Recently, certain difficulties have arisen in interpreting and applying the regulations defining legal relationships between a fishing vessel owner and fishermen working on board the vessel. There are some opinions that fishermen working on board a fishing vessel can be recruited on the basis of legal labour relations, i. e. they perform certain functions under an employment contract concluded with the employer, namely, the vessel owner. However, there are no clear legal grounds for such consideration.
Essential elements of legal labour relations
First of all, it should be noted that, in accordance with the applicable Labour Code of the Republic of Lithuania (hereinafter referred to as the LC), “an employment contract shall be an agreement between an employee and an employer whereby the employee undertakes to perform work of a certain profession, speciality, qualification or to perform specific duties in accordance with the work regulations established at the workplace, whereas the employer undertakes to provide the employee with the work specified in the contract, to pay him the agreed wage and to ensure working conditions as set in labour laws, other regulatory acts, the collective agreement and by agreement between the parties”. In practice, it is not so simple to distinguish between legal labour relations and civil legal relations. In other words, it is hard to determine when a person works under an employment contract and when it is a subject of civil law, i. e. an agreement for the provision of certain services or performance of works. The answer to this question can be found in the case-law.
In its case-law, the Court of Cassation, when interpreting the legal nature of an employment contract, stated that the essential elements of an employment contract established in Article 93 of the LC distinguishing it from other contracts are as follows: 1) the employee performs work of a certain profession, speciality, qualification or performs specific duties; 2) the employee complies with the work regulations established at the workplace. The first element referred to above means that the employee performs a certain job function defined by specific characteristics rather than carries out a concrete task. The second element means that the employee, while performing the job function, is not independent, he/she must comply with legitimate instructions of the employer (Ruling of the Supreme Court of Lithuania of 27 June 2006 in Civil Case No 3K-3-387/2006). Thus, in case of labour relationships, the employee and the employer are linked by a subordinate relationship, which is absent in civil agreements; and this means that the performance of job functions is inseparable from the employer’s control and fulfilments of the employer’s instructions (Ruling of the Supreme Court of Lithuania of 15 March 2011 in Civil Case No. 3K-3-114/2011).
Legal basis for work on board fishing vessels
One may work on board fishing vessels on the basis of both legal labour relationships and civil legal relations. The applicable legislation and the existing case-law allow arriving at such conclusion.
The Law on Merchant Shipping of the Republic of Lithuania clarifies that the term “seaman” means any person, including the ship master, employed, fired or engaged in any kind of work on board the ship, except for persons whose main job is ashore and who are engaged only in temporary work on board the ship which is unrelated to the ship’s daily operations. Thus, the Law provides for different legal forms of the basis for the seaman’s activity on board the ship. A seaman can be both “employed”, which is perceived as legal labour relations, and “hired or engaged”, as provided by civil law, on board the ship. Based on such independent legal grounds, the seaman can perform respective functions on board the ship. Such arguments have been confirmed by the case-law as well. In Administrative Offence Case No. ATP-352-255/2015 of 27 May 2015, the Klaipėda Regional Court noted that neither the Law on Merchant Shipping of the Republic of Lithuania nor any other normative act prohibits vessel owners to receive certain services on the basis of services agreements. Hence, the applicable legal regulation does not oblige a vessel owner to hire fishermen for work on board the vessel only on the basis of an employment contract within its meaning in labour law. The applicable regulations allow concluding with fishermen, their representatives or other entities other, i. e. civil, agreements, for example, for the provision of services or performance of works.
The fact that members of the ship’s crew can act on other grounds than the labour relations with the ship manager is directly confirmed by the Maritime Labour Convention of the International Labour Organisation (the Republic of Lithuania ratified it by Law No. XII-367 of 13 June 2013) in Paragraph 1 of Article “Standard A2.1 – Seafarers’ employment agreements” which reads as follows: “Each Member shall adopt laws or regulations requiring that ships that fly its flag comply with the following requirements: a) seafarers working on ships that fly its flag shall have a seafarer’s employment agreement signed by both the seafarer and the shipowner or a representative of the shipowner (or, where they are not employees, evidence of contractual or similar agreements) providing them with decent working and living conditions on board the ship as required by this Convention”.
It is noteworthy that recently, i. e. on 11 October 2016, Lithuania ratified the Work in Fishing Convention adopted in Geneva on 14 June 2007 (hereinafter referred to as the “Convention”). The Convention provides that “fisher’s work agreement means a contract of employment, articles of agreement or other similar arrangements, or any other contract governing a fisher's living and working conditions on board a vessel”. This provision specifically stipulates that a fisher can perform functions on board a vessel on the basis of both legal labour relations and other contracts and civil legal transactions. This position is reinforced by the subsequent provisions of the Convention which provide that it is the responsibility of the fishing vessel owner to ensure that each fisher has a written fisher’s agreement signed by both the fisher and the fishing vessel owner or by an authorised representative of the fishing vessel owner and it is also noted that if fishers are hired not by the fishing vessel owner, the fishing vessel owner must have the documents proving the conclusion of contracts or similar agreements. This provision is a solid legal argument to claim that a fisher can perform functions on board a fishing vessel on the basis of both an employment contract or any other civil agreement.
Neither the legislation of the Republic of Lithuania nor the directly applicable EU laws provide that all persons on board fishing vessels must be employed by the ship manager as employees working under employment contracts. It is a common practice worldwide that some persons on board of ships owned by fishing companies are not employees of these companies but they act on the basis of other legal relations during a particular fishing voyage, i. e. they provide services and perform works while being the employees of other entities under works, services or other agreements. There are no provisions prohibiting such legal relationship in Lithuania; therefore, the vessel owner has the right to choose or hire employees directly as the employer on the basis of legal labour relations, or to purchase services and/or works from other persons under civil transactions.
By Inga Klimašauskienė, Associate Partner, law firm GLIMSTEDT