Dayworkers are always a contentious point with regards to insurance. All too often, no employment contracts are signed and in the event of a claim, the process becomes complicated in trying to prove whether the owner is liable for the dayworker’s injuries or death.
So what status does a dayworker have on a yacht?
This depends on the flag of the vessel, its use and the tonnage of the vessel (MLC). If the dayworker is to be considered a crew member, all insurance arrangements should be made as per the rest of the crew, according to the flag state requirements of the yacht and applicable legislation: Contract, Medical insurance, Maritime Labour Convention, etc.
If however, the dayworker is not considered a crewmember or seafarer, where does that leave them? Are they a subcontractor? Are they a temporary employee? And how does an owner protect themselves against possible liabilities towards these.
In insurance it is an implied warranty that all activities are lawful.
Here local labour legislation comes into play, making things a little bit more complicated. Most insurers will only cover liabilities towards dayworkers if they are in compliance with all local legal requirements. In the event of a serious claim questions like this may be asked:
Is there a contract between the parties?
Are they fit for work?
How many hours do they work a day?
Do they pay their corresponding taxes?
Do your dayworkers have a work permit in the country?
Unless full legal compliance is warranted, insurers could turn around and refuse a claim. In order not to find yourself in this situation we recommend you:
1) Check with your flag state whether, on your vessel, dayworkers are considered crew or not.
2) Check local labour legislation with regards to temporary work.
3) Make sure your dayworker complies with the above before hiring them.
4) Create a dayworker contract to define the labour relationship.
This all sounds complicated but, with an often unregulated work relationship between a dayworker and ship owner, it is our duty as insurance providers to advise on the possible risks and to navigate our clients through this terrain, maintaining full scope of cover where possible.
Be aware that as soon as you place a subcontractor on a crew list, these may automatically acquire seafarer status and as such the ship-owner acquires all legal liabilities towards these new crew members. This issue has been specifically put to the MCA and under British registry this is the case, so to all captains:
Be aware of the liabilities you acquire by placing anybody on your crew list that is not strictly a crew member of the yacht.
In respect of the P&I Clubs, liability to dayworkers should be insured by the policy and it does not matter to them if classed as seafarers or third parties. If the policyholder has a liability to them, the Clubs will meet the claim, providing none of the policy exclusions apply.
As highlighted in this article, from an owner’s point of view, it does matter whether they are classed as one or the other. Being a seafarer brings a number of obligations as we know. To summarise, there is no firm guidance on how they would be treated, as each flag state is free to apply substantial equivalencies when implementing the Maritime Labour Convention (MLC), which means that different approaches are allowed and the owner must check with their flag to understand their particular approach.
Pantaenius has been providing yacht owners around the world with tailored insurance solutions for over 50 years. Over 90,000 yachts are insured with Pantaenius today. A 24/7 in-house claims department and a global network of 35,000 contacts worldwide guarantee fast and efficient claims handling wherever you are.