Social Security • Employer’s Philosophy • International HR Strategy
Defining the benefits of your maritime personnel depends on statutory obligations and on your company’s own employment philosophy.
Statutory social security obligations and international minimal protection standards
Regarding seafaring personnel, whether employed in the merchant navy, dredging, deep sea oil & gas exploration and production, cable laying or windmill parks, it is the ship’s country of registration or the “Flag’s State” which determines the Social Security and labour law obligations for seafarers employed on board.
The Maritime Labour Convention (MLC 2006) has also defined a number of minimal statutory obligations which shipowners or shipmanagers have to comply with in their capacity of employer:
Mandatory medical care provisions, on board and ashore
Mandatory financial obligations to bear the consequences of occupational injury and illness occurred during the period of engagement
Employer’s philosophy & Non-statutory Seafarers’ benefits
Supplementary seafarers’ benefits are designed to complement statutory obligations.
Every shipowner is aware that supplementary seafarers’ benefits contribute to attract, retain, reward and protect its seafaring workforce, while affecting at the same time its employer’s image.
Supplementary seafarers’ benefits are non-statutory and are therefore solely defined by the shipowner’s own HR philosophy.
It is important to be aware that any HR requirement regarding Seafarers’ Benefits can be met by one of the following solutions :
While Group Insurances are always to be subscribed by the employer, their funding can either be employer-funded, employee-funded via payroll deduction or a combination of both.
Group Insurances can be subscribed for one single benefit up to all four benefits (Healthcare/Life/Disability/Pension), can be limited to a number of ships, to specific ranks on board and can also include a number of eligibility provisions
The subscribed benefits by the shipowner can provide very different levels of protection, varying from basic up to generous indemnities, with a few or many contractual exclusions
International HR Strategy for maritime personnel
The P&I Club provisions regarding seafarers’ indemnities are primarily intended to cover the employer’s liabilities in case of occupational accident and its consequences in the event of death, disability or medical care expenses.
P&I Club protection regarding illness is in principle limited and coverage generally ceases as from repatriation.
Regarding the risks of LIFE, DISABILITY or MEDICAL CARE, it is noteworthy that all insurers have similar claims experiences as to their cause: about 10% is caused by accident (including occupational and non-occupational accidents), while 90% is caused by illness. This explains not only the prevailing low insurance premiums which apply for accidental risks, but also indicates that there may be a serious coverage gap regarding the illness risk and its consequences in the event of death, disability or medical care.
Seafaring personnel, employed on ships flying a Flag of Convenience and solely covered by P&I Club provisions, are most likely to be faced with this illness related coverage gap.
As for seafaring personnel employed on ships flying a EU flag’s state, EU social security schemes are providing essential protection regarding illness and its consequences in the event of death, disability or medical care expenses. However these statutory indemnities may be insufficient and require supplementary coverage in order to achieve the desired protection.