Crew Contracts: Read the Fine Print

19 March 2009 By Benjamin Maltby

As the Med season gets under way next month, many of you will be thinking of new positions, or perhaps be coming to the superyacht industry afresh. Either way, sooner or later, a contract of employment will be plonked down in front of you with the instruction to “sign here”. So, should you?

Let’s start with a couple of clear facts:

Firstly, there are still idiots out there who are happy to do more than casual dayworking without a written contract of employment. If and when you get stiffed and don’t receive the money you thought you were entitled to, without a contract in place there’s little or no recourse.

In my experience, it’s the owners/managers/captains who don’t bother with contracts that are far more likely to stiff crewmembers. They’re just less bothered with formality, paperwork or liabilities.

Secondly, if you sign whatever is put down in front of you rather than taking it away, reading it fully, and preferably seeking professional advice on it, then your employer may think you’re a dupe from day one and take advantage of this later.

The place to start is at the end, with the “Law & Jurisdiction” clause. This may or may not be the same as the flag state. It’s crucial, as many laws automatically provide employees with a raft of rights. The jurisdictions of small island states may not have an efficient (and so, cheap) employment tribunal established. The most favourable is that of England, as European Union law provides a wide range of rights, yet the contract will be intelligible. Employment law in the U.S. gives workers far fewer rights than some in Europe would be used to or comfortable with.

Then turn back to the beginning:

Who is your employer going to be? If it’s an owning company with no other assets than the yacht, if the vessel should be repossessed or the company runs out of money, then you could be left high and dry. You may not have an option, but if you can be employed by the boss directly, or by one of the boss’s land-based companies, rather than by an owning company, then so much the better.

Are your working hours said to be limited? Is that limit fair? Is it practical? Is it legal? (The governing law and relevant flag state will affect this.) Will it force you to break the law, incur criminal liability and potentially lead to your being liable for parking the yacht on the rocks through tiredness?

Are the grounds for instant dismissal too wide? Could they give your employer grounds for firing you because – in reality – the owner just feels like a change? This is happening all the time, and it always surprises me how quickly good relations with the boss can sour.

Is the probationary period – during which instant termination by either side is normally allowed to make for a cooling-off period – unreasonably long?

Do you have a right to be repatriated after your employment is terminated, or at least repatriate yourself and recover the cost of your flight(s)? There are international legal conventions covering minimum rights – but so often these are ignored.

Will you be allowed study leave on the boat’s time, or will this come out of your hard-earned vacation time?

If you’re not the captain, should you have a formal crew agreement? Many Red Ensign flag states require this, and it must be approved each time by the flag state as containing certain minimum legal employment rights. Yet normally, this requirement is ignored.

Does the agreement contain a confidentiality clause that has been drawn so tightly that it’ll be difficult to get the proper advice later in the event of a dispute?

The best option – especially for captains seeking a long-term relationship directly with an owner (which might lead to working on a number of different yachts in the same ownership or as a build captain) – is to invest in having the contract reviewed by a lawyer. Even in today’s market, you may or may not want to haggle over the salary, but you should never be afraid to haggle over other terms. Owners have nothing but respect for this no-nonsense approach; it will show a triumph of detail over greed on your part.