Maritime & Employment Briefing

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1 Maritime & Employment Briefing September 2013 Contents Introduction 01 When will it come into force? 01 How does it create a level playing 01 field? Who does the Convention cover? 02 What does the MLC provide for? 02 What is the Marine Labour 04 Certificate? Conclusion 05 Contacts 06 The Maritime Labour Convention 2006 On 7 August 2013 the UK took the plunge and ratified the Maritime Labour Convention, 2006 (the Convention ). Its significance cannot be understated as it consolidates and updates more than 68 international labour standards. Its overriding aims are to set decent, minimum global standards for seafarers living and working conditions and to help create conditions of fair competition and a level playing field throughout the shipping industry. The UK (which for the purpose of adopting the Convention includes the Isle of Man and Gibraltar) was the 41st country to have ratified the Convention; there have been a further 10 countries that have ratified the Convention since then. Countries including the USA, China and Korea are among those that have yet to ratify the Convention. When will it come into force? The Convention entered into force for the first 30 ratifying countries on 20 August For countries ratifying after this date, the Convention will enter into force 12 months after their ratification. The UK Government, therefore, has until 7 August 2014 to bring UK legislation into line with the Convention s standards. Despite the differing entry dates, from 20 August 2013 Port State Control will be responsible for applying the Convention s requirements to ships flagged in ratifying countries (see below). How does it create a level playing field? The Convention seeks to eliminate the situation in which seafarers on ships flying the flags of countries that do not enforce high standards over their flag vessels are subject to conditions which are unjust and which may endanger health and safety. The Convention seeks to achieve this by introducing the concept of no more favourable treatment, which provides that ships flagged with non ratifying countries will have to comply with the minimum requirements of the Convention when they call at ports of ratifying countries. The aim is to eradicate any advantage gained by registering ships with a non ratifying state. wfw.com

2 02 MARITIME & EMPLOYMENT BRIEFING Who does the Convention cover? The Convention protects seafarers who are defined as any person who is employed or engaged or works in any capacity on board a ship to which this Convention applies. The Convention applies to ships of all tonnages, which are ordinarily engaged in commercial activities. However, no definition of commercial activities is provided but the Convention confirms that it does not apply to ships which navigate exclusively in inland waters within, or closely adjacent to, sheltered waters or areas where port regulations apply. It is clear from the above, that the Convention could apply to many individuals working in a number of sectors, who are not traditionally regarded as seafarers. For example the International Maritime Contractors Association has commented that the definition of seafarers presents particular challenges for the offshore sector as the new requirements are likely to apply to the vast majority of personnel on board offshore support vessels (such as wind farm shipboard support technicians, project and construction teams and diving teams), many of whom have not traditionally been regarded as seafarers. In addition, Superyacht Intelligence expects the Convention to apply to all yachts that are commercially registered, engaging in charter for profit on international voyages....the Convention could apply to many more individuals working in a number of sectors, who are not traditionally regarded as seafarers. The term shipowner is used extensively throughout the Convention and includes not only the owner of the vessel, but also any other organisation or person, such as the manager, agent or bareboat charterer, who has assumed the responsibility for the operation of the ship from the owner and who, on assuming such responsibility has agreed to take over the duties and responsibilities imposed on shipowners in accordance with this Convention, regardless of whether any organisation or persons fulfill certain of the duties or responsibilities on behalf of the shipowner. Again, the definition is very wide and uncertainty surrounds who may be deemed the shipowner for the purpose of the Convention. What does the MLC provide for? The Convention is divided into Articles, which set out the general principles and obligations, followed by more detail in the form of Regulations and a Code. The Code is divided into two parts, A and B. Part A contains the mandatory standards, which each ratifying country must implement through its national laws, and Part B contains guidelines which are non mandatory. The five areas covered by the Convention are: Title 1: Minimum requirements for seafarers to work on a ship Title 2: Conditions of employment Title 3: Accommodation, recreational facilities, food and catering Title 4: Health protection, medical care welfare and social security protection Title 5: Compliance and enforcement The Convention provides minimum requirements in respect of the following 14 areas: Minimum age Medical certification Qualifications of seafarers Seafarers employment agreements Use of any licensed or certified or regulated private recruitment and placement service

3 MARITIME & EMPLOYMENT BRIEFING 03 Hours of work or rest Manning levels for the ship Accommodation On board recreational facilities Food and catering Health and safety and accident prevention On board medical care On board complaint procedures Payment of wages Points of note include: Seafarer s Employment Agreement The Convention provides that every seafarer must have a written agreement with the shipowner; this is known as the Seafarer Employment Agreement ( SEA ) and replaces in the UK the current crewing agreements regime. The shipowner must be named on the SEA so that both the seafarer and maritime enforcement authorities have a single point of contact in case of any problems. The SEA may separately name the employer, as this may in fact be the manager or manning and/or crewing agents engaged in management of the vessel. SEAs should be written or translated into English and include prescribed information, such as the seafarer s name, place and date of birth and the name and address of the shipowner. Seafarers must also be allowed to review and take advice on the terms of the SEA. The Convention provides a model SEA, which is a good source of reference. Recruitment and Placement Services There are far reaching implications for Recruitment and Placement Services ( RPS ), such as crewing agents, who supply seafarers, even if they are based within the jurisdiction of a non ratifying country. In line with current UK legislation, RPS must not prevent or deter seafarers from gaining employment for which they are qualified by using any means, mechanisms or lists (ie, blacklisting). Seafarers must also be provided with information about the job before they are placed, and see and understand their SEA s before it is signed. The Convention introduces a controversial new provision which requires the RPS to establish a system of protection, by way of insurance or an equivalent appropriate measure, to compensate seafarers for monetary loss that they may incur as a result of the failure of the RPS or the relevant shipowner under the SEAs to meet its obligations to them. On board complaints procedure The Convention requires that all seafarers are provided with a copy of the on board complaints procedures, which may be used by a seafarer to lodge complaints relating to any alleged breach of the Convention and/or any of the seafarers rights. It is imperative that Masters and other senior officers are informed of the new procedures and trained on how crew complaints should be effectively handled. Whilst encouraging seafarers to pursue complaints under the on board complaints procedure, the Liberian International Ship & Corporate Registry (ʺLISCRʺ) has published a Maritime Labour Complaint Resolution Form which is to be used in the event that such procedures are not compliant with the requirements of the Convention or if the complaint cannot otherwise be resolved on board. The form itself can be completed and submitted online so that complaints can be processed as efficiently as possible. There are far reaching implications for Recruitment and Placement Services ( RPS ), such as crewing agents, who supply seafarers, even if they are based within the jurisdiction of a non ratifying country. Watson, Farley & Williams September 2013

4 04 MARITIME & EMPLOYMENT BRIEFING Shipowners Liability The Convention imposes an obligation on shipowners to ensure that seafarers are protected with material assistance and support, from financial consequences of sickness, injury or death occurring in connection with their employment. The Convention sets out the minimum costs which are to be covered. It is not yet clear how much of these liabilities can be laid off on insurers/p&i clubs (and, if so, at what additional cost this will be to the shipowner). To assist operators and managers to prepare for inspections under the Convention, the International Labour Organisation (the ILO ) has produced the MLC Pocket Checklist. This is available in hardcopy format and also as an App for ios and Android smartphones. It is worth noting that the ITF have launched three Apps to assist its members, including Look Up Your Ship (which provides information such as if an ITF agreement is in place and/or its status) and Find an Inspector/Union (enabling seafarers to find local ITF support should this be required). Briefly, the MLC certifies that the working and living conditions of seafarers on the ship... have been inspected and meet the requirements of the flag states national laws implementing the Convention. What is the Maritime Labour Certificate? Under the Convention, every ratifying country will require that every vessel flying its flag of 500 gross tonnes or more and which operates internationally or in a foreign port requires a Maritime Labour Certificate ( MLC ). Briefly, the MLC certifies that the working and living conditions of seafarers on the ship, including measures for ongoing compliance to be included in the declaration of compliance by the shipowner, have been inspected and meet the requirements of the flag states national laws implementing the Convention. The MLC is prima facie evidence of compliance under the Convention and once produced, Port State Control will leave the matter alone (unless there is a crew complaint or clear evidence during the visit of non compliance for example). If no MLC is produced, Port State Control may inspect the ship to see if the standards of the Convention are being applied. This will require time on board the vessel which might delay the vessel sailing. If after such inspection there is serious non compliance with the Convention, then the vessel may be detained. Therefore, it is recommended that an MLC is obtained and if the relevant flag state has not ratified the Convention, then the shipowner should obtain one from an approved authority (ie, a Member State who has ratified the Convention). For UK flag ships a MLC can only currently be issued by the Maritime and Coastguard Agency. As mentioned above, UK flag ships will need to comply with the UK s laws implementing the MLC as soon as they are adopted by Parliament but other states are not obliged to acknowledge MLCs issued by the UK authorities until August However, ILO Conference Resolution XIII calls upon Port States to give flag states an additional 12 months following entry into force to ensure that all their ships are inspected and certificated (although this does not apply to passenger ships and bulk carriers, which can be inspected with immediate effect). It remains to be seen whether every Port State will recognise UK certificates. A valid MLC and Declaration of Maritime Labour Compliance (the Shipowner s Declaration ) must be carried onboard. The certificate is valid for five years, subject to intermediate inspection between years two and three, after which the certificate may be endorsed. All ships, irrespective of whether they require a certificate, will be inspected twice within a five year period.

5 MARITIME & EMPLOYMENT BRIEFING 05 The Maritime and Coastguard Agency has produced provisional guidance on the preparation of the Shipowner s Declaration and this provides a basis on which shipowners may wish to start to prepare their documentation. The MLC Regulations do not apply to: pleasure vessels; fishing vessels; ships of traditional build; warships or naval auxiliaries; and ships not ordinarily engaged in commercial activities. Conclusion The Convention provides a major international change to the working and living conditions for seafarers and shipowners. Once the Convention become effective it will, in essence, have to be complied with by every seagoing vessel (over 500 gross tonnage). The UK alone has 1383 vessels on its register totalling gross tonnage. There are approximately 89,000 seafarers working on UK flagged vessels and more than 24,100 UK nationals working as seafarers. It is imperative that your books are in order and documentary audits are carried out to ensure that seafarers are engaged on Convention compliant terms. The scope of such audits should be wide enough to include a review of charterparty terms, crew management agreements (including contracts of employment) as well as internal procedures and protocols concerning the employment and otherwise overall management of seafarers. Watson, Farley & Williams September 2013

6 06 MARITIME & EMPLOYMENT BRIEFING Contacts Should you wish to discuss any of the matters raised in this briefing, please speak with the authors, Asha Kumar and Toby Royal, a member of our team below, or your regular contact at WFW. Asha Kumar London Toby Royal London Daniel Rodgers New York Maren Brandes Hamburg Laurence Martinez Bellet Paris lmartinez Furio Samela Rome George Paleokrassas Piraeus Mei Lin Goh Singapore Madeline Leong Hong Kong All references to Watson, Farley & Williams and the firm in this publication mean Watson, Farley & Williams LLP and/or its affiliated undertakings. Any reference to a partner means a member of Watson, Farley & Williams LLP, or a member of or partner in an affiliated undertaking of either of them, or an employee or consultant with equivalent standing and qualification. This publication is produced by Watson, Farley & Williams. It provides a summary of the legal issues, but is not intended to give specific legal advice. The situation described may not apply to your circumstances. If you require advice or have questions or comments on its subject, please speak to your usual contact at Watson, Farley & Williams. This publication constitutes attorney advertising. Watson, Farley & Williams LON KW KW 06/09/2013 wfw.com

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