MLC 2006 and the luxury yacht sector

18 Авг

В статье рассматривается влияние Конвенции о труде в морском судоходстве 2006 года (MLC 2006) на отношения, складывающиеся при эксплуатации яхт между моряками, менеджерами и работодателями. В частности, исследуется сфера действия MLC 2006 по кругу лиц и в пространстве. Особое внимание уделяется соответствию яхт-люкс, которые используются в коммерческих целях, требованиям MLC 2006. Отмечается значительная стабильность трудовых отношений на таких яхтах, а также важность правильного оформления трудовых отношений в соответствующих договорах. Автор приходит к заключению, что соблюдение высоких трудовых стандартов – это путь к коммерческому успеху собственника яхты-люкс.

In a sector where crew performance is a major differentiator, conditions of employment could be crucial to success.

In the luxury yachting sector, as in international shipping, legislative force has been the main driver of environmental change. Before the enactment of MLC 2006, both private and commercial luxury yachts operated without a globally applicable uniformly enforced set of comprehensive rights and protection for seafarers. MLC 2006 has reasserted the role of the state as an important actor in regulating seafarers’ living and working conditions in the luxury yacht sector, but only onboard yachts that are certified as able to engage in commercial activities (chartering) – it does not apply to yachts that are operated only for private use. As the majority of charter yachts cover at best only a percentage of operating costs, any additional legislation that creates additional burdens and costs in the luxury yacht sector will face challenges, especially in a market where capital is highly mobile.

With this in mind, how have the fundamental rights and principles set out in MLC affected the operation and management of luxury yachts? And how have seafarers, management and employers in the luxury yacht market adapted to the increased employment and social rights mandated under the convention?

How far does it apply?

There have been claims that MLC in the yacht sector will be a ‘paper tiger’, with no effect. Equally, there have been claims that it will be the final straw that breaks the camel’s back by introducing increasing costly and burdensome regulations, to be followed by a torrent of complaints and demands once seafarers overcome the fear of raising these issues with their employers.

A study into the likely effects of MLC 2006 in the yachting sector was carried out during the last three months prior to its international entry into force in August 2013. The most active charter market in this sector is in the Mediterranean from May to September, with a secondary shorter chartering season over the winter months in the tropics, mostly in the Caribbean. In 2013, only tw o port states within the Mediterranean had adopted MLC at the local level: Spain and Croatia. In effect, this meant that, in the most important chartering season and location, only two countries were able to inspect yachts for MLC compliance in their national waters. Now, MLC has entered into force nationally in France, Malta and Greece, with Italy and the UK following later in 2014. The UK is one of the largest luxury yacht registry groups when taking into account the eight UK Red Ensign Group territories (Cayman Islands, BVI, Gibraltar, etc.). Turkey, a very popular area for yacht charter cruising area, has уet to nationally ratifу MLC 2006.

A large majority (63.6%) of seafarers in jurisidictions that would come under the MLC reported that they had not been advised of any changes to their living and working conditions related to MLC. A small minority of those seafarers working on charter yachts (13.5%) reported that they had not been offered a written signed contract. Combined with the ANOVA results showing that the implementation of MLC 2006 is not significantly related to perceived operating conditions on MLC certified yachts engaged in trade, this leads to the conclusion that many ow ncrs of charter yachts have not yet undertaken or put into operation best industry operational practices and basic MLC compliance measures.

This conclusion is further supported by filtered survey data that showed almost a quarter (22%) of the seafarers employed on charter yachts do not monitor, record and formally submit for review their dailv/weekly hours of work or rest. Almost a third (30.8%) of those seafarers employed onboard charter yachts who do record their hours of work or rest admitted that they falsify- work/rest records, both critical components in terms of MLC compliance.

It is important to remember the main intent of MLC 2006 in regards to the luxury yacht sector was two-fold. It aimed to provide decent work for seafarers and to level the playing field through fair competition for yacht owners that charter. It is also important to realise that most of the MLC regulations already derived from existing ILO standards and existing industry best practices. Those organisations that wish to continue successfully operating in the luxury yacht charter market have recognised that MLC 2006 is a significant external government legislative force that will result in considerable organisational change.

PSC detentions

According to the Paris MOU Port State Control press release detailing the results of the first month’s ship inspection since MLC was implemented, ot the 30 deficiencies considered serious enough for ship detentions, 23 (76.7%) were related to breaches of the MLC resulting in the detention of seven individual ships. Clearly MLC 2006 has teeth. This means that, from the summer of 2014. no yacht will be able to legally or effectively charter in the EU without a valid DMLC, as no reputable charter broker or charter company would risk placing their clients on a yacht that would be subject to delay or detention by port state control. Owners of charter yachts that are unable or unwilling to invest in MLC compliance will be forced to make difficult choices regarding operating revenues, ownership and future intended usage/ ownership of their yacht. “I bis also has implications for seafarers serving on these yachts in terms of future employment.

Employment conditions

With regards to MLC creating a torrent of complaints from seafarers in the luxury yacht sector, the responses from seafarers’ rating of work experiences on luxury yachts would appear to contradict this point of view. A majority of seafarers report generally positiv e attitudes to working in this sector, with market salaries considered the second most important factor in work satisfaction on yachts after quality of life. The impact of MLC 2006 in terms of unionisation of the labour force in the yacht sector is expected to he minimal. In general, the majority of seafarers in the luxury yacht sector describe favourable terms of employment, especially those in senior ranks. This evidence was supported by many seafarers reporting long-term employment spans under the same owner.

Employment contracts

The governing employment contract is a central feature of any effective employment relationship, according to Mullins in the 1991 study ‘Managing through people; regulating the employment relationship’.

Of the two MLC-compliant employment contracts available, both managers and seafarers preferred Seafarer Employment Agreements (SEAs) as opposed to a Collective Bargain Agreements (CBAs), in terms of mutual respect, dealing with employment issues correctly and fairly, and employee health and well-being.

As the terms and conditions of a flag-approved SEA become more commonly adopted and propagated in the industry, having such an agreement is going to become a central issue for seafarers considering employment. Those better quality owners and yachts that embrace international standards in terms of living and working conditions will naturally attract and compete for higher quality seafarers. Those owners

who refuse to offer seafarers written contracts, or who offer contracts deemed subpar in terms and conditions, will tend to attract seafarers who have limited employment options; hardly a strategy for long-term success.

Financial considerations

Virtually no yacht owner enters the luxury yacht market with the belief that the large capital investment w ill ever return a profit. Almost all commercial yachts operate at a loss due to the high operating costs and limited charter seasons available. Unlike the commercial shipping world, which is mainly profit-driven, yacht ownership especially in charter market is driven by high client/owner satisfaction, repeat charters and by maximising bookings during the short seasons available, thereby maximising revenues. The way in which the crew performs, both as a team and individually, is criticial to the success of the operation, whatever the financial background.

Although MLC has not yet notably impacted yacht operations, it will be seen by seafarers, managers and employers in the sector as the future industry gold standard bv which all employment desirability will be measured. Commercially operated yachts and those private yachts that comply with MLC standards will be seen as the most desirable organisations, able to attract the highest quality- seafarers, and consequently the most successful.

This article is based on a study and dissertation completed by Captain Croft for his MSc dissertation. The dissertation also looked into the application of modern human resource management tools in the luxury yacht sector. This will be explored in a future article.

Автор:

Adrian Croft, AFNI

Источник:

Seaways. – 2014. – August. – Р. 21 – 22.