Yang Jianhuan v Ningbo Qinning Shipping Agency Co., Ltd. et al in respect of disputes over crew service contract

[Basic facts]

Nantong Tengyun Co., Ltd. was the owner of M/V “Tengyun”, and Nantong Shipping Co., Ltd. was her registered operator and Qinning Shipping Agency Co., Ltd. her actual operator. On 7 August 2015, Yang Jianhuan was employed to serve as master on M/V “Tengyun” for a wage of RMB33,000 per month. Qinning delayed in paying the crew wages, and only paid Yang Jianhuan wages in the sum of RMB46,080 in November 2015. A cargo owner, a building materials company in Sansha, paid Yang Jianhuan wages for three months on behalf of Qinning on 4 February 2016. Qinning had been in arrears with wages of RMB182,400 up to 4 June 2016, and had stopped to pay for the crew maintenance costs since 10 November 2015. Yang Jianhuan thus brought an action before this Court.

[Judgment]

This Court held that although Yang Jianhuan did not enter into a written labour contract with Qinning, an actual labour relation had been created between the two parties. Yang Jianhuan had the right to demand that Qinning shall pay the delayed wages of RMB182,400 plus severance payment equivalent to one month’s wage, i.e. RMB33,000, double pay differences in the sum of RMB231,000 for not signing a written labour contract in compliance with the applicable law, maintenance costs of RMB3,100 and repatriation costs of RMB1,200. Other claims were rejected as they were not legally required or agreed to be paid by the employer or not supported by sufficient evidence. Nantong Tengyun Co., Ltd. and Nantong Shipping Co., Ltd. were not held jointly or severally liable as they were not employer of the crew. As the crew’s maintenance costs did not have maritime liens as set out in the Maritime Law, and the double pay differences and severance payment were not of the nature of labour remunerations, Yang Jianhuan had the maritime liens on M/V “Tengyun” only in respect of the delayed wages and repatriation costs.

Accordingly, this Court made the above decisions and rejected the other claims made by Yang Jianhuan. The parties involved did not file an appeal.

[Significance]

This case has made it clear that crew have no maritime liens in respect of double pay differences, severance payment or reimbursements. Although paid based on a labour relation, they do not reflect the values of the services provided by labourers as they are punitive compensations legally imposed on employers for violating the law. They are not of the nature of labour remunerations and do not fall into the scope of wages or other remunerations entitled to maritime liens as set out in Article 22 of the Maritime Law.