel is in an Australian port. This point is discussed on pages 4 and 5 of the Background section of this Digest.

Changes to the procedures for discharging seafarers and the methods of paying their wages

Items 14, 17, 21, 22, 36, 40 and 41 remove references to the procedures for discharging seafarers at the end of their contract. Item 14 repeals section 50 which places a limit of 6 months on the length of a seafarer's engagement and requires a shipowner to pay the cost of returning a seafarer to his or her agreed return port. Item 17 repeals Division 9 (Discharge of Seamen). The Government has stated that in future the employer will be required to provide, on request, a statement of service to a master or seaman who is employed or has been employed by that employer. The statement is for the purposes of assessing the nature and extent of a seafarer's service in order to comply with the safety requirements of the International Maritime Organization's Convention on the Standards of Training, Certification and Watchkeeping. In his Second Reading Speech, the Minister said that these matters will in future be covered by Marine Orders made under section 15 of the Navigation Act 1912.

Items 18, 19 and 32 deal with the payment of wages to seafarers. Item 19 repeals section 84 which provides that the amount of a seafarer's wages shall not depend on how much the owner is paid for the freight that is carried. The Minister has said that arrangements for paying wages to seafarers are matters that should be covered under company employment. In future the payment of wages will be subject to the same laws, awards and agreements which apply to other industries in Australia.

The Act retains in section 85 the rights of masters and seafarers to wages and repatriation to their home port if the ship on which they are employed is lost or wrecked, or if the owner or operator goes bankrupt during the voyage. Items 24, 25, and 26 repeal sections dealing with the wages of seamen left on shore sick or injured, while continuing to require the owner of the vessel, if requested by a proper authority, to deposit a sum as security for the expenses and wages of a seaman left behind (section 132A).

Other amendments

Item 15 removes the requirement for an owner or master to notify the Australian Maritime Safety Authority of changes of crew on a ship. However, for safety purposes section 52 retains the requirement that owners or masters must provide AMSA with details of the crew on a ship when requested. This information could be needed to help in dealing with an emergency situation on a ship or for assessing if a ship is adequately crewed.

Item 42 removes the historical anachronism that where a library is provided for the use of passengers, crew members have access to that library (if there is no separate crew library) on the same conditions as passengers. The requirement that the crew has access to a library has been in the Principal Act since 1912.

Item 47 amends the range of issues on which an application can be made to the Administrative Appeals Tribunal. The issues concern employment provisions repealed by this Bill.

Amendments to the Occupational Health and Safety (Maritime Industry) Act 1993

There are two consequential amendments. Item 1 repeals the definition of 'articles of agreement' because these are no longer required under the Navigation Act 1912. Item 2 substitutes an amended definition of an 'employee' which does not include a reference to 'articles of agreement'.

Glossary of terms

AMSA Australian Maritime Safety Authority, established by the Australian Maritime Safety Authority Act 1990.

Cabotage In the maritime sense, cabotage refers to the practice of limiting access to a country's coastal trade to national shipping operators or national flag vessels with national crews.

Coasting trade is the carriage of domestic passengers and/or cargoes. It is defined by Part VI of the Navigation Act 1912. To engage in the coasting trade vessels must have either a license or a permit.

Flag indicates the national authority with which a ship is officially registered.

Flags of convenience The process of shipowner registering ships with countries that operate national fleets tax free or virtually tax free such as Liberia or Panama.

Major Trading Fleet includes vessels of 2000 deadweight tonnes or more.

MIRA Maritime Industry Restructuring Agreement, signed in September 1994. MIRA was funded by industry and involved negotiations between shipowners and maritime unions, aimed at further shipping reforms.

Second Register Second registers are additional to the principal national shipping registers and have fewer restrictions, including reduced corporate and personal taxation requirements and allowing the employment of non-national crews. The intention is to create an environment in which national shipping can be competitive with the open registers of such countries as Liberia and Panama.(32)

SIRA. Shipping Industry Reform Authority, established for three years from 1 July 1989. It prepared a report entitled Shipping reform: past, present, future in 1992.

SRG. Shipping Reform Group. Set up in 1996 and chaired by Mr Julian Manser. It presented its report, A framework for reform of Australian shipping, in March 1997.

SVPs or CVPs. Single or Continuing Voyage Permits. These are permits issued by the Minister when he is satisfied that it is in the public interest to allow an unlicensed ship to engage in the coasting trade. They are issued where there is no licensed ship available for the service, or where the service as carried out by a licensed ship or ships is inadequate to the needs of particular ports.

 

Endnotes

1. A framework for reform of Australian shipping, report by the Shipping Reform Group (Chairman: Julian Manser), AGPS, 1997, p. 8. This is Recommendation 2 - 'Company Employment'.

2. Navigation Amendment (Employment of Seafarers) Bill 1998, Second Reading Speech, Hon John Anderson MP, House of Representatives, Debates, 9 December 1998, p. 1657.

3. A framework for reform of Australian shipping, op. cit., p. 26.

4. ibid., p. 26.

5. Navigation Amendment (Employment of Seafarers) Bill 1998, Second Reading Speech, Hon Peter Reith MP, House of Representatives, Debates, 25 June 1998, p. 5371.

6. Navigation Amendment (Employment of Seafarers) Bill 1998, Second Reading Speech, Hon John Anderson MP, House of Representatives, Debates, 9 December 1998, p. 1658.

7. 'Speech to Australian Chamber of Shipping, Sydney, 6 November 1997', Hon Peter Reith MP, Press Release, Minister for Workplace Relations and Small Business, 6 November 1997, p. 12-13.

8. 'Reith's bill a threat to marine life & mariners', Maritime Workers' Journal, vol. 6, no. 4, September - November, 1998, p.12.

9. ibid., p.12.

10. Ship safe: an inquiry into the Australian Maritime Safety Authority annual report 1996-1997, House of Representatives Standing Committee on Communications, Transport and Microeconomic Reform, August 1998, p. 41.

11. Navigation Amendment (Employment of Seafarers) Bill 1998, Second Reading Speech, Hon John Anderson MP, House of Representatives, Debates, 9 December 1998, p. 1657 - 8.

12. Ship safe, op. cit., p. 49.

13. 'Reith's bill a threat to marine life & mariners', op. cit., p. 13.

14. ibid., p. 13.

15. ibid., p. 15.

16. Ship safe, op. cit., p. 41.

17. ibid., p. 41

18. ibid., p. 41.

19. On 18 December 1997, the Minister for Workplace Relations and Small Business, Hon Peter Reith MP, stated that the Government was committed to ensuring the availability of industry wide redundancy packages, at industry cost, for those leaving the industry. 'Statement on waterfront and maritime reform', Press Release, (Minister for Workplace Relations and Small Business), 102/97.

20. A framework for reform of Australian shipping, op. cit., p. 26.

21. Revitalisation of Australian shipping: an overview, J.G.Crawford, Commonwealth Department of Transport, 1982 (Parliamentary Paper 159 of 1982).

22. Ships (Capital Grants) Act 1987. The incentives took the form of a seven per cent taxable capital grant available when the ship was introduced into service. They were intended to encourage shipowners to introduce modern, technically advanced shipping requiring reduced numbers of crew.

23. Shipping Industry Reform Authority, Shipping Reform: past, present, future, 1992, p. 7.

24. 'International performance indicators: coastal shipping 1995', Bureau of Industry Economics, Research report 68, July 1995, p. 11.

25. 'Government pushes ahead with shipping reform', Hon John Anderson MP, Press Release (Minister for Transport and Regional Services), 18A, 10 December 1998.

26. Australian shipping 1997, Maritime Transport Group, Department of Workplace Relations and Small Business, 1998, p. 2.

27. A framework for reform of Australian shipping, op. cit., p.13.

28. ibid., p.13.

29. 'International performance indicators: coastal shipping 1995', Bureau of Industry Economics, Research report 68, July 1995, p. 6-7.

30. ibid., p. 12.

31. A framework for reform of Australia shipping, op. cit., p. 14.

32. ibid., p. 20-23.

Contact Officer and Copyright Details

Rosemary Bell and Steve O'Neill
27 January 1999
Bills Digest Service
Information and Research Services

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ISSN 1328-8091
© Commonwealth of Australia 1999

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