Those with the resources to purchase a yacht large probably already know a thing or two about employing people, but employing seafarers is not as straightforward as taking on shore-based staff.
Given the size and complexity of todays larger yachts, sailing one without an experienced, professional crew is not an option. Most owners are not sufficiently qualified to take the wheel of their own vessel. In fact, to do so could lead to insurance cover being withdrawn if there is an accident. Employing experienced crew is not cheap, and payroll usually forms the largest proportion of a yachts running costs. Crew agencies can provide suitable candidates, normally taking a months salary as commission, but do not normally act as employer.
Crew employment contracts
While crew members on private yachts may be employed or taken on as self-employed contractors, the presumption in law is that they are employees, unless the contract under which they serve states otherwise.
Given the degree of seafarer regulation, however, the only practical difference such status makes is with regard to liability to pay taxes (if any) and the law relating to leave and dismissal.
The Maritime Labour Convention 2006 (MLC) covers all chartered yachts, and does not make the distinction between those employed and self-employed. The Convention mandates all kinds of contract terms, including hours of work, leave entitlement and repatriation. Crew conduct is also governed by the captains standing orders.
However, seafarers employment contracts differ from those used ashore and taking specialist advice is imperative.
Crew rights to payment
Crew services are usually seen as being supplied not only to the employer, whoever that may be, but also to the yacht itself. This principle, widely recognised in international law, usually gives crew a right to arrest the vessel they have been working on if their wages arent paid. Whether they actually can depends both on the yachts flag and the location of the yacht at any given time. Other yachts in the same ownership can also sometimes be arrested.
The captains position is unenviable. Once taken on they, and not the owner or charter guests, are in charge and responsible for the behaviour of all on board. Standing orders can and should cover not only crew but, diplomatically, the owner and guests as well.
As an employer you owe your staff a duty of care, notwithstanding that they might be better qualified and more experienced than you. It is also difficult to know whether what you propose to pay is reasonable and whether you have found the right people for the job(s).
These issues are often sidestepped by contracting with a captain on a self-employed basis and leaving all other hirings to the captain, with funds being provided as required.
The Captains role as manager
The captain of a yacht, for which shore-based management is not compulsory, is often employed as both the master and manager of the vessel.
Many captains incorporate themselves into companies for this purpose. This can provide a neat solution but there must be stringent provisions in place to ensure that the captain accounts accurately for all expenditures.
The nature of the contract between owner and captain becomes key to ensuring that regulatory obligations are fulfilled. It is not wise, however, to assume that your captain will know everything there is to know about the regulation of your yacht.
A minority take a cavalier attitude towards paperwork and dont see the need to keep pace with sometimes rapidly changing regulations. Particularly where the yacht is chartered, to ask a captain alone to keep up with safety regulations, which are second in volume only to aviation, can be unreasonable.
There will always need to be at least some form of shore-side assistance. By law, lists of crew must normally be lodged ashore so that if the yacht is involved in a serious incident, rescue services will know how many people to look for. In spite of the need to maintain confidentiality, guests should also be included.
Engaging crew does not lessen an owners responsibilities. Since logistical shore support is often needed anyway, it makes sense to use a shore-based manager to handle the management of the yacht, allowing the captain to concentrate on his or her duties on board.
Saving costs is no excuse for non-compliance, yet there are still many smaller crewed yachts that fail to adhere to regulations distilled from years of best practice and incident analysis. These yachts are also likely to be off-cover as far as their insurers are concerned.