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Key Points of the Report on Crew Labor Disputes Co-written by Ningbo Maritime Court

      China has been deemed as the manufacturing power, trade power and shipping power in the world nowadays. By 2016, China has 1392751 registered ship crews in total, among which 497197 were registered for international routes. High-quality crews are important to the prosperity of shipping industry, and whether or not their legal rights can be well-protected is the key factor affecting the attraction of shipping market to them. The Report on Crew Labor Disputes (The Report) points out that strengthening concern and protection of crews¡¯ rights is not only the basic requirement of ¡°Maritime Labor Convention,2006¡± came into effect in China from November, 2016, but also the essence of promoting our country to develop the Maritime Silk Road. Due to a large number of private-owned shipping enterprises and active economy, Zhejiang has been greatly impacted by the downturn of the shipping market and has become one of the areas with a huge volume of crew labor disputes arising. From 2012 to 2016, 5432 cases of claims by crews for unpaid wage and personal injury suffered have been filed to the Court, ranking the first among all the 10 maritime courts in China. In order to get a whole picture of the current situation of crew labor disputes, with the aim of searching how to adhere to the value of the justice for the people and improving the relevant mechanism, Zhejiang Higher People's Court and Ningbo Maritime Court (The Court), jointly carried out a special investigation on cases of crew labor dispute handled by the Court in recent years, focusing on problems emerged in practice.

     It is said in the Report, crew labor disputes generally have the following issues: i) difficult to define or classify the dispute due to unclear agreement or complicated situations, ii) difficult to accurately identify the counterpart of the contract; iii) hard to proof overtime work when claiming for overtime pay; iv) onshore staffs are not entitled to claim unpaid wage from ship auction fund.

     The Court has taken some measures accordingly for the above-mentioned problems: i) based on Provisions of the Supreme People's Court on the Scope of Cases to Be Accepted by Maritime Courts promulgated on March 1, 2016, the Court, labor dispute arbitration committee, labor authorities governing the assessment and verification of work-related injury, and social insurance system shall fulfill their respective duties and functions and cooperate with each other, ii) by focusing on protecting the rights of crews, the counterparty of the labor contract may be identified flexibly, and the shipowner shall always bear responsibility either as a sole employer or a co-employer, iii) uphold crews¡¯ claim for overtime pay and relevant rights, iv) as to the distribution of ship auction fund, with approval of the creditors¡¯ meeting or the discussion of the trial committee, the Court may take onshore staffs into consideration when the Court deems appropriate in the distribution process as per a certain ratio (approximately 70%) of their unpaid wage (excluding double salary and compensation), together with the crews with maritime liens.

     According to the Report, cases of claims by crews for perosnal injury suffered generally have many problems. For instance: i) difficult to determine victim¡¯s place of residence and place of court tried the case, ii) repeat application for evaluation of the disability and injury in many cases, iii) how to divide the second evaluation fee, iv) whether or not to apply work-related injury compensation directly and issues relating to concurrence of work-related injury compensation and tort compensation and so on.

     The Court has taken some measures accordingly with respect to the above-mentioned problems: i) in principle, determine the compensation based on that the victim¡¯s household registration address is deemed the place of residence and data for previous year published by the office of provincial statistics, whereas for victim with his household registration in rural, the Court may determine the compensation as per urban standard if the victim¡¯s habitual residence and main source of income are in urban, meanwhile, the Court also give full respect to both parties¡¯ mutual choice regarding the statistic data, ii) initiate disability evaluation process in a cautious and appropriate way and determine the distribution of expense burden pursuant to the evaluation result, iii) if the crew¡¯s personal injury may also be deemed as work-related injury, compensation will be determined in line with principles of indemnity, subrogation and unjust enrichment, but the Court will consider whether or not the victim is entitled to double indemnity in respect of subject matter of same nature in damage under different circumstances (i.e. where damage is caused by employer or a third party).

      The Report also points out that crews are entitled to claim for maritime lien in respect of wage and indemnity of personal injury pursuant to Article 22 of the Maritime Code. Such claim and exercise of rights are based on clear provisions and do not require application of arrest ship in advance. In order to protect crews legal rights and interests and reduce impact to ship operation caused by arrest of ship, the Report suggests divide the maritime lien procedures into three stages (i.e. claim, exercise, and realize).

      In the end, the Report suggests that, in the process of modifying the Maritime Code and Maritime Procedure Law and drafting judicial explanation in respect of dispute over crew labor disputes, we shall adopt experience and practice of maritime courts in maritime judicial practice to provide effective mechanism support for protection of crews¡¯ legal rights and interests.

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