Loophole in labour standards leads to seafarers’ wage theft, report warns

The International Labour Organisation (ILO) Maritime Labour Convention (MLC) establishes minimum labour standards for all seafarers. However, according to the report, “these standards are weak and minimalist, reflecting standards common across the global shipping industry – including in developing nations. And even these standards are enforced inconsistently by domestic regulators through their Port State Control (PSC) responsibilities under the MLC.”

In Australia’s case, these minimal standards are intended to be enhanced (for ships involved in Australian coastal trading) by domestic rules, in order to close the gap between labour standards applying to foreign-registered international ships, and wages and conditions considered socially acceptable in Australia. However, this effort is undermined by a large loophole in the application of national labour standards to foreign-registered ships licenced to operate in domestic coastal trading

An additional weakness in the system of labour standards for seafarers is that there is often uncertainty as to what precise wages and conditions entitlements apply to a seafarer, due to poorly constructed ‘work agreements’.

These are based on the application of a collective bargaining agreement (CBA) to the seafarers on a particular vessel. However, if there is no applicable CBA, or one is not specified in the relevant SEA, then the opportunity for exploitation is heightened, and compliance and enforcement of standards and entitlements by the national regulator is correspondingly weakened.

Three forms of wage theft

The preceding discussion indicates that wage theft and other violations of minimum labour standards for seafarers can occur through at least three distinct channels:

• The wage and entitlement provisions in international seafarers’ employment agreements (SEAs), as required under the MLC, may not be adequately enforced by AMSA. This is due to AMSA’s propensity to respond only to seafarer complaints or complaints lodged by third party organisations like the ITF on seafarer wages/entitlement issues.
• Where a foreign-registered ship operating under a temporary licence has exceeded the two voyages of ‘good will’ allowed under the TL system, and should then be complying with the Seagoing Industry Award, shipping companies often ignore or delay application of the applicable seafarer wage and entitlement obligations. When combined with inadequate inspection and enforcement efforts, as well as lack of education of seafarers about their rights and entitlements and their legitimate fears about making a complaint, seafarers are systematically robbed of their entitlements under the domestic labour law standard.
• Even when ships fall firmly within coverage of the FW Act and the Seagoing Industry Award, delays and resource constraints at the Fair Work Ombudsman often result in ships exiting Australian waters and the jurisdiction of AMSA (and its detention powers) before enforcement action can be commenced or completed. Experience shows it is difficult to catch and redress instances of wage theft. Many cases of wage theft therefore go undetected and or unresolved.

The report also identifies ten crucial reforms which would make a significant difference in the protection of international seafarers while working in Australian waters. These include:

1. Close the loophole in the Fair Work Regulations 2009 and Seagoing Industry Award;
2. Strengthen the Fair Work Act to regulate the conditions of employment of seafarers in relation to all vessels engaged in trade and commerce with Australia;
3. Amend the Seagoing Industry Award 2020 to level the playing field for all seafarers in coastal trading;
4. Make wage theft financially unviable for shippers;
5. Amend the licence application process under the Coastal Trading (Revitalising Australian Shipping) Act 2012 to require applicants to lodge a bond when applying for a temporary licence;
6. Expand and enforce Modern Slavery commitments;
7. Advocate to national governments and the ILO to establish a network of regional shipping industry labour tribunals to address seafarer labour grievances;
8. Include shipping industry labour standards in international trade agreements;
9. Advocate that the ACCC fulfil the object of the Competition and Consumer Act, to ensure that Australian flag shipping is not hindered from commercial participation in liner cargo shipping;
10. Enhance information sharing and coordination among compliance bodies.

EXPLORE MORE AT the REPORT ON seafarers wage theft