Preparation of marine employment contracts is a complex matter
By Ian Biles
from an original article for The Triton
Under English law, when working as an employee, it is necessary for the employer to supply the employee with a contract. Within that contract there are a certain number of minimum defined requirements. Failure to supply a contract and/or to cover the specified requirements is a criminal offence.
As a minimum, the written statement must cover the following:
1. The name of the employer and the employee.
2. The date when employment began.
3. The remuneration to be paid and the intervals at which it is to be paid.
4. The hours of work.
5. Any holiday entitlement.
6. Any entitlement to sick leave, including any entitlement to sick pay.
7. Any pension contribution or pension scheme.
8. The terms of notice of termination.
9. A job title and/or a brief job description.
10. Where the employment is not permanent, the period for which the employment is expected to continue or, if it is for a fixed term, the date when it is to end.
11. Either the place of work or, if the employee is required or allowed to work in more than one location, an indication of the anticipated location(s) and the employer's address.
12. Details of the existence of any relevant collective agreements that directly affect the terms and conditions of the employee's employment including, where the employer is not a party, the persons by whom they were made.
There is no particular requirement for any of the above terms to be included as part of the contract of employment. However, where any of the above terms are not part of the contract, the exclusion of the particular term is to be covered by a specific statement to that effect, for example: "There is no pension entitlement with this contract of employment."
The statement must also include a note giving certain details of the employer's disciplinary and grievance procedures, and state whether a "pensions contracting-out certificate" is in force for the employment in question.
If an employee is normally employed in the UK but will be required to work abroad for the same employer for a period of more than one month, the statement must also cover the period for which the employment abroad is to last, the currency in which the employee is to be paid, any additional pay or benefits, and the terms relating to the employee's return to the UK (repatriation).
The above details are given as a general guide to the requirements for a contract. The preparation of an actual contract of employment is a complex area of law and, in the event that a contract is needed, employers or their captains are well advised to contact their legal adviser.
Ship's articles
For British-registered ships, the requirement to supply a contract of employment is replaced by the requirement to have a set of "Ship's Articles". This is, in effect, a generalized contract of employment that stipulates the basics of the employment in much the same way as a contract but with an application that is particular to the operation of a vessel.
The development of ship's articles is steeped in history. However, for a set of articles to be used today, they must be approved by the Maritime and Coastguard Agency (MCA). Standard forms of articles for different shipping trades exist and these are approved as generic documents.
For U.K.-registered yachts an approved Crew Agreement and List of Crew is detailed in
Marine Guidance Note MGN
149 (M) Approval of Crew Agreements Yachts. A copy of this MGN is available on the MCA Web site (www.mcga.gov.uk). As a general guide, all UK-registered yachts that employ more than four crew and that undertake international voyages are required to have an approved crew agreement.
The Isle of Man government has produced a standard set of articles applicable to large yachts under the Isle of Man flag.
Terms and conditions
Notwithstanding either the contract of employment or the ship's articles all crew work under terms and conditions, irrespective of whether they are legal or otherwise. Within superyachts, as with most other types of employment, there is a diverse range of terms and conditions applicable to yacht crew. However, regular reviews by various industry publications suggest that there are bands of salary levels that can be applied as a general guide.
Salary is only one of the various elements that are dealt with in the terms and conditions of employment. Another important element is leave ratio.
As with commercial shipping, practice leave is normally related to the length of service on board. For a yacht, these terms are commonly four weeks leave in a calendar year of service. However, where specific crew positions have been difficult to fill (particularly qualified engineers) more generous leave ratios have begun to develop.
Termination
The method by which a contract can be terminated is one of the aspects that needs to be defined in a contract of employment. As a general guide, if a crew member is to be released this can only happen after a set procedure has been followed. Failure to follow this procedure could lead to a claim of unfair dismissal from the crew member.
In the first instance the crew member needs to have been informed about what is expected, in terms of both work and conduct. This information normally forms part of the yacht's standing orders to which, in an ideal world, the crew member signs when joining. The standing orders may include specific guidance on conduct and dismissal or may refer to a specific document dedicated to conduct and dismissal. In either event, the information has to be made available.
A standard set of guidelines for what is considered to be reasonable behavior has been developed over many years within the Merchant Navy and has been developed into what is called the Code of Conduct for the Merchant Navy.
The current code came into force in June 2001. (A copy of the code was summarized in the November issue, page C2.)
To the best of the author's knowledge no set of guidelines has ever been specifically published for large yacht crews.
Ian Biles is the founder of Maritime Services International, a marine surveying and consultancy business. He holds a Class I (Unlimited) Master's certificate and developed a risk management program for large yachts for a London-based underwriter. Contact him at info@maritime.uk.com or +44 (0)2392 524490.
