(1)Where any dispute arises between a competent harbour authority and an authorised pilot or a person wishing to be authorised under section 3 above by the authority—
(a)as to what the terms of any provision in any contract of employment which is to be entered into between them should be; or
(b)whether the terms of any provision in any existing such contract between them should be modified,
and that dispute cannot be resolved by negotiation between them, the authority or the majority of the authorised pilots for its harbour may refer the dispute to an arbitration panel appointed in accordance with subsection (2) below and the panel shall determine what the terms of that provision should be and the kinds of contracts of employment between the authority and authorised pilots to which their determination is to apply ("relevant contracts").
(2)The arbitration panel referred to in subsection (1) above shall consist of three members, one, the Chairman, appointed by the Secretary of State, one, by a body appearing to the Secretary of State to be representative of harbour authorities throughout the United Kingdom and one by a body appearing to him to be representative of pilots throughout the United Kingdom.
(3)In making a determination under subsection (1) above the arbitration panel shall have regard to any general guidance issued by the Secretary of State as to the matters to be considered by them.
(4)Where the arbitration panel make a determination under subsection (1) above then, subject to any agreement to the contrary between the parties and to the effect of any subsequent determination under this section—
(a)on and after the date on which the determination is made any relevant contracts entered into before that date shall have effect with the substitution for any inconsistent provision of a provision in the terms determined by the panel; and
(b)any relevant contracts entered into on or after that date shall contain a provision in those terms.
(5)The references to contracts in subsection (1) above do not include contracts of employment entered into before the appointed day for the provision of services as a pilot before that day.
(6)In the case of an authority whose harbour falls within more than one former pilotage district, for the reference in subsection (1) above to the majority of the authorised pilots for its harbour there shall be substituted a reference to the majority of the authorised pilots for the part of the harbour for which the person as to whose contract the dispute has arisen is or wishes to be authorised.
(7)Subject to the provisions of this section, the Secretary of State may by regulations make such provision as he thinks fit as respects the referral and determination of disputes under subsection (1) above and such regulations may, in particular, provide that the expenses of such referrals and determinations are to be borne by the Pilotage Commission or by such other person as the Secretary of State thinks fit.
(8)The preceding provisions of this section shall cease to have effect on such date (not being earlier than the expiry of the period of three years beginning with the appointed day) as the Secretary of State may by order prescribe, but no such order shall affect the terms of any contract continuing in force at that date.