Illegal Contracts

Sep 8, 2009

by Douglas B. Stevenson, Esq.
Director, Center for Seafarers' Rights
The Seamen's Church Institute 

Previously, I wrote about the new POEA standard employment contract and how it eroded rights for Filipino seafarers - rights that seafarers of all nations have taken for granted for centuries. The new POEA contract, which went into effect on September 10, 2000, was challenged in the Supreme Court of the Philippines. The Court temporarily suspended the contract on September 11, 2000 and will decide later whether to permanently invalidate it.

The Philippines situation highlights a dilemma that many seafarers have experienced when looking for a job. They must decide whether to accept an unfair or illegal contract as a condition of their being hired. If they don’t take the contract offered to them, they won’t get the job. We know that this problem is widespread from the many flawed contracts that seafarers have sent to us. Some examples include:

  • Requiring seafarers to buy their own insurance to pay for medical expenses and repatriation costs if they become sick or injured while working on a ship. Under general maritime law and flag state law, shipowners are required to pay these expenses;
  • Forfeiting earned wages if the seafarer know or should have known that he or she was unfit to serve on the ship. Flag state law, general maritime law and international conventions require employers to pay employees for their labors;
  • Prohibiting seafarers from contacting outside organizations like maritime ministries or trade unions to complain about their work or conditions on board their ship. International conventions guarantee workers the freedom of association, including the rights to establish and join organizations. International conventions and national laws allow, and in some cases require, seafarers to report unsafe conditions on their ship.

These are only a few of the many examples of illegal contract provisions that employers have imposed on their workers. Unscrupulous employers require seafarers to accept unfair and illegal contracts because they think that they can get away with it. They know that some seafarers are desperate for work and will accept employment under almost any conditions. They know that some seafarers are not aware of their rights. Most importantly, they know that seafarers will be bound by the contract unless a judge invalidates it, an unlikely prospect given the high costs of taking a case to court.

Even though maritime courts have traditionally accorded special treatment and protections to seafarers, the high costs of litigation usually makes it impractical for an individual seafarer to challenge an employment contract in court. However, when given the opportunity, courts will refuse to enforce seafarers’ contracts that are fundamentally unfair, that are unreasonable or that violate a substantial public policy.  In deciding these issues, judges take into consideration the particular circumstances of each case. For example, a collective bargaining agreement that was negotiated between a trade union and an employer is more likely to be enforced by a court than a contract that was offered to a seafarer on a “take it or leave it” basis.

Illegal or unfair contracts may be difficult to invalidate once you sign them. Therefore, to protect yourself, read and understand your contract before you sign it. If the contract seems illegal or unfair, beware of the employer.

If you have any questions about a contract, seek the advice and assistance of a trade union, port chaplain or the Center for Seafarers’ Rights. Even where there is no practical remedy for an individual injustice, we can help you and other seafarers by exposing unscrupulous employers and their practices; and by working to improve laws protecting seafarers.