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Unpaid crew wages. Seafarers legal rights Shipping Poonam Sharma Baloni | Legal Researcher and Market Analyst 08 July, 2015

In recent times it appears that seafarers are one of the most exploited and abused group of workers globally. Exploitation, abuse and corruption in the shipping industry also include issues related to unpaid, underpaid or delayed payments, which are the most pressing ones.

In many cases seafarers just wait in anticipation each month for their salary or wages to arrive in their nominated account and that salary or wages never comes. They also fear for losing their jobs or not getting a ship for future employment, so they do not raise their voice against their employer.

Seafarers have their legal rights and should not shy away from the same. A crew or seafarers of any nationality can arrest a ship for unpaid or underpaid wages if the ship is found within Indian territorial waters within twelve nautical miles from the Indian shore.

A seafarer or a crew member can invoke the admiralty jurisdiction of the High Court having such jurisdiction and arrest a ship for unpaid wages. An order of arrest of the ship can be obtained from the court having admiralty jurisdiction, preferably from the Bombay High Court, as this court has pan-India ship arrest jurisdiction, and arrest the ship anywhere in Indian territorial waters. The seafarer, who may or may not be an Indian citizen, can initiate action for the arrest of a ship in India even though the ship may be registered anywhere in the world or maybe flying any flag.

Crew claim for unpaid wages should be initiated within the three year period from the due date and if the seaman has died while he was a serving seaman, the period from the date of his death to the date on which his next of kin were first informed of his death shall be excluded. The documents that need to be produced in court are the appointment letter and/ or the agreement or the employment contract; copy of the passport showing the sign on and the sign off dates; continuous discharge certificate (cdc) showing the capacity of the crew and the sign in and sign off dates; account of wages and/or wage slips; correspondences exchanged demanding unpaid wages directly and/or through the master of the ship; power of attorney/ letter of authority, this need to be notarised and apostilled at the location where the power of attorney is executed. Each crew claim is a separate cause of action and should there be more than one crew’s wages that remain unpaid, they cannot be clubbed. Each crew will have to file a separate suit under the admiralty jurisdiction.

At the time of filing of the suit, there is a court fees payable depending on the total claim amount. There are also other expenses that are involved, such as solicitors’ professional fees, photocopy charges and other misc expenses.

In most cases the owner of the ship or any person having a ship interest settles the dispute out of court. If there is no out of court settlement the crew has a right to make an application to the court for the auction sale of the ship pending the suit but cannot withdraw or encash the sale proceeds at interim stage, but would be entitled to withdraw or encash the sale proceeds of the ship after obtaining a decree from the court.

The crew has the following rights on unpaid wages:
1. Obtain an order of arrest of the ship or a sister ship anywhere in the world subject to the ship being in territorial waters.
2. Initiate a civil suit at the appropriate jurisdiction
3. Claim under section 19 of the Workmen’s Compensation Act 1923 at the appropriate jurisdiction
4. Claim before the Magistrates Court at the appropriate jurisdiction

In Epoch Enterrepots v M.V. Won Fu, the Supreme Court of India held that right to a part of property in the res and a privileged claim upon a ship, aircraft or other maritime property remains attached to the property travelling with it through changes of ownership. It is also acknowledged that it detracts from the absolute title of the 'res' owners. The Supreme Court of India in the case of O. Konavalov vs Commander, Coast Guard Region held that ‘the seamen's right to his wages have been put on a high pedestal. It is said that a seamen had a right to cling to the last plank of the ship in satisfaction of his wages or part of them as could be found. The right to wages for a seamen is the same as for any other wages of any employee and is an integral part of the right to livelihood, entitled to protection under Article 21 of the Constitution of India.

A maritime lien for seafarers’ wages, like any other maritime lien or maritime claims, can be enforced by invoking admiralty jurisdiction and obtaining an order of arrest from a High Court having admiralty jurisdiction.

Claims can also be filed in the magistrates Court under section 145 of the Merchant Shipping Act 1958 that reads as:

145. Summary proceedings for wages.—

1. A seaman or apprentice or a person duly authorised on his behalf may, as soon as any wages due to him become payable, apply to 1 [any Judicial Magistrate of the first class or any Metropolitan Magistrate, as the case may be,] exercising jurisdiction in or near the place at which his service has terminated or at which he has been discharged or at which any person upon whom the claim is made is or resides, and 2 [such Magistrate] shall try the case in a summary way and the order made by 2 [such Magistrate] in the matter shall be final.

2. An application under sub-section (1) may also be made by any officer authorised by the Central Government in this behalf by general or special order.

Seafarers or the crew member can also initiate proceedings in the Office of Commissioner of Workmen’s Compensation for compensation against an Indian manager and/or shipowner. Any amount deposited with the officer of the Workmen’s Commissioner can be remitted to the dependants of the seafarer who are located in a country other than in India.

The International Conventions on Maritime Liens and Mortgages 1993 and 1967 have the force of law in India and under these conventions a maritime lien for wages includes wages and other sums due to the master, officers and other members of the vessel's complement in respect of their employment on the vessel, including costs of repatriation and social insurance contributions payable on their behalf.

Section 139 in The Merchant Shipping Act, 1958 provides the Right to recover wages and salvage not to be forfeited — a seaman shall not by any agreement forfeit his lien on the ship or be deprived of any remedy for the recovery of his wages to which, in the absence of the agreement, he would be entitled, and shall not by any agreement abandon his right to wages in case of loss of the ship or abandon any right that he may have or obtain in the nature of salvage, and every stipulation in any agreement inconsistent with any provisions of this Act shall be void.

A seaman making a claim for unpaid wages should have worked on the ship. The rationale is that wage lien arises from the service rendered to the ship. Further, the Indian Merchant Shipping Act 1958 provides that a seaman shall not be entitled to wages for any period during which he is absent without leave from his ship or from his duty.

Maritime Liens for wages take priority over other maritime liens such as loss of life and personal injury or damage caused by the ship. It appears that the maritime lien for salvage takes priority over the maritime liens for wages, albeit there is no precedent on this point. Maritime liens set out in article 4 shall take priority over registered mortgages, ‘hypothèques’ and charges. A seafarer would have a maritime lien over the ship on which he was working irrespective of his contractual counterparty in his contract of employment.

The Maritime Liens and Mortgage’s Convention 1993 provides that maritime liens may be extinguished after a period of one year unless, prior to the expiry of such period, the vessel has been arrested or seized, such arrest or seizure leading to a forced sale. However, under the Indian Limitation Act 1963 the limitation period for a claim for wages is three years from the time of the end of the voyage during which the wages are earned. Indian courts have not dealt with a case in relation to the extinguishment of a maritime lien after a period of one year. It could be argued that a maritime lien for wages is recognized for a period of three years.

A maritime lien is extinguished with the destruction of the vessel or property, or laches (undue delay in enforcement), or is discharged by payment or judicial act. A maritime lien would be extinguished when the intention of the owner of the vessel is no longer to deploy the vessel for navigation and the vessel has been imported into India for the purpose of demolition/ ship recycling.

If the seafarer or the crew has suffered injury on board the vessel or their wages remain unpaid they have legal rights as was held in English court as below:

Cama v CKP Fishing Company Ltd [2004] FJHC 349; HBC0205D.2003S (24 February 2004) Seafarers- Action for negligence for injuries suffered on board vessel limited by Limitation Act. Plaintiff suffered severe frost bite injuries to fingers as a result of working in a freezer on a vessel where defendant supplied no safety gear such as insulated gloves. Plaintiff first filed a notice under the Workers Compensation Act, but had no progress in 3 years. The plaintiff filed a motion to seek leave of the court to extend the 3 year time limitation under the Limitation Act in order to sue the vessel owner for negligence. In this case the motion was dismissed and was held that the plaintiff’s action could not fit into a situation where the court could exercise its jurisdiction to extend time, although this was through no fault of the plaintiff.

Captain & Crew of the MV Voseleai v Owners of the MV Voseleai [1994] FJHC 4; HBG0006j.1994s (28 October 1994). Seafarers - Action in rem for wages of crew- Security for release of vessel. The vessel sailed from Honiara to Suva for repairs. 10 months after her arrival the Master and crew issued an action in rem claiming unpaid wages and allowances. The owner of the vessel issued a motion seeking discharge of the arrest warrant and alleging that actions of crew were illegal and in breach of the Shipping Act. In this case the action by the crew was proper and the court had jurisdiction; there was an order to release the vessel upon payment of a F$25,000 bond. The Court determined that the Supreme Court Rules and British Admiralty precedent supported an action in rem for the wages of the crew on that vessel. As to the release of the vessel, the Court found that the res must be released upon receiving security for the plaintiff’s claim. The plaintiff is entitled to demand such an amount as security as would cover his reasonably best arguable case, and once an application for release of a vessel is made, it is incumbent on the plaintiff to quantify that amount.

Dorval Tankship Pty Ltd v Department of Finance [1997] FMSC 24; 8 FSM Intrm. 111 (Chk. 1997) (1 July 1997). Seafarers- Employers may assert the rights of the crew when seeking declaratory judgement of salary taxes. The Plaintiffs are time charterers of an ocean-going petroleum tanker. They filed a Complaint for Declaratory and Injunctive Relief alleging that the defendants were attempting to assess and levy FSM gross revenue taxes upon them, and wage and salary taxes upon the vessel’s crew. The plaintiffs had received notice from the defendants that they were liable for gross revenue and wage and salary taxes upon the vessel’s crew. The defendant filed a motion to dismiss, contending that the complaint attempts to assert the rights of persons, the crew, who are not parties. In this case the Motion was denied and the court had held that the plaintiffs are asserting their own rights. If the crew is subject to FSM wage and salary taxes, the plaintiff would be liable to the obligations and liabilities of an employer, and failure to perform these obligations would expose the plaintiffs to civil and criminal penalties.

Metutera v Kiribati Shipping Services Ltd [2007] KICA 16; Civil Appeal 07 of 2007 (30 July 2007). Seafarers- contract of employment- interpretation- right to be heard before dismissal by the Board. The seafarer appealed a decision whereby his dismissal by the Board was upheld by the Court. The contract of employment stipulated that the employee had a right to be heard before a suspension. In this case the Appeal was allowed and it was held that the Board reached its decision to dismiss the Appellant without giving any notice that dismissal was being considered and without hearing the appellant in person or without giving him the opportunity to make submissions in writing on whether he should be dismissed. The contract provided that the employee would be given the right to be heard if a suspension was contemplated and the Appeal Court held that such a term would be implied where a dismissal was being considered by the Board.

Momoivalu v Nauru Air & Shipping Agency [1992] FJHC 5; Hbc0819j.85s (13 May 1992). Seafarers- Maritime Torts- Negligence- Duty of care owed by the vessel owner to crew members on a vessel does not include preventing unprovoked attack on one crew member by another. The plaintiff claimed damages suffered as a result of an assault committed on him by a fellow employee of the defendant agency. The assault occurred on a vessel where the plaintiff and assailant were employed as crew members. The plaintiff claimed that the assault was committed by the agent or servant of the defendant in the course of his employment. He also claimed that the owners of the ship neglected to provide adequate security for the welfare of the plaintiff on the ship. In this case the claim was dismissed and it was held that the unprovoked assault on the plaintiff by a fellow crew member was not committed in the course of the assailant’s employment. As to a duty owed by the defendant to the plaintiff to provide adequate security and to ensure the safety of the plaintiff the court found that it was not a case of faulty equipment or dangerous work; the assailant was not a stranger allowed on board through a lack of security measures; and there was no evidence of hostility between ethnic groups among the crew members, nor was it suggested that the assailant had a known propensity for violence and unprovoked assault.

Robert v Sonis [2002] FMCSC 7; 11 FSM Intrm. 031 (Chk. S. Ct. Tr. 2002) (19 June 2002. Seafarers- claims for seaman’s wages are maritime cases. The Plaintiffs are seamen and port operators in the employ of the Chuuk State Department of Transportation. The Plaintiffs claimed hazardous pay from the Defendant. The Defendant filed a motion to dismiss contending that the cases sounded in admiralty and maritime law, and therefore were in the exclusive jurisdiction of the Supreme Court of the Federation of Micronesia. In this case the motion was allowed and it was held that cases involving claims for wages by seamen are maritime cases. Article IX 6(a) provides that the Supreme Court has original and exclusive jurisdiction in admiralty and maritime cases.

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