Monday 01 August 2006 -1- T M L C 2005 - - M E C 10 F A Q

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					Monday, 01 August 2006


                           10 FREQUENTLY ASKED Q UESTIONS *
                                            Okay, maybe not frequently asked, but they should be.

Q1. All my employment contracts specify that the law of the country where my
organisation is incorporated will apply. Will I ever find myself in a foreign court?

A. Potentially, yes. In the UK, for example, the Contracts (Applicable Law) Act 1990 states
that employment contracts are treated differently than other contracts when i comes to the
law that governs them. So, British seafarers, since they do not work in any one country, are
entitled to the law of the country “in which the place of business through which he was
engaged is situated”. So, if you are using an agent in the UK to approach seafarers domiciled
in the UK and formalise employment contracts with them, these employees could insist that
their contracts be governed by English or Scots law.

Q2. So who ultimately has the authority to decide what court has jurisdiction over my
employment contracts?

A. Deciding which court ultimately has jurisdiction is up to…well, that very court! Each
court throughout the world is responsible for following the law which it applies, in
determining whether it has power to decide a case and whether it must dismiss it. Every
country in the world has its own law of jurisdiction determining when its courts have power
to judge cases. In some countries (such as Germany, Australia, and the United States) there
are many different sets of rules determining when courts have jurisdiction. In addition there
are international agreements on jurisdiction such as the Brussels Convention for the European
Union and the Lugano Convention adding Iceland, Liechtenstein, Norway, and Switzerland.
Figuring out which jurisdiction will apply to your employees can be tricky, and it is best to
consult Sach Solicitors to discuss your particular situation.

Q3. How can I ensure that I control the employment law that applies to my seafarer
employees whe n I recruit within the European Union?

A. Expressly state your requirements on jurisdiction in your employment contract. In the
European Union, the Brussels and Lugano Conventions will apply. European legislation now
applies in the countries which joined the EU on 1 May 2004, most notably Malta, Cyprus, and
the three Baltic States.* Under Article 21 of the Brussels Convention, when an employee is
given the right to sue in any jurisdiction, that provision will stand. Alternatively, if either the
employment company or the employee is domiciled in the EU, then an employment contract
agreeing to jurisdiction is effective under Article 23 of the Brussels Convention.

Without a written agreement on which courts apply, controlling the applicable law within the
EU can be difficult. The Brussels and Lugano Conventions have special provisions dealing
with employment agreements. The key provision is that an employer domiciled in an EU
Member State can always be sued in that Member State . (Article 19(1)).

Monday, 01 August 2006

Even more extreme is the requirement that, if an employer sues the employee, the employer
must sue in the Member State where the employee is domiciled. However, if an employer is
serving a counter-claim against an employee’s claim, e.g. for wages, the employer can file the
counter-claim in the same jurisdiction.
* The ten new Member States are Cyprus, Czech Republic, Estonia, Hungary, Latvia,
Lithuania, Malta, Poland, Slovakia, and Slovenia.

Q4. If our company is incorporated in one EU country, where we also have our
principal offices, e.g. Cyprus, can we be sued in a different EU country even though our
employment contract requires all disputes to be brought in Cyprus?

A. Possibly. Your company can be sued in an EU country “where the business which
engaged the employee is or was situated” (Article 19(2)(b)). Although this has not yet been
interpreted by the European Court of Justice, it is likely to mean that if your company recruits
an employee through an agent in a Member State, e.g. England, that employee will have the
right to sue you in England.

However, if an EU employer does not “engage” the employee through a business in another
EU Member State, then the employer can generally be sued only in the country in whic h it is
registered if it has no offices in another EU Member State. The best way to avoid being sued
in different jurisdictions, is to give the employee the right to sue exclusively in the employers
named jurisdiction.

Q5. What if the employment company is domiciled outside the EU altogether? Can it
be sued inside the EU?

A. There are three ways: (1) If the company has a branch or agent inside the EU; (2) if the
company engaged the employee through a business in an EU State; or (3) if the courts in the
EU State where the employee sues decide they have jurisdiction, for some other reason.

Branch or agent. First, i a company is domiciled outside of the EU altogether, then the
company can be sued in any EU Member State where the company has an agent, branch
office, or is otherwise established. (Article 18(2)). This is because, for purposes of
jurisdiction, having an agent or branch in an EU State is considered sufficient to satisfy that
State’s domicile requirements .

“Engagement” in the EU. If an employer “engages” the employee through a business in the
EU, then the courts of that EU State, where the employee was engaged, will have jurisdiction.

Member State’s courts can decide for themselves. For employment companies having no
branch o agent in the EU, if they are sued in the courts of an EU Member State, that
particular Member State’s law of jurisdiction will determine whether its courts will hear the
case. (Article 4).

For example, if the employer is a Russian company and a Latvian master sues in a Latvian
court, then Latvian law on jurisdiction will determine whether the Latvian court has
jurisdiction. In that situation, the best thing would be to consult a Latvian lawyer. If the
master is not a Latvian national, but is domiciled there, he has the right under the Brussels
Convention to be treated by the Latvian court as a Latvian national for purposes of

Monday, 01 August 2006

Most importantly, all of these scenarios can probably be avoided if the employer concludes
an agreement with the employee in which the employee only has the right to sue in a single
named court.

Q6. When would the International Labour Organisation’s draft Maritime Labour
Convention apply to my recruitment business?

A. There are two ways:

    •   If you carry out recruitment activities in the territory of a country which ratifies the
        Maritime Labour Convention, you would have to meet the requirements of the

    •   Also, if a ship’s Flag State joins the Convention, the Flag State will have to create
        laws requiring a recruitment company providing crew to ships registered under their
        flag to follow the rules of the Convention.

This means that a recruiter will need to be aware not only of any regulations created in its
country of operation as a result of the Convention, but also in the Flag States of the ships for
which the recruiter is employing crew. This could potentially subject a single company to the
recruiter regulations of numerous countries.

In practice, a more or less customary international standard is likely to predominate. The
Convention States that those countries which join should advise their nationals about any
problems of signing onto a ship flying a non-Convention flag if that Flag State is perceived to
have lower standards.

Q7. What would the requirements of the draft Maritime Labour Convention be with
regard to my recruitment business?

A. The draft Convention will require that countries who agree to be bound by the
Convention, to establish a system of regulation for seafarer recruitment. The purpose is to
“[promote] seafarers’ employment rights”. The system of regulation would require the

    •   Prohibit means, mechanisms or lists intended to prevent or deter seafarers from
        gaining employment for which they are qualified;

    •   Require that no fees are payable by the seafarer (other than the cost of getting a
        medical certificate, the national seafarer’s book, and a passport – but not the cost of

    •   Ensure that recruitment services:

            o   Maintain a register of seafarers recruited to be available for inspection by the

            o   Maintain a record of each seafarer’s employment, adequate for future work
                and promotion;

            o   Make sure that seafarers know their rights and obligations before being
                engaged, that they see a copy of the employment agreement before and after
                they sign, and that they receive a copy;

Monday, 01 August 2006

           o   Verify qualifications and necessary documents and that the employment
               meets any regulation and trade union agreements;

           o   Make sure (as far as possible) that the shipowner can prevent stranding in a
               foreign port;

           o   Examine and respond to any complaint and advise the authorities of
               unresolved complaints;

           o   Forward to the authorities complaints regarding working or living conditions
               on board ship; and

           o   Establish a system of protection (for example, insurance) to compensate
               seafarers for loss resulting from failure of the recruiter or shipowner to meet
               its obligations.

Again, there are two potential sources of this regulation – either the State in which the
recruiter operates, or the Flag State of the ship for which the recruiter is providing crew.

Q8. What are the other requirements of the draft Maritime Labour Convention?

The draft Convention contains many requirements. Among these requirements would be the

   •   Ensuring each seafarer receives an employment contract;

   •   Minimum age requirements for employees (16) and for night work (18);

   •   Ensuring seafarers have current certificates of medical fitness;

   •   Ensuring seafarers have certificates to perform dutie s for which they are hired;

   •   Maintenance of a record of seafarers’ employment;

   •   Regular payment of wages;

   •   Maximum number of hours of work (14 hours in any 24-hour period and 72 hours in
       any seven-day period) and minimum hours of rest (10 hours in any 24-hour period
       and 77 hours in any 7-day period);

   •   Entitlement to leave (at least 2.5 calendar days per month);

   •   Ensuring the right of seafarers to be returned home at the end of their employment

   •   Ensuring decent accommodation and recreational facilities, including adequate size of
       rooms, heat, ventilation, noise and vibration limitation, sanitary facilities, lighting,
       and hospital accommodation (when required);

   •   Ensuring safe and hygienic living and working environments on board ship;

Monday, 01 August 2006

    •   Ensuring inspection of ships at the time of registration, re-registration, and alteration
        of the ship;

    •   Ensuring sufficient quantity and quality of free food and drinking water, taking into
        account the seafarers’ cultural, religious, and gastronomic needs;

    •   Ensuring qualifications of seafarers responsible for food preparation;

    •   Ensuring adequate medical care on board ship and access to available medical and
        welfare facilities ashore;

    •   Requirements that shipowners defray the expense of medical care, disability, and
        burial in the case of death;

    •   Establishment of health, safety, and accident prevention requirements on board ship ,
        including reporting, review, and investigation of accidents and procedures for
        improvement of safety measures;

    •   Unemployment benefits in case of loss or foundering of the ship;

    •   Adequate manning levels for safety; and

    •   Inspection of ships for monitoring of compliance by both Flag States and port states.

This list is not complete, but refers to the most important areas in which the draft Convention
will create requirements, enforced primarily by the Flag State of the ship, and in some cases
by subjecting the vessels to inspection by Port State Control in other countries..

Q9. How do I know whether the draft Convention’s require ments will apply to my

A. Most of the requirements in the Convention already exist in international treaties which
have been approved by the International Labour Organisation over the years. However, some
countries have not passed those treaties into law. So, an ongoing check will have to be
maintained to monitor which countries have agreed to comply with the Maritime Labour
Convention and have incorporated it into their law. It is the incorporation into each country’s
law that will dictate the extensive requirements for Owners, recruiters and employment

For now, you have two options for your business: (1) Wait and see whether the rules will
apply, or (2) organise your business to meet the standards which will be likely to apply and so
avoid detention of your vessels. The best way to create a compliance plan is to contact Sach
Solicitors who can give you advice on where your business fits into the web of international,
regional and national regulations as well as the trade union structure.

Monday, 01 August 2006

Q10. Will the ‘Blue Card’ be replaced?

A. The Convention makes no mention of the ‘Blue Card’. Instead it will require a maritime
labour certificate, which is valid for 5 years, and a declaration of labour compliance (which
sets out the national requirements of the Flag State implementing the Convention) to be
posted on board. These together will certify that the ship is in compliance with the

And one extra:-

Q11. What is the best way to be certain about what law applies to my seafarer
employment contracts?

A. You already know the answer – consult Sach Solicitors!

This document was produced by Sach Solicitors as a document to generally inform our
Clients – it should not be construed as legal advice. For more information about the topics
discussed in this document contact us:

                                        Albion Mills
                                    18 East Tenter Street
                                          E1 8DN

                                  T: +44 (0)20 7680 1133
                                  F: +44 (0)20 7680 1144

Laurence McFadyen, Partner    
Kevin Sach, Partner           

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Sach Solicitors is regulated by the Law Society of England and Wales.