Let's start with the situation on board. It will come as no surprise to anyone that the organisation of the ship's crew follows strict, hierarchical rules. The highest authority on board is, how could it be otherwise, the captain. This is followed by the officers, engineers and other crew members. In German law, this results from Section 121 of the Maritime Labour Act. According to this, the master has the supreme authority to issue orders. He is responsible for maintaining public safety and order on board and in connection with the operation of the ship. The master therefore not only monitors navigation and compliance with the relevant laws. He also has the unrestricted right to issue instructions to the crew - solely and not in addition to the owner and/or employer. The reason for this is that no one other than the captain is responsible for the safety of the ship, crew and guests. He must not only be able to make quick decisions. Rather, it is crucial that these decisions are also implemented immediately by the crew. In emergencies in particular, this is (super)vital in case of doubt.
The rights and duties of a captain
The captain must also be able to make decisions alone at all times because the state with its executive and judicial authorities is far away on the high seas. There is simply no time for discussions or the involvement of third parties. For this reason, a captain is also authorised to take sovereign measures. In order to ensure order and safety on board, he can confiscate dangerous objects and/or imprison violent persons until the next port, § 121 para. 3 SeeArbG. In the event of criminal offences, he must secure evidence, hear witnesses and draw up reports. He must document births and deaths in the logbook. Depending on the flag state, he can even perform marriages. In addition to his overall responsibility for the operation of the ship, he also has rights and duties under police and civil law. This always applies when the ship is at sea. In territorial waters, the state authorities of the respective coastal state have additional and sometimes overlapping rights of access.
However, this does not mean that the captain is free to act in accordance with the law. On the contrary, he must always observe the applicable laws. He must document his decisions and subsequently be able to justify them in a comprehensible manner. Otherwise, they run the risk of being held legally responsible. The examples from recent history are still fresh in our minds: the captain of the Costa Concordia cruise ship, which ran aground in January 2013 due to nautical misconduct, was sentenced to more than 16 years in prison for involuntary manslaughter. The captain of the 56-metre perini "Bayesian"which sank in 2024 due to extreme gusts of wind, is the subject of an investigation.
Labour contracts and flag states
The relationship between owner and crew is, how could it be otherwise, primarily determined by the underlying employment contract. However, the room for manoeuvre in employment contracts with regard to crew members on ships is greater than in an employment relationship on land - considerably greater in fact! The room for manoeuvre begins with the fact that the beneficial owner of a yacht can decide which owner company becomes the owner of the yacht and where it is based. Owners' companies based in Germany must fly the German flag. This results from §1 of the Flag Law Act. This means that German law applies on board, including German labour law. However, for a variety of reasons, yacht-owning companies are typically not based in Germany, but in Malta or the Cayman or Marshall Islands, for example. The flag on the stern is correspondingly exotic. Since the law of the flag state is decisive for the applicable (labour) law, German law is almost never applied in practice.
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In the vast majority of cases, the law of the chosen flag is less employee-friendly than German labour law. But even if an employee does not have a claim to minimum wage, protection against dismissal or payment of social security contributions by the employer that is comparable to German law, they are not without protection. This is because there are international regulations, such as those from the Maritime Labour Convention of the International Labour Organisation from 2006, which must be complied with. On the one hand, this convention ensures minimum contractual labour standards, such as the right to a written employment contract, the limitation of working hours or minimum rest periods. On the other hand, safe, humane living conditions on board, medical care and a minimum level of social security are defined. Even if the level of protection of the employment relationship under the validity of foreign flags does not correspond to German law, the employee is at least protected with regard to the essential rights.
In principle, these rights also apply if the owner makes use of further room for manoeuvre, i.e. does not hire the crew via its own company, but via a third-party company, i.e. a crewing agency. The latter provides the owner company with the desired crew members as part of an employee leasing agreement. In these cases, there is no contractual relationship between the owner company and the crew member; the crew member can only assert labour law claims against their employer, namely the crewing agency.
Even in these cases, however, the crew member is not completely defenceless. This is because wages claims, i.e. claims for wages, as well as claims for damages due to the death or injury of people, establish ship creditors' rights. Ship creditors' rights are liens that do not require a contractual agreement or even an entry in the ship register. According to Section 596 of the German Commercial Code (HGB), they arise by operation of law and can be asserted directly by the respective (!) owner of the yacht. The ship and its owner company are therefore also liable for claims for wages or damages if the employment contract was concluded with a third party and even in the event of a change of ownership.
In any case, every yacht owner should have an increased interest in treating his crew - whether employed by him or through others - in the best possible way. After all, only a committed and motivated crew will ensure that the yacht and its passengers are not harmed.
Experts for all questions of yacht law
The yacht lawyers Dr Tim Schommer (tim.schommer@clydeco.com) and Dr Volker Lücke (volker.luecke@clydeco.com) have been advising yacht clients in Germany and abroad for over 18 years. They advise on the planning and construction phase, the purchase and sale, the owner structure, yacht operation including insurance, crewing and charter as well as the handling of damages and third-party claims.
