Trial Status of Disputes over Labor contracts of Crew Members
 (January 2011 – December 2015)

Ningbo Maritime Court
June 2016 

Preface

Zhejiang is a large oceanic province, enjoying relatively developed shipping and fishing industry. The Province has a large number of practicing crew members. Owing to the large risk of marine operation, the numerous practicing crew members, the high turnover and the relative lagging legislation relating to job and occupation guarantee, crew labor disputes constitute one of the key frequent conflict and dispute cases in the field of marine economy in Zhejiang. Since such dispute forms the main type of case in respect of livelihood of ordinary people in maritime trial, our Court attaches great importance to the trial of such dispute cases. The specific methods include establishing sound rights protection and litigation mechanisms for crew, timely accepting and properly settling crew labor disputes in accordance with the laws and contributing active efforts to promote the construction of harmonious and orderly nomocracy environment for crew labor, to maintain their lawful rights and interests and to develop a safe Zhejiang Province.

I. Basic Information of Crew Labor Dispute

 From January 2011 and December 2015, our Court accepted and handled 4,224 crew labor dispute  cases with RMB 206 million Yuan value of case object, accounted for 26.9% of all cases accepted during the corresponding period. It ranked ahead in maritime courts domestically (See the following Chart I for details of distribution). The main features are presented as:
Chart I: Schematic Diagram of Crew Labor Disputes Accepted and Settled from 2011 to 2015 (Unit: case)

 (I) The main type of dispute lies in crew member labor contract dispute and maritime personnel injury liability dispute
Over the past five years, our Court accepted and settled 3,820 cases relating to crew member labor contract disputes, including 212 cases in 2011, 720 in 2012, 646 in 2013, 770 in 2014 and 1,472 in 2015. The number of case maintained high after the substantial growth from 2012 which reached the historical peak in 2015. Such disputes were normally filed by crew with the aim to recover their labor remuneration or wages. They requested the claimant to pay their wage, compensation for removal and other fees and to confirm that the aforesaid arrears have maritime lien. In recent years, the claim of this kind of dispute was changed. In addition to the traditional simple disputes to request the payment of labor remuneration, it also involved economic compensation, overtime pay, legal holidays overtime pay, payment of social insurance premium, handling of social insurance formalities and other new disputes.
We accepted, over the past five years, 404 crew-oriented maritime personal injury liability dispute cases, including 60 cases accepted in 2011, 76 in 2012, 77 in 2013, 68 in 2014 and 123 in 2015. Except for the year of 2015, the number of case accepted was relatively stable. The basic characteristic of such dispute is that a crew member or its heirs sues its employer or the responsible party to compensate maritime personal injury caused in the course of labor providence.
(II) The subject of dispute was changed from crew member of fishing ships to crew member of all types of ships which have close relations with the operating status of shipping company Zhejiang has developed fishery and numerous fishing ships. Presently, 22,424 fishing ships of trawler, pots, gillnetter and other maritime fishing operation types as well as appropriately 200,000 crew of fishing ships were registered by and at the Province. Crew of fishing ships once formed the main subject of crew labor cases and of relevant disputes relating to crew labor that accepted by our Court. As the occurrence of excess capacity of the shipping market and the fall of freight, the crew of bulk cargo ships and of engineering ships of shipping companies became the main subject of lawsuit who became human right defenders. Due to the difference in the type of economy in Zhejiang and the operating status of shipping companies, the crew labor dispute cases accepted by the headquarters of our Court and three detached courts, located at Zhoushan, Taizhou and Wenzhou, reflected the regional difference. Zhoushan has the most developed fishing industry and its small and medium-sized shipping companies face operating difficulties and relatively serious phenomenon of evasion of debts. Zhoushan Court accepted the largest number of crew labor disputes, in the past five years, namely 2,104 cases; the shipping companies in Ningbo had 1,001 cases, accepted by our headquarters, relating to arrears of wage; and Taizhou and Wenzhou accepted 490 and 225 such cases, respectively, with relatively small number.
(III) High rate of crew labor contract dispute mediation and relative large difficulty in executing of personnel injury liability dispute trial
In crew labor contract disputes, because of the problems of ships or shipping companies in operating, we saw more cases filed by the relevant crew members, based on the unit of ship, against the same ship owner or employer. Generally, both sides have not much disputes over employment and arrears of wage. Such disputes have small value and high continuous generation. When a shipping company or a ship owner is unable to pay the wages, the crew members may, in general, assert a claim of maritime lien to arrest such ship and enjoy the priority of compensation from auction proceeds. This type of case is relating to people's livelihood. The crew members, after the arrest of the ship, expect fast and effective trial execution and have the willingness to achieve mediation. In the past five years, the average number of trial days for crew labor contract dispute handled by our Court was 40.82 days, 11.46 days shorter than other types of cases of the same period. 1,996 cases were settled with 52.87% rate of mediation. Another 10% cases were closed in mode of withdrawal, relatively higher than other types of cases of the same period in the rate of mediation. 
The number of cases of personal injury liability disputes relating to maritime and waterways connecting with seas involving in crew-based parties accounted for a relatively large proportion. Over the past five years, our Court accepted 545 such dispute cases. Of which, 404 cases were filed by crew members, accounted for 74.12%. At the same time, in terms of such disputes, both parties mainly had disputes in respect of degree of fault, accident causes and amount of loss, having relative low rate of mediation compared with crew labor contract disputes. Appropriate 70% cases were closed in mode of ruling. After effective of ruling-closed cases, most of defendants have relative low active rate of performance due to the lack of the insurance and ship owner, as the main responsible subject, or significant death and loss due to sinking. Most of the cases were processed by compulsory execution and had difficulties in final settlement over a long period of time.
(IV) New problems and new situation of claim and exercise of maritime lien in content and procedure The dispute content of crew wage and personnel injury compensation relating to crew labor contract disputes has maritime lien. The claim, exercise and realization of such right have become a key point of such disputes handled by maritime courts. Over the past five years, the crew-claimed maritime lien cases showed the following new situations, namely: (1) The items and scope of such cases exceed the traditional compensation for wages and personal injury; and expands to the scope of double pay under dispute without signing of a labor contract, of economic compensation for termination of labor contract and of payment of overtime pay and social insurance; (2) The subject of claim expands to ship mortgager, registered owner, trustee and other party who advances crew's wages; (3) Some cases are relative complex actually  and have new situations, including the separation of maritime lien's confirmation and execution as well as maritime lien reserve. The case ((2015) YHFSCZ No. 578)   handled by our Court in 2015 supported the separation of maritime lien's confirmation and execution in form of ruling.

II. Main Reasons for Crew Labor Disputes

1. Slump in shipping economy and relative worse anti-risk ability of subjects. Affected by global economy, the shipping industry continues to weaken. A majority of ship companies suffer from serious loss and are unable to pay wages in a timely manner, causing a large number of wage claims in courts. Comparing with companies, the crew members hired by individual ship owners are facing larger risks. For the crew labor contract dispute against natural person ship owner as the defendant, in addition to the cases with relative high degree of disability and serious death, most of the cases have occurred during the course of fishing and repairing. Although some cases have small value, they are unable to be exercised properly over a longer period after closing due to the limited ability to repay of the natural persons concerned.
2. Weak legal consciousness of practicing personnel and weak idea of dispute prevention. In crew labor contract disputes, most of crew members fail to sign a written contract with their employers. Upon occurrence of a dispute, it is difficult to produce evidences with respect to the existence of labor contract, wage distribution standard and other aspects of disputes which are bad for the parties to maintain and protect their legal rights and interests. For commercial and cargo ships, the written contracts are signed to a great extent. However, the content of contract is not standard. In practice, the format of contract is prepared by ship owners, lacking enough protection of the legitimate rights and interests of the crew members. Under this circumstance, disputes in respect of the terms and conditions of contracts and the rights and obligations of both sides are easily formed.
3. Loose management of fishery production and improper management and supervision. In terms of all types of ship operations, crew members are likely to get injured during fishing operations. For crew personnel injury liability disputes, the proportion of fishing ship crew accounted for 85%. The reasons mainly lay in the relatively loose management of fishing production; the weak safety production consciousness of ship owners; the unbending behavior of crew members hired and the low qualification requirements. During practical trial, we frequently see that the ship owners defend that crew member's injury is caused by its unfamiliar of the related operation specification and failure in abiding by the command. Maritime fishery production has large risks. Coupled with bad sea conditions, typhoons and safety accident and collision incidents caused by other natural factors, it is easy to cause crew personal injury accidents frequently.
4. The increase in the number of migrant workers and the failure in follow-up of training mechanism. The maritime personnel injury liability disputes relating to fishing ships are frequent occurred because of imperfect crew member employment and training mechanism. The employment lacks of access mechanism and most of such owners are natural person, failing to satisfy the requirements to provide crew members with sound training conditions objectively. In the past, crew members mostly came from coastal areas as fishermen locally, possessing traditional industry knowledge. As the development of coastal economy and the movement of population, the number of crew member of fishing ships was significantly increased from migrant workers. Those personnel frequently lack of the necessary skills, experience and self-protection awareness relating to offshore operation which may easily lead to fishery production accidents.

III. Main Problems of Crew Labor Disputes

1. Difficulties in identifying the counterpart relating to and under crew labor contract. We see various types of ship operations such as bareboat charter and call-based mode. Some employers or natural persons, due to the needs of ship operations, may register the ownership of a ship under the name of other person or entrust a ship management company to hire crew members to work. The aforesaid factors avoid the signing of written contracts or cause a phenomenon of contract signing between the crew members and the ship operators, the lessees and other non-marine owners. Accordingly, this brings in difficulties in correctly identifying contractual counterpart when prosecuting and rights protection is affected thereof due to improper confirmation of the defendant concerned.
2. Obviously increase in new problems involving labor-related legal relations. Where the contract counterparty under a crew labor contract is a natural person, the employment relationship established between a crew member and such employer is not classified as the field of legal adjustment as stated in China's labor law; if the contract counterparty is a domestic corporate or individual economic organization as stipulated in the labor contract law of China, the labor contract relationship thereof is established. Some crew members put forward new claims relating to overtime pay, economic compensation and payment of social insurance. Due to the particularity of crew member's work, the determination of the above mentioned requests run into numerous problems in judicial practice. Therefore, the rights protection claims filed by crew members face obstacles.
3. Complex connection situation with district courts and arbitration institutions. The legislative purpose of directly acceptance of disputes over crew labor contract as stipulated in the Maritime Procedure Law of the People's Republic of China by maritime courts lies in the guarantee of accomplishment of crew members' maritime lien smoothly. However, the Maritime Procedure Law and its judicial interpretation have no corresponding explanation on "disputes in crew labor contract". The relevant regulations as stipulated in the Provisions on Causes of Action in Civil Cases are incapable of covering the diversity of the main subject under a crew labor contract and of the legal relationship in aspect of maritime judicial practice. In addition, the jurisdiction of labor arbitration institutions, district courts and maritime courts, with regards to dispute case in crew labor contract, is inconformity.
4. Inconsistent compensation items and standards. According to the different basis of claim right of lawsuit filed by crew members, the compensation items for injury and death suffered in the process of working are varied. In terms of any injury relating to a crew member who signed a labor contract with the shipping companies and labor dispatching units, the companies and units, in general, cover shipowner's liability (SOL) insurance and handle such case in accordance with the regulations as stated in Contract and the Regulations on Work Injury Insurance. It is seldom for crew members to file a claim in the maritime court directly. Nevertheless, there are still a large number of crew members to file claims in maritime court due to unsuccessful mediation or failure in signing a contract. For trial of such cases, the laws have specific provisions on the compensation items in respect of crew members' claims. However, the compensation standards and compensation items for industrial injury and common personal injury are controversial and fail to reach a unified status.
5. Imperfect guarantee mechanism and insufficient ability to compensation. The crew labor dispute reflects the imperfect situation of current labor and social security mechanism. If any ship owner is incapable of paying the wages to crew members, it is to pay off the relevant debts in mode of ship auction. Due to the depression in the shipping market, the crew members' wages may face the following difficulties even if they have the right to enjoy the maritime lien according to the laws: long ship disposal period, high cost of disposal, lower auction price and insufficient ship auction proceeds to pay the maritime liens credit. In terms of maritime personal injury liability disputes of crew members, although some ships have covered the insurance, ships are requested to join in the Fishery Mutual Insurance Association. Nevertheless, the scope of insurance compensation is still relatively limited. With the improvement of national economic development and per capita income, the compensation amount for injuries has high expectation which beyond the affordability of subjects of employment.
IV. Main Measures for Trial of Crew Labor Disputes

(I) Adhere to the principle of providing convenience and benefit to people and meet the demands of crew members judicially
1. Improvement of the crew litigation service center. Most of crew members are incomprehensive and unfamiliar with the maritime litigation procedures. Although crew members have the consciousness of rights protection, they know nothing about the specific path. For this purpose, our Court established the legal service system combining portal website, case registration and petition window, 12368 telephone and voice service and legal service center to broaden the service channel, to facilitate the work flow, to provide crew members with targeted litigation consulting services, to offer the relevant templates for crew members relating to prosecution material description, statement of claim and information of authorization and to avoid troubles due to the lack of professional agent ad litem.
2. Open the green channel for crew members' lawsuit. To resolve the crew labor disputes in a fast and efficient manner, the case registration rooms, the trial business rooms and the execution rooms established the mutual cooperative "green channel" with the aim to accelerate the circulation, apply simple procedure as far as possible, simplify the procedures and explore procedures suitable for small value litigation, greatly improving the settlement efficiency of crew labor disputes. Aiming at the difficulties faced by people from remote islands in litigation, our Court deeply carried out circuit trial and field case handling services at fishing areas by establishing circuit trial sites in many places to implement mediation before litigation and mediation-based works connection. We adhere to the principle of mediation-first and make efforts to supervise the parties to take the initiative to perform their duties.
3. Providence crew members with judicial aid. The crew members who have economic difficulties may enjoy the right of reduction, deferment and exemption of legal expenses which effectively relieve the difficulty of claims for rights protection. In 2015, 428 such crew members enjoyed the right to reduce, defer and exempt RMB 945,000 Yuan legal expenses. If any party requests for preservation with regards to the case has relative clear legal relation and fault liability, such party may not provide any guarantee to ensure future property available for execution. The parties whose rights have been violated and have economic difficulties may actively use the judicial aid mechanism to obtain certain aims in case of improper execution.
(II) Unified compensation standards and focus on judicial orientation of sentence
1. Unified compensation standards and discretionary compensation for loss. The launch of Several Opinions relating to Trial of Maritime Personal Injury Compensation Dispute Case unified the compensation standards within the scope of our Court. While protecting the lawful rights and interests of the parties, our Court pays attention to the regional differences in economic development and living standards for the purpose of ensuring unified judgment criteria. For lawsuits filed by crew members relating to non-occupational sickness or unknown cause of death, we order the employers concerned to give the crew members with certain economic compensation subject to the actual loss of the obligees and the economic situation of the parties who pay the compensation in accordance with the laws.
2. Clear fault and responsibility and focus on judicial orientation of sentence. Where any crew member is responsible for a personal injury accident, its employer has the obligation to produce the evidences of such default. When conducting trial, we lay emphasis on discovery of the facts and clearly distinguishing the responsibilities of both sides. The causes of injury suffered by crew members due to their fault include the failure in wearing accoutrements, operating inconformity to the standardize requirements, following the instructions, and having drunk. The judgments focus on clear fault liability. For the use of safety equipment and facilities, it is thought that employers have the responsibilities to equip, manage and supervise it but not to ascribe the main reason to the injured parties. All employers shall take accident as a lesson and strengthen safety production management.
(III) Maintain the legitimate rights and interests and fight against false action
The crew members' wages enjoy the maritime lien in accordance with laws that have the priority for compensation in ship auction. The judicial practices find out that some ship owners act in collusion with their crew members to fake and fabricate facts and try to participate in distribution of auction proceeds by way of identifying of the priority. Such kind of behavior acquires improper benefits while seriously infringing upon the legitimate rights and interests of other creditors. In the course of trial of crew labor dispute cases involving maritime lien, we strictly follow the principles of protecting the legitimate rights and interests and fighting against false action. In addition, we carried out investigation on crew members' job logging, including the crew member service book, the wage distribution record and the information registered at Maritime Bureau and Oceanic and Fishery Bureau; and carefully examined and distinguished the facts claimed by the parties. Over the past five years, we sternly handled several false cases relating to crew member wages. We aim to build faithful litigation environment for rights protection.
V. Relevant Suggestions for Prevention Crew Labor Disputes
(I) Suggestions for crew members
1. To improve contract consciousness and carefully conclude labor relations. All crew members, when establishing labor relations, should try to choose standard employer and clarify the ownership of ships and business relations as far as possible to avoid difficulty in determining the object of litigation in case of disputes. Those who fail to enter into a written contract with their employers shall make efforts to prove the facts of working on the board to obtain preliminary evidences from the labor contract relationship with the ship owners. Since most of ship companies use the contract format in fixed form, a majority of crew members expressed that, during our judicial practices, they entered into the contract without a glance of the content. We strongly recommend all crew members to carefully read the terms and conditions of contracts and ensure that the content represents the real meaning of the crew members to avoid damage of the legitimate rights and interests.  
2. To work with permit and to enhance safety awareness. The work of crew members is classified as a job of special skills. Offshore operation environment causes danger to the work. Along with the development of coastal economy and the occurrence of population movement, the migrant workers are increasingly becoming the main force of fishing teams. However, they lack of offshore operation skills, experience and self-protection consciousness and are easily to cause fishery production accident. To protect the safety of crew members, other persons and the ships, the relevant crew members must work with permits and possess good skills.
3. To understand the legal procedures and to advocate rational rights protection. All crew members shall make full use of several convenient services provided by our legal service system to access to the data before appeal, to make an inquiry in person or via telephone to understand the basis procedures; prepare crew member certificate, contract, payroll and other evidences for the purpose of proving the labor contract relationship, wage standards and other materials; choose local labor arbitration department for arbitration dispute settlement; pay attention to the exercise of maritime lien; keep eyes on ship arrest and auction and handle credit registration or authorization formalities at our Court in a timely manner. During the process of lawsuit, they should respect and support the work procedures of the courts and strictly prohibit privately arresting ships, causing riot and taking other illegal means.
(II) Suggestions for employers
1. To strictly select crew members and to enter into contracts in a proper manner. All employers must examine the crew members of their vocational qualifications and professional skills. To clarify the contract relationship and all rights and obligations concerned, we suggest employers to enter into written contracts with crew members hired. In addition, employers shall pay special attention to the agreements relating to overtime pay and social insurance that are easily to cause disputes; based on the laws and regulations, negotiate with the crew members of the terms and conditions of contracts; explain the content of contract in detail. Where any ship owner refuses to recognize the labor contract relationship with a crew member during lawsuit, such owner must provide evidences to prove that the crew member is employed by others; otherwise, he shall bear the consequences for failure in providing the evidences.
2. To safeguard the rights and interests and to pay wages timely. Employers shall provide crew members with safety production environment and material support; properly exercise safety production education; and strengthen safety production management when working. Practically, the wage distribution period of most of employers is relative long. Some fishing ships are used to make a settlement and distribution after the end of the fishing seasons which may lead to large demand for capital and difficulty in cash. Employers must distribute wages to crew members on schedule and in a timely manner during the employment period.
3. To actively cover insurance and to spread risks. Currently, despite of the ship-based related compulsory insurances, the scope of insurance coverage and the amount insured are generally limited which have difficulties in coping with huge risk caused by maritime accidents. The fishing ships, for particular, have large operation risks, high accident probability and poor economic capacity of employers who are unable to afford economic compensations. Presently, in addition to joining in Fishery Mutual Insurance, ships seldom cover commercial insurances. We recommend employers to cover commercial insurances to share risks based on their own economic ability.
(III) Suggestions for administrative functions
1. To standardize the crew labor market and to review and promote unified contract. The labor service intermediary institutions and the dispatching institutions of the crew labor market are uneven and lack of norms, causing indistinct definition of crew labor contract relations, relative more wage disputes, formulation of profit seekers and infringing upon the lawful rights and interests of crew members. The functional departments, on the one hand, shall strengthen the supervision and specification of such institutions; and on the other hand, may set up non-profit crew labor introduction agencies to provide convenient and affordable employment opportunities for crew members. In the aspect of written contract concluded between and by employers and crew members, it is to form effective supervision mechanism and to reduce labor disputes between both sides due to unclear agreements. Based on the situation of providence of contracts by employers, we recommend the industry association or relevant competent departments to formulate a unified and standardized contract version or implement contract filing and registration review system because of the imperfect terms and conditions of contracts and the disadvantages of crew member in signing contracts in order to regulate the crew labor market, promote its healthy development and protect the interests of crew members.
2. To strengthen the supervision of production safety and to establish and improve the security system. The functional departments shall strengthen safety operation regulation; properly exercise orientation training; and strictly prohibit unqualified personnel to work on board. The fishery competent departments of our Province, in recent years, carried out rectification activities aiming at "three-no" ships, achieved substantial results in many regions. By virtue of this, it is to standardize the management and production activities of fishing ships; and to propaganda and set up the concept of safety production. For inevitable offshore operation risks, we suggest improvement of the security system; establishment of diversified risk sharing mechanism; and enhancement of personal compulsory insurance and business insurance systems. Ship owners must consciously cover insurances to guarantee acquirement of compensation by victims in a timely manner and to make ship owners and other responsible parties to lessen the financial burden and guarantee normal production and business operation.
3. To improve judicial assistance and to build collaborative system. In order to handle crew labor disputes in a better manner, especially for mass disputes that may cause great influence, we suggest the government institutions, judicial departments and civil society organizations to strengthen communication, cause collaboration and establish a hierarchical and diversified dispute settlement mechanism. In the pre-appeal stage, it is to strengthen the collaboration and communication between the grass-roots mediation organizations and the courts; separately process the crew member disputes between the grass-roots mediation organizations and the courts; form relatively unified processing standards; maintain consistency between people's mediation and court proceedings against the same type of disputes; and improve the efficiency of dispute resolution and credibility. In the event the maritime lien cases are unable to be settled through mediation, the rapid connection channel between the mediation organizations and the courts may be set up. The legal aid agencies may establish special department aiming at crew labor disputes; maintain normalized contact with maritime courts; provide conveniences to crew members in obtaining legal aid; and provide more professional maritime assistance services.
4. To enhance coordination and cooperation and to prevent false actions. False crew labor dispute litigations not only damage the interests of specific creditors, but also easily intensify contradictions and cause mass incidents. In respect of the clues of false actions held by courts, the relevant departments shall actively provide cooperation with investigations. In the event the crew members' work on board is true, it is to retrieve information from maritime and fishery departments. Additionally, the investigations of ocean crew members require the customs and border defense institutions to provide the arrival/departure records. The courts, the administrative law enforcement departments and the industry associations shall cooperate and coordinate with each other and form a good atmosphere of severely attacking false actions and advocating honesty litigation.

Conclusions

Crew members constitute the main force of building a powerful shipping country and spreading national oceanic culture. After a period of time of judicial practice, the current difficulties in payment of unpaid wages suffered by crew members have been effectively relieved and the crew labor disputes are properly handled in accordance with the laws. Along with the deepening of implementation of the strategy of strong marine country, crew members' labor characteristics, professional dignity and rights protection are in need of more attention and concern by the legislative, judicial, administrative and other internal industrial organs. Our Court will continue to attach close and great importance to crew members' livelihood appeals; focus on accepting and trialing of crew labor dispute cases in a proper manner as the main breakthrough point civilly and judicially; fairly and effectively settle the crew labor disputes and maintain social stability; and provide good services and judicial protection for the strategies of "one belt and one road" and of a powerful maritime province.