Contracts in maritime labour law

The general maritime law, courts, and national legislatures have given special
attention to seafarers’ employment contracts. An employment contract is the
most important document relating to a seafarer’s life and work. Seafarers’ employment
contracts are also called articles. The general maritime law has for centuries
required all seafarers’ employment contracts to be in writing. As early as 1729,
English statutes have required seafarers’ employment contracts to be in writing.
Seafarers’ employment contracts have been the subject of extensive regulation
by maritime nations. Flag State law, and in some cases the law of the seafarers’
country of citizenship, regulate seafarers’ employment contracts. One of the earliest
ILO conventions created international standards for seafarers’ employment
contracts. The 1926 Seafarers’ Articles of Agreement Convention (No. 22), which
has been ratified by sixty countries, requires that written contracts be signed by
both the seafarer and the shipowner, or shipowner’s representative after providing
the seafarer a reasonable opportunity to examine the contract. The Convention
specifies eleven particulars that must be included in seafarers’ employment contracts
including such things as the seafarer’s name, date and place where the contract
was signed, the name of the vessel, the capacity in which the seafarer is to
be employed, the amount of wages, conditions for terminating the contract, the
duration of the contract, and annual leave.

Types of contracts
Modern seafarers’ employment contracts vary greatly in their form and content.
There is no standard employment agreement required for all seafarers. Following
are some of the types of seafarers’ employment contracts.

Individual contracts
Individual contracts are agreements between an individual seafarer and a shipowner.
Although the contracts must comply with the appropriate statutory requirements,
for many seafarers there is little or no room for negotiating the terms.

Collective bargaining agreements (CBAs)
These are contracts that are negotiated between shipowners and trade unions on
behalf of seafarers represented by the unions. They are sometimes called trade
union contracts. CBAs usually determine wages and conditions for all of the seafarers
represented by the union on a particular ship or employed by a particular shipping
company. The most common CBAs are those approved by the International
Transport Workers’ Federation (ITF). The ITF is a federation of approximately
700 independent transport workers’ trade unions in 150 countries. As part of its
campaign in the maritime industry to influence seafarers’ wages and working conditions
on ships registered in countries it has designated as flags of convenience
(FOC), the ITF has established minimum standards for seafarers working on
FOC vessels.

Total crew cost agreements (TCC)
Total crew cost agreements are the most common ITF-approved CBAs. They are
negotiated by ITF-affiliated unions for seafarers working on FOC vessels. Because
TCCs are negotiated between shipowners and ITF-affiliated unions, their terms
are often different from each other. All TCC agreements must, however, meet
minimum ITF standards.

ITF standard agreements
The ITF standard agreement sets standards for contracts on FOC vessels that
are subject to ITF industrial actions, such as strikes, or are operated by shipping
companies that have breached a previous TCC. It is not normally applied to
national flag vessels, or to ships that have TCC agreements. The ITF standard
agreement is the most favourable from a seafarer’s perspective and the most
expensive from a shipowner’s perspective. Its terms are intended to encourage
shipowners to negotiate TCC agreements without having to resort to industrial

International Bargaining Forum (IBF) agreements
The International Bargaining Forum is a mechanism for negotiating CBAs between
the ITF and shipowner members of the Joint Negotiating Group (JNG).
The IBF agreements are available to shipowner members of the associations that
negotiate the agreements with the ITF in the International Bargaining Forum. IBF
agreements are normally negotiated on an annual basis between shipowners and
local unions. While the IBF agreements will vary in content, they all must meet
minimum standards of the IBF-agreed framework.

POEA contracts
The Philippines Overseas Employment Administration (POEA) has minimum
standards for contracts for Filipino seafarers working on ocean-going vessels. These
standards are contained in the POEA Standard Terms and Conditions Governing
the Employment of Filipino Seafarers on Board Ocean Going Vessels. These standards,
commonly called the POEA Standard Agreement, form the basis for most
Filipino seafarers’ employment contracts. The POEA requires all Filipino seafarers
employed on ocean-going vessels to have contracts approved by the POEA.
The POEA has prescribed a standard contract of employment that aims to define
clearly the rights and obligations of the concerned parties. Any disputes arising
under the contract are subject to the law of the Philippines and to the exclusive
jurisdiction of the POEA.

MLC 2006 contract provisions
The MLC 2006 standards for seafarers’ employment agreements in Regulation
2.1 update requirements of the Seamen’s Articles of Agreement Convention, 1926
(No. 22). Flag States must implement the MLC 2006 requirements for seafarers’
employment agreements for seafarers working on its ships through its laws or regulation.
Both the seafarer and the shipowner must sign seafarers’ employment
agreements. Measures must be provided to ensure that seafarers understand their
contractual rights and obligations. They must have an opportunity to read their
agreement and get advice on it before that they sign it. Both the seafarer and
shipowner must have an original signed copy of the agreement. Where CBAs
are incorporated into seafarers’ employment contracts, a copy of the applicable
CBA must be available on board the vessel. Copies of seafarers’ employment
agreements in English must be available to port and flag State authorities on board

Maritime law now protects seafarers’ rights to wages, but this has not always been
the case. Historically, seafarers’ wages depended upon the success of the voyage.
Wages were paid only if the vessel made a profit. About 150€years ago, maritime
nations began enacting statutes that codified or modified seafarers’ rights to wages.
Such statutes now determine seafarers’ rights to wages, and the statutes can vary
from country to country.
Today, almost every maritime nation has outlawed the custom of seafarers’ wages
being dependent on the success of the voyage. Seafarers are entitled to be paid their
earned wages without regard to their vessels’ earnings.
Seafarers’ wage rights are highly favoured in maritime law. They have been called
‘sacred claims’ protected by a lien against the vessel. While the ship is primarily
liable for paying seafarers’ wages, the general maritime law also allows seafarers’
wage claims to be made against the shipowner and the master.
The amount of wages is determined by the seafarers’ contract or collective bargaining
agreement. Some countries have minimum wage laws, but in most cases today
contractual wages exceed the legal minimums.
In most countries, seafarers’ wages begin when the seafarer begins work, or on a
specific date specified in the contract—whichever occurs first. Countries’ laws differ
as to when seafarers must be paid thereafter. Some require payment of wages
every month, others require partial payments whenever cargo is discharged, and
others still do not require payment until the seafarer signs off the ship. The MLC
2006 recommends that an able seafarer be paid at least as much as recommended
by the Joint Maritime Commission.
The MLC 2006 requires that seafarers be paid their agreed-upon wages at least
once a month and be provided a full accounting of their wages and deductions.
Shipowners must provide seafarers a way to send all or part of their wages to their
families, dependants, or legal beneficiaries by allotment. The MLC 2006 recommends,
but does not require, that seafarers should be paid overtime pay for hours
worked in excess of forty-eight hours per week. It recommends overtime pay be
at least 1.25 times seafarers’ regular hourly wages.

Hours of work and hours of rest
Today’s merchant ships are operated by a small number of seafarers. Small crews
create a significant challenge for both ship operators and seafarers to ensure that
seafarers get adequate sleep to remain alert and well rested. When seafarers are
deprived of needed rest, mistakes and accidents happen. Fatigue has been identified
as a major factor in many maritime casualties. Both shipowners and seafarers
have incentives for seafarers to work beyond safe human endurance limits. Ship
operators can reduce costs by employing fewer seafarers who work longer hours.
Seafarers can earn more money by working more hours. Therefore it is important
to regulate hours of work and hours of rest to protect seafarers’ health and maritime

Ancient maritime codes did not place limitations on seafarers’ hours of work. The
IMO has adopted standards for seafarers’ hours of rest that are based on marine
safety and fatigue considerations. The ILO has also set standards for seafarers’
hours of work and rest. The Hours of Work and Manning (Sea) Convention, 1936
(No. 57) established an eight-hour day, allowing overtime in only very limited
circumstances. The Wages, Hours of Work and Manning (Sea) Convention, 1946
(No. 76) established a minimum monthly wage for able seafarers, limited the
hours that could be worked in a two-week period, and set an overtime pay rate
of 125 per cent of basic pay. The Wages, Hours of Work and Manning (Sea)
Convention, 1949 (No. 93) slightly changed the 1946 Convention by replacing
the prohibition against consistent overtime work with a provision that consistent
overtime work should be avoided. The Wages, Hours of Work and Manning
(Sea) Convention, 1958 (No. 109) attempted to remove obstacles that prevented
countries from ratifying the 1949 Convention. None of these conventions ever
attracted sufficient ratifications for them to come into force. The Seafarers’ Hours
of Work and the Manning of Ships Convention, 1996 (No. 180) was a departure
from previous ILO conventions by specifically addressing seafarers’ fatigue and
safety implications. This Convention came into force in 2002, and it has been
ratified by twenty-one States.
The MLC 2006 contains the hours of work and hours of rest standards of the 1996
Convention. When determining national standards for hours of work or hours of
rest, flag States must take into account dangers posed by seafarers’ fatigue. Flag
States can choose limits on either hours of work or hours of rest. The limits on
hours of work are a maximum of fourteen hours in any twenty-four-hour period
and seventy-two hours in any seven-day period. The limits on hours of rest are a
minimum of ten hours in any twenty-four-hour period and seventy-seven hours
in any seven-day period. Rest can be divided into two periods, but one of them
must be at least six hours long and the interval between rest periods cannot be more
than fourteen hours.

The duration of a seafarer’s service on a ship is a standard provision of employment
agreements and is often regulated by statute. Many countries’ laws limit employment
agreements to a maximum of one year, or that seafarers be given an annual
vacation. Seafarers’ employment agreements usually terminate when their vessel
is shipwrecked, lost, or becomes unseaworthy. In such circumstances, seafarers are
generally entitled to repatriation, compensation for lost personal effects, and some
lost wages, usually one month’s wages. If a seafarer’s contract expires while the
ship is at sea, employment continues under the same conditions and terms as the
expired contract until the vessel arrives in port.
Since the earliest sea codes, maritime law has provided seafarers’ protections against
being unfairly dismissed. While the law has recognized a shipmaster’s ultimate
responsibility for a ship’s safe and efficient operation, including ensuring that crew
are competent to perform their duties, the law also provided seafarers’ protections
against being unfairly dismissed.
Historically, shipmasters have had unquestioned legal authority to dismiss
seafarers. Even today, few courts would interfere with a shipmaster’s responsibility
to ensure ship safety or with his discretion to dismiss crewmembers.
However, flag State laws and contracts provide procedures that must be followed
when dismissing seafarers. While it is unlikely that a court would
require a shipmaster to reinstate a dismissed seafarer, laws and contracts provide
other remedies to an unlawfully dismissed seafarer. Typically, seafarers
who are improperly terminated from employment are entitled to repatriation
and earned wages plus damages. Damages can vary from one or two month’s
wages to the wages that the seafarer would have earned had the contract been
The ship’s flag State law and the seafarers’ contract must be reviewed to determine
procedures that must be followed when dismissing a seafarer and the
remedies that are available to a dismissed seafarer. Common contract and statutory
provisions prescribe that only a shipmaster can dismiss a seafarer and that a
seafarer cannot be dismissed for a trivial offence. There are usually requirements
for informing the seafarer of the grounds for dismissal, an opportunity for the
seafarer to respond to the charges, and for entering a record of the dismissal in
the ship’s log. Usual grounds for dismissal include drunkenness, going ashore
without leave, disobedience, fighting, theft, and conviction of a serious crime.
If the legal or contractual requirements for dismissal are not followed, the dismissal
is illegal and the seafarer so dismissed may be entitled to remedies such
as payment of wages that would have been earned to the end of the contract or
other specified remedies. The laws and contracts sometimes also provide for
compensating seafarers when their contracts are legally terminated through no
fault of their own.
Dismissal for incompetence is treated very differently in various contracts and
laws. For example, under US law incompetence is not considered misconduct
and the master has the option to continue the seafarer’s service in a lower position
on the ship. Liberian law allows dismissal for incompetence only in situations
where the seafarer has misrepresented his qualifications. The IBF and ITF contracts
do not specify incompetence as a ground for dismissal. The POEA contract,
on the other hand, treats incompetence as misconduct requiring dismissal and
suspension for at least two years.