Challenges, optimisation and legal framework for crew management for shipowners and yacht managers
Yachting, whether for private or commercial purposes, now plays a central role in Monaco's economy, both for private shipowners who wish to engage in recreational boating and for those involved in commercial boating.
This rapidly growing sector attracts a demanding international clientele and generates skilled jobs both on board and ashore.
However, for every private or professional shipowner, a strategic issue arises: the choice of labour law and social security regime applicable to the crew sailing on the yacht, in order to ensure a legal framework for labour relations on board and social protection for crew members in accordance with international standards.
While the yachting industry is characterised by a high degree of internationalisation linked to the choice of flag, the yacht's home port, the nationality of the owner and crew, and their places of residence, this globalisation confronts the owner with a multitude of legal and social systems, the combination of which can give rise to complex and sometimes conflicting situations.
The choice of labour law: contractual freedom that is restricted sometimes
The shipowner must determine precisely which labour law applies to the crew according to the flag, home port, nationality of the crew members and place of embarkation. This choice will influence the resolution of disputes and the social climate on board the ship.
However, the particularity of the yachting sector is that it offers a certain degree of flexibility in the choice of law applicable to the boarding contract, depending on whether the vessel is operated purely for private purposes, for commercial purposes or for both. The choice of flag plays a decisive role in determining the applicable legal regime.
Thus, the ship is in principle subject to the law of the country whose flag it flies. Nevertheless, some countries impose extraterritorial rules or enhanced obligations on ships calling at their ports, particularly when they are engaged in commercial activities.
Consequently, choosing the law applicable to the employment relationship and drafting the resulting employment contracts can be tricky: it involves reconciling the requirements of the flag state's law with those of the crew members' countries of origin, the shipowner's place of residence, the areas of navigation and the ship's activity.
Determining the social security regime: the risk of optimisation or the choice of security
The issue of social security on board yachts is even more crucial, both for the protection of the crew and for the shipowner's liability: contentious situations are not theoretical in this area.
Ensuring adequate social security coverage for crew members in terms of health, retirement and workplace accidents is a prerequisite for the legal security of shipa management and also contributes to crew loyalty and motivation.
Thus, depending on the flag chosen by the shipowner, several configurations may exist or co-exist:
- the national regime of the flag ( some States require crew members to be affiliated to their own maritime social security regime, such as the Monegasque flag, which requires seafarers of foreign nationality other than French and Monegasque to be affiliated to Monaco) ,
- private or international schemes ( some flags allow or even require membership of private insurance schemes or international funds ),
- multi-affiliation ( crew members may be affiliated to several schemes at the same time, depending on their place of residence or nationality, which requires careful administrative management.
It is not uncommon for certain shipowners to seek to optimise their social costs, which may lead them to choose flags of convenience or favour minimalist solutions: while such a strategy is not illegal given the flexibility offered by the industry, it is not without risk, as it may expose the ship to increased inspections and the shipowner to disputes with their crew, or even administrative or criminal penalties in certain, fortunately rarer, cases.
Major strategic challenges for shipowners
In a context where many states are seeking to attract shipowners with preferential tax regimes, it is necessary to strike a balance between tax attractiveness and social responsibility.
Given the complexity of these situations, shipowners must be supported in their choices regarding the establishment of a protective legal framework that reduces the risk of litigation and ship seizure related to crew member claims.
These choices determine the sustainability of commercial yachting operations, the safety and satisfaction of the crew, and ultimately the reputation of the shipowner.
It is therefore essential to consult professionals when choosing the applicable law, which involves drawing up clear employment contracts that comply with international standards and are adapted to the type of crew, the flag and the ship's port of registry, but also when choosing a robust social security scheme that is suitable for crew members.
