CHAPTER 1
BACKGROUND TO THE LEGISLATION
Progress and referral of the bill
1.1 On 26 May 1999, the Senate referred to this Committee for report
the provisions of the Navigation Amendment (Employment of Seafarers) Bill
1998. The bill had originally been introduced in the House of Representatives
on 25 June 1998 by the Minister for Workplace Relations and Small Business.
The bill was not debated and lapsed with the dissolution of the House
on 31 August 1998. It was introduced for the second time in the House
of Representatives by the Minister for Transport and Regional Services
the Hon John Anderson MP on 9 December 1998 and received its Third Reading
in the House on 31 March 1999.
1.2 The Committee agreed to invite submissions from interested organisations
and subsequently received three submissions: from the Australian Institute
of Marine and Power Engineers, the Maritime Union of Australia and the
Australian Shipping Federation. In addition, the Minister provided an
information paper to the Committee explaining the background to the legislation
and describing its provisions.
Reforms and changes to the shipping industry
1.3 This bill needs to be considered in the context of attempts to reform
the shipping industry over the past two decades. The principal objective
of this reform has been to reduce the operating costs of Australian ships
to a level similar to the cost of running other OECD ships with national
crews. As a result of incremental changes to operating practices since
1984, typical crew numbers have fallen from 30 in 1984 to 21 in 1992.
In 1989 the Shipping Industry Reform Authority (SIRA) was established
to draw up detailed plans for shipping reform and to oversee their implementation.
The life of this body was extended in 1993 for two years. Although the
SIRA was able to achieve some rEducations in ships' crew levels, mainly
through the broadbanding of jobs and through multi-skilling, it did not
address terms of employment issues.
1.4 The Howard government established its own Shipping Reform Group in
1996 comprising industry representatives. A consultation mechanism was
established with unions and the Government. In March 1997 the Group presented
a report to the Minister for Workplace Relations and Small Business, which,
among other recommendations, proposed four changes dealing with aspects
of labour reform, namely:
- a move to company employment
- a rEducation in seafarers' leave entitlements
- abolition of the separate seafarers' workers compensation scheme,
and
- provision for anticipated redundancies.
1.5 The objective of the Shipping Reform Group was to examine options
for winding back cabotage and advise on the need for a Second Register,
the aim of the latter being possibly to ensure the competitiveness of
the Australian fleet through the employment of mixed nationality crews
on Australian-registered vessels.
Objectives and provisions of the bill
1.6 The Government's prime objective, stated in the explanatory memorandum
to the bill, is to bring the Navigation Act into line with practices that
are relevant to the operation of a modern and efficient shipping industry.
A two stage legislative program is planned to achieve this objective.
This amendment bill is the first stage: aimed at removing employment–related
provisions which are inconsistent with the Workplace Relations Act and
the concept of company employment. A second stage will involve a comprehensive
re-writing of the Navigation Act to make it a more efficient regulatory
tool.
1.7 The terms and conditions of employment of seafarers are regulated
by the Navigation Act 1912. The employment related provisions of
this Act at the time it was passed followed contemporary British practice,
covering situations where the majority of crew were employed as casual
labour, with seafarers contracted to serve on a particular ship for a
particular voyage. The employment provisions of the Act thus reflect the
high incidence of casual employment. With the more recent change to company
employment, the terms and conditions applying to seafarers are matters
for negotiation and a number of labour related provisions in the Navigation
Act have been rendered obsolete. The amendment bill has as its main purpose
the removal or repeal of these obsolete provisions. It is now government
policy to place the employment of seafarers on the same basis as all other
employment. Legislative provision for negotiation of terms and conditions
of employment of seafarers is now provided for through the Workplace
Relations Act 1996.
1.8 The bill contains over 70 provisions. The most important may be itemised
as follows:
- the requirement under Section 17 for seafarers to produce qualifications
certificates is abolished in the bill, but will be covered by a Marine
Order to provide for production of such a certificate to the Australian
Maritime Safety Authority;
- the prohibition under Section 32 on demanding or receiving fees for
the supply of seafarers is ended with the repeal of Division 4 of Part
2;
- the prohibition of the use of crews on overseas voyages from handling
cargo or ballast while the ship is in an Australian port is abolished
with the repeal of Section 45;
- the requirement to enter into a prescribed form of articles of agreement
covering conditions of employment is abolished with the repeal of Section
46 and its substitution by a new section to require an employment agreement
between the master and each seafarer before the ship sails;
- the abolition of the Marine Council and all its functions with the
repeal of Sections 47, 48, 138 and 424;
- changes to procedures set out in divisions 9 and 10 of Part 2 covering
the discharge of seafarers from a ship and methods of paying their wages;
and
- the abolition of the 3 month sick leave provision with the repeal
of Section 132.
Looking at the evidence
1.9 The Committee received only three submissions in relation to this
inquiry, in addition to a discussion paper forwarded by the Minister for
Transport and Regional Services. A public hearing was held in Melbourne
on 20 July at which evidence was heard from a representative of the Maritime
Union of Australia, a representative of the Australian Shipping Federation
and officers of the Department of Transport and Regional Services and
the Australian Maritime Safety Authority. This section of the report deals
with the evidence presented to the Committee in relation to the provisions
itemised in paragraph 1.8, and to the Committee's consideration of this
evidence.
Qualifications certificates
1.10 The Australian Institute of Marine and Power Engineers was the only
body to make reference in either a submission or in evidence to the repeal
of Section 17 in relation to the production of qualification certificates.
The Institute cited evidence in the House of Representatives `ships of
shame' reports of the widespread use of false certificates on foreign
ships. Repeal of this section would, so the Institute claimed, be a wrong
signal for the Australian Parliament to send. [1]
The Committee sees no basis to this argument as the legislation is intended
neither to apply to nor to influence foreign shipping interests.
Fees for supplying seafarers
1.11 The proposed repeal of Division 4 of Part 2 of the Navigation Act
removes an obsolete provision aimed at prohibiting the practice of crewing
agents demanding payment from seafarers in order that they be employed.
This practice was known as `crimping', and, as a witness informed the
Committee, it is still current practice in a number of countries.
1.12 The Maritime Union of Australia argues that the result of this repeal
will be an encouragement to under-skilled seafarers to bid for work on
ships, the possibility of `third world labour' bidding for jobs on Australian
ships, and the potential for jobs to be filled on the ability to pay rather
than on merit. [2] The Australian Institute
of Marine and Power Engineers took a less gloomy view of this amendment,
recognising that there had been widespread development in recent years
of fee-charging employment agencies around the world. The Institute considered
repeal of the provision to be appropriate, provided that there was some
regulation of employment agencies. [3]
1.13 In the Committee's view, a resurgence of crimping is highly unlikely
because of the vastly altered nature of maritime employment over the past
century. The demand for highly-skilled seafarers, associated with reduced
crewing levels, provides little or no opportunity for unscrupulous labour-hire
organisations to exploit an unregulated labour market which creates its
own disciplines and standards. With regard to the Maritime Union's claims
of the threat of foreign labour, the Committee believes that current immigration
and visa regulations are a sufficient safeguard. A responsibility also
falls upon the Maritime Union to ensure that these and other safeguards,
which will continue to exist, are well-known among maritime employees
whether or not they are union members.
Use of crew for handling cargo and ballast
1.14 The repeal of Section 45 will end another obsolete demarcation which
has long been a feature of the maritime industry. As the Minister for
Transport and Regional services explained to the House of Representatives,
there is a general rule that the loading and unloading of ships is a job
for stevedores, but circumstances exist where it is appropriate for crews
to handle goods, as in the cleaning of holds where crew would need to
handle residues of cargo, and in the loading of ships' stores. [4]
1.15 The Maritime Union has expressed the view that the repeal of this
section will lead to seafarers being required to undertake work for which
they are not trained. [5] The Australian Shipping
Federation has made the point that this change will not encourage ships
crews to become involved in the loading and unloading of ships because
of the existence of specialist stevedoring practices. `There are a number
of commercial, operational and safety issues that would prevent a change
to current stevedoring arrangements.' [6] The
Committee considers that this view more accurately reflects the realities
of maritime employment today and in the future.
Articles of Agreement
1.16 Articles of Agreement are a contract of employment between a master
of a ship, on behalf of its owners, and each member of the crew. The current
provisions in regard to Articles of Agreement in Section 46 are highly
prescriptive, and as such they are inconsistent with the aim of the Workplace
Relations Act which provides for a high degree of flexibility in making
employment arrangements best suited to the needs of all parties.
1.17 Both the Maritime Union and the Institute of Marine and Power Engineers
oppose the repeal of Section 46 because they see it as an ideologically-driven
offensive against collective agreements. In evidence to the Committee,
a representative of the Maritime Union of Australia indicated that the
union was finding an increasing tendency for employers to enter into Australian
Workplace Agreements with employees, even though they may have preferred
a collective agreement, [7] but this evidence
highlights the changing employment culture which unions need to come to
terms with.
1.18 Perhaps the most significant evidence presented to the Committee
in regard to Articles of Agreement was from the representative of the
Australian Shipping Federation. It was explained to the Committee that
deck officers and engineering officers had always been employed on a company
employment basis, while ratings have traditionally been employed on a
casual basis. This casual or informal basis of employment was modified
in 1964 with the introduction of Schedule 10 of the Maritime Industry
Seagoing Award. This schedule no longer appears in the industry award,
not being an allowable matter under Section 89A of the Workplace relations
Act. It was further explained to the Committee that in 1998 an agreement
was made between ship owners and the Maritime Union of Australia which
effectively implemented the changes which are provided for in the repeal
of Section 46 of the Act. As the Committee heard, in relation to negotiations
leading to the 1998 agreement:
Those negotiations concluded in an agreement being reached in April
last year which became a framework agreement for the transition from
industry employment to the company employment of ratings. Once that
occurred – that agreement was independent of the proposed changes
contained in this bill – we could confidently say that the stage
had been set whereby Australian shipping companies could employ all
their employees' ratings, as well as deck officers and engineering officers,
on a common basis and in accordance with normal community practice.
…it is really the events of last year which we see as being a significant
factor in changing whatever historical reliance there may have been
on certain provisions of the Navigation Act.
1.19 The Committee makes the obvious point that the objection of the
Maritime Union to this provision is inconsistent with its 1998 agreement
with shipowners. Nor does the Committee find any evidence that the replacement
of Article of Agreement with negotiated agreements will lead to increased
casualisation of the maritime workforce, despite a claim by the Maritime
Union representative at the hearing that this was occurring in the off-shore
oil and gas industry. [8] To the Committee's
knowledge, this amendment bill does not include provisions for this category
of employee.
The Marine Council
1.20 Another of the concerns expressed about the bill is the proposed
abolition of the Marine Council. The genesis of this body was the Maritime
Industry Commission, established under the National Security Act during
the Second World War as part of the manpower regulation provisions of
that act. [9] The Marine Council has previously
dealt mainly with issues concerning the suitability of ratings for service
at sea and with matters relating to discipline, essentially an outdated
extension of powers necessary to maintain the supply of seafarers during
wartime. In the Government's view this is more appropriately the responsibility
of the companies managing the workforce, as such matters would be in any
other industry. There is no need for a government appointed body to perform
such tasks. [10]
1.21 The Maritime Union is opposed to the abolition of the Marine Council
because it sees the need for a `third party', independent of employers.
[11] The submission from the Australian Institute
of Marine and Power Engineers makes the assumption the Government's determination
to abolish the Marine Council is because some of its members are drawn
from maritime unions. The submission also claims that seafarers in breach
of codes of conduct are prevented by Marine Council action from unrestricted
movement between employers.
1.22 The abolition of the Marine Council was accepted with approval in
the submission from the Australian Shipping Federation, although its representative,
in evidence to the Committee, indicated that this was of less significance
than other amendments. The Shipping Federation referred to its diminishing
role and therefore workload under changing conditions in the industry.
[12]
1.23 The Committee was presented with no compelling evidence that the
abolition of the Marine Council would result in diminished rights or protection
of seafarers. Nor was the Committee convinced that the Marine Council
is an appropriate disciplinary body for contemporary conditions of service.
It notes evidence given by the Australian Maritime Safety Authority which
states that `third party' discipline is incompatible with company employment
in that it removes from companies the onus to exercise their own judgement
in regard to the hiring and re-hiring of seafarers with a record of breaching
codes of conduct. [13]
1.24 Nor has the Marine Council any appropriate role in vetting the qualifications
of seafarers, as this responsibility is jointly and properly exercised
by shipping companies and by the Australian Maritime Safety Authority.
Normal recruitment and employment practices enable the effective screening
of job applicants. The Committee, in conclusion, supports the intent of
the legislation in abolishing this regulatory body which no longer serves
any useful function.
Discharge of seafarers and the payment of wages
1.25 Current provisions of the Navigation Act contain very detailed requirements
covering procedures for the discharge of a seafarer from a ship. These
procedures are no longer relevant under company employment arrangements.
The same may be said of the provisions for the payment of wages. The Committee
notes that matters relating to the assessment of the nature and extent
of seafaring experience for the safety purposes covered by the International
Maritime Organisation's Convention on the Standards of Training, Certification
and Watchkeeping will be covered by the issue of Marine Orders made in
accordance with the Navigation Act. The Committee did not receive any
submissions or comments on these provisions of the bill.
Sick-leave provisions
1.26 The Committee devoted a considerable portion of its time to consideration
of the issue of sick-leave entitlements of seafarers under the new provisions,
and the welfare of seafarers put ashore as a result of sickness. In the
view of the Government there is no need for such detailed provisions in
relation to these matters as is currently provided for under the Navigation
Act. They are matters for negotiation as part of workplace agreements,
as for any other occupation.
1.27 In its submission, the Institute of Marine and Power Engineers has
acknowledged past abuses of the sick-leave provisions, although it argues
that the abuses have been at least reduced. [14]
The submission also argues against repeal of these provisions on the grounds
that the peculiar conditions of service afloat warrant them. The Maritime
Union makes the same claim, arguing that the loss of this provision will
leave seafarers in `the invidious position of having to choose to continue
to work while ill or injured, or go ashore to get medical attention but
lose their right to pay'. [15] The Committee
has not been able to find out, from either the written submission or the
evidence presented at its Melbourne hearings, the essential differences
between maritime employment and any other employment, in regard to benefits
and entitlements. It takes the view that if airline crews flying foreign
routes are able to negotiate reasonable sick-leave entitlements, this
should present no difficulties for seafarers.
1.28 At the Melbourne hearing, the Australian Shipping Federation, with
an inference to abuses in the current entitlement, pointed out that the
three month maximum sick-leave benefit was effectively a minimum entitlement.
The Committee was told that under the new arrangements companies would
have to apply the same standards to all their seafarers as would be expected
within the norms of the Australian community. Further, it was argued that
protections built into an enterprise agreement would give an individual
better protection in regard to repatriation benefits or continuing payment
of wages and medical expenses than was currently provided under Section
132 of the Act. [16]
CONCLUDING COMMENTS
1.29 The Committee notes a residual attitude which prevails in some quarters
that maritime employment is in a category of its own because of its history.
Although seafaring continues to involve long periods of separation from
shores and homes, it is no longer a myth-bound occupation. Evidence presented
by the Maritime Union of Australia was critical of the proposed legislation,
in both the detail of the bill and in its underlying policy. The union
is opposed to the principle of the Workplace Relations Act, and therefore
to any other legislation whose implementation depends upon that Act. The
basis of this opposition, the Committee believes, is the challenge posed
to the leadership and future effectiveness of the union in dealing with
and appealing to a workforce whose support it must now win on the basis
of providing tangible benefits and improved `client service'. The Workplace
Relations Act does not exclude unions from positions of influence in the
negotiation of terms and conditions of service of its members: it simply
removes from the process what was an exclusive and monopolistic exercise
of union power. It is the Committee's view that the uncertainty faced
by the Maritime Union of Australia in redefining its role under the Workplace
Relations Act has strongly influenced its opposition to further reform
of the shipping industry.
1.30 The Committee supports the thrust and the detail of this proposed
legislation. While it contains a number of important `house-keeping' elements,
it should not be overlooked that it follows logically from the implementation
of workplace relations reforms in all other sectors of Australian industry.
As the Committee has established to its satisfaction, this legislation
also follows an agreement reached last year between ship owners and unions
to implement the most important reforms regarding articles of service.
The Employment of Seafarers Bill is, in the main, a ratification of that
important agreement.
1.31 The Committee recommends to the Senate that the bill pass
without amendment.
Senator John Tierney
Chair
Footnotes
[1] Submission No. 1, Australian Institute of
Marine and Power Engineers, p. 3
[2] Submission No. 2, Maritime Union of Australia,
p. 6
[3] Submission No. 1, op.cit. p. 2
[4] Hon John Anderson MP, Hansard (Representatives),
9 December 1999, p. 1658
[5] Submission No. 2, Maritime Union of Australia,
p. 6
[6] Submission No. 3, Australian Shipping Federation,
p. 6
[7] Hansard, Melbourne, 20 July 1999,
p. 2
[8] Hansard, Melbourne, 20 July 1999,
p. 4
[9] Hansard, Melbourne, 20 July 1999,
p. 19
[10] Hon John Anderson MP, Hansard (Representatives),
9 December 1998, p. 1657
[11] Submission No. 2, Maritime Union of Australia,
p. 2
[12] Hansard, Melbourne, 20 July 1999,
p. ?
[13] Hansard, Melbourne, 20 July 1999,
p. 19
[14] Submission No. 1, Australian Institute
of Marine and Power Engineers, p. 4
[15] Submission No. 2, Maritime Union of Australia,
p. 7
[16] Hansard, Melbourne, 20 July 1999,
p. 10