The Malta flag boasts the largest ship registry in Europe and the 6^th largest in the world. This means that a large number of the world’s fleet are crewed by persons whose employment must satisfy the standards provided for under the Maltese regulations.

Malta incorporated the 2006 Maritime Labour Convention (MLC) by means of Subsidiary Legislation 234.51 entitled the ‘Merchant Shipping (Maritime Labour Convention)’ (The Rules), in 2013.

This article will discuss the shipowner’s obligations in relation to the repatriation of crew and will look into the application of financial security in cases of abandonment.

Seafarers Employment Agreement:

Under Article 20 (1) of the Rules, it is the obligation of the owner of every Maltese ship to enter into a seafarer’s employment agreement (SEA), stipulating the terms and conditions of his employment.

The definition of Owner is provided within the Rules as:

‘the owner of the ship or another organisation or person such as the manager, or the 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 these rules.’

The Rules lay out the form in which an employment agreement must be drafted. They stipulate that the agreement must be signed by the shipowner, before a seafarer signs his name. An SEA must include the date and place at which it is made, the surname and other names of the seafarer, his birthplace, age or date of birth and must contain a number of other particulars listed in Article 21(2) (a)-(l).

The Rules require the SEA to be sufficiently detailed in order to protect the seafarer, traditionally viewed to be in a less advantageous position when compared to the employer. In fact, the Rules require the SEA to be signed by both the shipowner and the seafarer, where the shipowner, recruitment agency or master must have the agreement read over and explained to the seafarer, obliging them to ascertain that the seafarer has understood the contents of the agreement before signing it and also obliging them to attest to each signature. The Agreement must also be signed in duplicate, with a copy given to the seafarer.

The Rules make clear that any term found in the SEA which goes against a provision of the Rules, will be considered to have no effect, and the relevant provisions under the Rules will be deemed to apply. The Rules extend the validity of the Agreement in cases where a seafarer is held captive on or off the ship as a result of acts of piracy or armed robbery, irrespective if the date for its expiry has passed or either party has given notice to suspend or terminate the agreement.

Furthermore, any amendments to the SEA must be done in writing and are considered ‘wholly inoperative’ unless proved to have been made with the consent of all parties. Amendments must be attested to by 2 witnesses.

Obligations to Repatriate

Under Article 73 of the Rules, the Shipowner is obliged to repatriate a seafarer in accordance with the conditions set out in the employment contract. Where a seafarer has served the maximum duration of service periods on board, such periods being of less than 12 months, they shall be entitled to be repatriated at the cost of the owner.

However, in cases where a third party is exercising an executive title against the ship and the shipowner has defaulted in his obligations towards the seafarer in respect to repatriation, or other expenses that may be owed to the seafarer, the cost of repatriation will be at the expense of the third party exercising said executive title.

Where the termination of service occurs at a foreign port, the Shipowner must make adequate provisions for the seafarer’s return to a proper return port. If the master as owner’s representative fails to do so, if the expenses of maintenance and of the journey to the proper return port are paid by the seafarer, these will be recoverable as wages due to him, if paid by any such seafarer or any other person, the costs will be considered a charge on the ship and by also be recovered against the owner at the suit of the person who paid the expense.

Obligations of provision of financial security

Cases of Abandonment

Article 74A of the Rules imposes upon the shipowner the obligation to have on board a certificate of financial security issued by a financial security provider which is to cover a number of costs in cases of abandonment by the shipowner.  A seafarer is considered to have been abandoned where the shipowner fails to cover the cost of the seafarer’s repatriation, has left the seafarer without necessary maintenance and support or has unilaterally severed ties with the seafarer including failure to pay contractual wages for a period of at least two months.

Coverage under the certificate of financial security is limited to the following items: the cost of outstanding wages and other entitlements that may be due from the shipowner to the seafarer under their employment agreement or CBA or the Rules, up to 4 months of any such outstanding wages and 4 months of any outstanding entitlements; all expenses reasonably incurred by the seafarer including costs of repatriation; and the essential needs of a seafarer including adequate food, clothing, accommodation, drinking water supplies, essential fuel for survival on board the ship, necessary medical care and any other reasonable costs or charges from the act or omission of abandonment until the seafarer’s arrival at home.

The Rules clarify the minimum standards of repatriation. The cost of repatriation must cover travel by appropriate and expeditious means, normally by air, and include provisions for food and accommodation of the seafarer from the time of leaving the ship until arrival at the seafarer’s home, necessary medical care, passage and transport of personal effects and any other reasonable costs or charges arising from the abandonment.

The Rules provide that where the provider of the financial security has made any payment to any seafarer under these provisions, it shall acquire by subrogation, assignment or otherwise, up to the amount paid, the rights the seafarer would have enjoyed. This Rule makes clear that in cases of abandonment, the seafarers can turn to the financial security provider for payment directly.

The law seems to encourage the payment of wages and other sums due to the master, officers and other members of the vessel’s complement, including repatriation costs and social security contributions, by providing the payer with a special privilege which can be exercised against the vessel under Article 50(h) of the Merchant Shipping Act.

In a case against the vessel M.T Phaedra Bright -1[1], the P&I Club American Steamship Owners Mutual Protect and Indemnity Association, Inc was forced to step in to cover among other things the cost of crew wages, repatriation of crew members and necessary supplies under the system of financial security under S.L 234.51 after the owners of the vessel Phaedra Bright-1 defaulted in their obligations. Upon request of the plaintiff company, the court ordered the pendente lite sale of the vessel in order to satisfy the debt of the plaintiff that amounted to almost EUR400,000.

How can we help?

Should you require any further information or assistance on the matter, please do not hesitate to reach out to us personally on martina.farrugia@fenechlaw.com

©Fenech & Fenech Advocates 2022

Disclaimer │ The information provided in this article does not, and is not intended to, constitute legal advice. All information, content, and materials available are for general informational purposes only.  This article may not constitute the most up-to-date legal or other information and you are advised to seek updated advice.

[1] See Dr Abigail Bugeja nominee vs the vessel M.T. “Phaedra Bright -1” Sworn Application no 19/2019MCH dated 14 February 2019