By Dominic Bulfin
With the prospect of limited or no use of their yachts for much of 2020 because of COVID-19, the temptation for many yacht owners was to reduce their overheads by reducing the size of their crews until the pandemic was over.
Whilst this approach is understandable, it was not without several issues, not least whether it was even worthwhile in the first place. Many Seafarer Employment Agreements (SEAs) provide for unilateral termination upon service of 30 days’ written notice by the owner. In the context of the pandemic, this was only worth considering if the owner knew he did not need his crew for several months. At the time, nobody knew how long their yachts would be out of action. If the disruption only lasted a few weeks, owners risked dismissing a large proportion of their staff, only to have to rehire them a couple of weeks later.
The benefits of keeping a good crew together and supporting them through a difficult time far outweigh the more tangible saving on wages and living expenses. (That said, we did see isolated examples of crew members failing to reciprocate their employer’s good faith, which I will address later.)
Just as the pandemic has shown us all the strengths and weaknesses of life as we knew it, so it has also shone a light on the various contracts that are in use across the superyacht sector, be that a build contract, sale and purchase agreement, or SEA.
While SEAs are generally well drafted for the world we knew, many were not as well prepared for the unknown of a pandemic that, overnight, left yachts stranded all over the world, with crew members due to come on and off duty but without flights to get them home.
The last few months has been an unprecedented opportunity to really look at SEAs in a new light and consider their strengths and weaknesses.
When working out what best to do with crew members, we had to consider not only the wishes of the owner and the individual crew members, but also the regulatory and contractual environment in which they work.
We have already considered the owners’ perspective, but what about crew members? As one would expect, the response was varied. Many, being young and fit, were not concerned about the virus themselves, but worried about bringing it home when they went off duty – particularly relevant to those working in Italy at the time of the outbreak in Europe.
Many appreciated that they worked in about as safe an environment as there was at the time of the outbreak – a yacht is a highly controlled environment and it is possible, in extreme circumstances, to isolate an entire crew onboard for extended periods of time.
Finally, there were those who simply wanted to go home. Those were the most difficult cases because peoples’ responses to the outbreak were so subjective. With limited knowledge at the start about how the virus worked, it left owners and yacht managers alike in a difficult position.
At the end of the day, the employer is obliged to take reasonable precautions to prevent the spread of infectious disease onboard. It was this obligation that gave many owners, and their yacht managers, the biggest headache. Whose advice does one follow? What are reasonable measures? Who decides whether the measures taken are reasonable? What happens if an owner has done everything to protect the crew and COVID-19 still makes its way onto the yacht? Can an owner force a crew member to remain onboard?
The managers we work with were proactive in ensuring that hand sanitation stations, masks, and thermometers were available for anyone onboard, with increased cleaning schedules implemented to ensure the most commonly touched surfaces were cleaned regularly.
Nonetheless, in most cases, the decision was taken to send as many crew home as possible so that they could remain within their family groups until the worst of the pandemic had passed – no mean feat considering that we were dealing with individuals from every corner of the globe at a time where flights were scarce.
When looking to operate a yacht short-handed, the first thing to consider is whether it is authorized by the flag state. We found flag state authorities to be particularly receptive during this time, and short-handing yachts in appropriate circumstances did not prove to be problematic.
The next thing to work out is on what basis are those crew members at home. Some will still be on annual leave, others would need to be placed on some other form of leave permissible under their SEA – garden leave (paid leave), unpaid leave, sick leave even.
Then there are questions of who is responsible for the living costs of those crew members if they would otherwise be on duty but for the pandemic.
The most sensible option for most crew members was to place them on garden leave until it became clear just how things would pan out. This option is available under most SEAs, but clearly never designed as a means of placing the majority of crew off duty for a prolonged period of time.
Of course, much like with the measures introduced in the UK to combat COVID-19, the question is how to unwind those measures. Who decides that it is safe to return? Can individuals refuse to return to duty? Under what circumstances can a crew member be dismissed for refusing to return to duty?
There are too many variables to go into here, but these are the sorts of problems we worked through with our clients to ensure the balance was struck between looking after the health and well-being of their crew, protecting each owner’s interests, and ensuring disingenuous individuals did not take advantage of the owner’s good will in keeping them employed throughout the pandemic.
We have seen isolated examples of crew members refusing, without reasonable grounds, to return to duty and the position in these instances must be unequivocal – refusal to accept a reasonable order of the master is grounds (subject to SEA) for dismissal, and owners should not be afraid to take such action where appropriate. Every crew needs individuals who can be relied upon and willing to work hard for the cause; disruptive individuals have never had a place onboard, and the silver lining of the disruption caused this year might be that those negative influences stand out more than ever before.
Dominic Bulfin is associate director of Bargate Murray’s superyacht group based in London. He advises owners and their representatives on all aspects of superyacht ownership and management. Comments are welcome below.