Compensation Entitlements under Contract and Law
In the event of death or long term disability due to a work- related illness or injury, it is usually the ship owner that must provide compensation. This liability starts from the beginning of the employment contract until the seafarer has been repatriated, or until he/she can, for example, claim medical benefits under an insurance or compensation scheme. How and to what extent ship owners must provide compensation is set out in national law, the employment contract and any CBA if applicable.
Due to the global nature of shipping, seafarers also have special protection under international law in the case of death and injuries at sea. The ILO Maritime Labour Convention 2006 (MLC) in particular seeks to ensure that seafarers are protected from the financial consequences of sickness, injury or death occurring whilst they are employed on board a ship. Under the MLC, ship owners must have financial security for compensation in such an event to cover, for example, the expenses of medical case and treatment; food, accommodation and wages for a specified time or the cost of burial services. From January 2017, this also includes financial security to ensure compensation for contractual claims for death and long term disability. This means that all ships that are subject to the MLC must have certificates issued by an insurer or other financial security provider confirming that insurance or other financial security is in place to cover the ship owner’s liabilities, and also for contractual claims arising from seafarer personal injury, long terms disability or death.
Compensation Challenges for Seafarers
Regardless of the protections set out in national and international law, there are unique aspects of the working lives of seafarers that place them at a great disadvantage in their ability to obtain proper compensation.
- National schemes for compensating injuries and death, for example, vary widely. Some countries deal with the issue through social security schemes and/or workers compensation schemes; in other countries, this is covered by employment contracts or collective agreements negotiated by the unions; and in addition, national legislation in some countries provides for remedies in tort and for negligence. The value of a claim therefore can vary widely depending on the circumstance of the injury or death, and also depending on where a claim is pursued.
- P & I insurers working on behalf of the ship owners can actively participate (through the use of representatives and lawyers worldwide) at an early stage to prevent claims being pursued, or they could attempt to settle claims at less than the legal entitlement of the claimant. If the seafarer is unable to afford a lawyer, or there is no longer any income because the seafarer is injured or deceased, such tactics might prevail.
- If a ship owner operates without insurance or other form of financial security, then given the structure of the ownership of most vessels, the prospect of recovering proper compensation is very limited.
- It might become necessary for the seafarer or their dependents to resort to litigation to get compensation. The unique nature of their profession adds further complexity to this process. Any accident is likely to involve more than one jurisdiction – including the flag law, the law of the place of the accident, and/or the law governing the seafarer’s contract. The difficulties therefore of establishing where and when to sue, if necessary to do so, mean that access to justice can be denied by a series of legal doctrines and principles such as limited liability, periods of limitation, forum non conveniens and other forms of declining jurisdiction.
Avoiding Compensation Issues
Firstly, seafarers should do their research and only sign up with reputable ship owners who are more likely to have adequate insurance cover and be able to provide compensation. As with many cases regarding seafarers’ rights, we recommend that seafarers ask for and check their employment contract to ensure liability and compensation is clearly covered in terms of entitlements in the case of illness, injury, disability or death. If you are unsure, or if the contract is unclear, you should ask for clarity from the ship owner or seek advice from a union representative or legal professional with experience in the maritime sector.