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The appearance of an employment contract for Chinese seafarers may be innocently straight forward. Ready to sign? Well, think again - the implications between the lines may take you by surprise.

To start with, in an event of employment dispute, most of Chinese seafarers would naturally pursue their claims in China where Chinese law applies. Any other contractual law and jurisdiction provisions will then become irrelevant, because the Chinese labour tribunal and Chinese court will take jurisdiction under such circumstances.

In accordance with Chinese law, a foreign ship owner should not enter into direct employment relationship with a Chinese seafarer. Ships with foreign flags and/or foreign registered owners (including Hong Kong and Taiwan flags and owners) are required to engage Chinese crew through certified local manning agents.

A list of these certified manning agents could be obtained from the local Maritime Safety Administration (referred as "MSA").

Domestic employers, which in this context, consist of Chinese ship owners and manning agents (including those that are authorised by foreign ship owners to recruit Chinese seafarers), must place their crew in the Work-related Injury Compensation Scheme under Chinese social welfare system. Failure in compliance is deemed violation of local regulations and is subject to penalties.

We have encountered arguments where it was said that additional cash had been distributed to each individual crew to facilitate direct purchase of "Work-related Injury Insurance" cover. Unfortunately this defence has no chance of success - work-related injury insurance cover could only be (and must be) taken out by employers for their employees. 

In addition, some of the regional MSA have issued orders, requesting ship owners to secure market Personal Assurance for their crew as a mandatory condition for sea service employment.

Compensations available to crew under social insurance schemes (especially work-related injury insurance) and commercial personal insurance covers, are assessed independently from ship owner's contractual liabilities. 

For details and further clarifications on the subject, please feel free to contact us.