With nautical recreation the order of the day in our Autonomous Community, the question of crew members’ registration and affiliation to the social security system is rarely clear-cut. Though a vessel may have its home port in Spanish territory, its flag is foreign and, in most cases, so is its owner.
To be specific, imagine an occupational accident involving a crew member of such a vessel, where the crew member was not registered in the Spanish social security system at the time of the accident. In such a scenario, would the employer be liable to pay, for instance, incapacity compensation payable to the employee?
In theory, the answer looks logical. If the vessel’s home port is in Spanish territory, the worker is a Spanish citizen and normally resides in Spain, Spanish social security legislation applies and international jurisdiction rests with the Spanish courts.
But such reasoning is refuted by a reasoned judgement handed down by the Labour Chamber of the Balearic Islands High Court on 4 November 2015 (Judge Rapporteur Alejandro Roa Nonide), which argues that, in a great many cases, the Spanish courts’ international jurisdiction must be declined and Spanish social security legislation disregarded.
To resolve the suggested hypothesis, the legislation to consider is Section 25.1 of the Judicial Power Act (“LOPJ”), on the competence of the Spanish courts; LOPJ Section 12, in relation to Section 7 of the Social Security Act (“LGSS”); and Section 1.5 of the Workers Statute (“ET”), on compulsory affiliation to the Spanish social security system.
In addition, according to Article 6.1 of the 1958 High Seas Convention, and Article 92.1 of the 1982 Convention on the Law of the Sea, privately-owned vessels constitute territory of their flag state and are therefore subject to its laws. Similarly, Section 6 of the Rome Convention of 19 June 1980, on the legislation applicable to contractual obligations, states that the first recourse is freedom of choice, except where this should result in the employee being deprived of the protection of mandatory provisions, in which case the law applicable would be that of the country in which the services are provided under contract, adding that the contractual circumstances of the employment may indicate closer ties with another country. This last emphasis demands an examination of the facts of the international elements involved in each case. For the scenario envisaged at the head of this article, it is the writer’s understanding that neither national elements which could attribute the protection of the eventual claim to the Spanish legal system nor the provisions of Section 126 of the LGSS can be considered applicable.
We would therefore need to consider, for example, whether the workplace was exclusively the boat, even when the employee was carrying out repair and maintenance work; whether work was being carried out on land; whether the vessel had navigated international waters; etc.
The fact that the boat, as a workplace, has its home port in Spanish territory does not mean that the services have been provided in Spain, since the vessel has a specific territorial consideration under the cited international legislation; and the term “home port” is clearly used in Spanish legislation and jurisprudence to situate a workplace, which for sea-based activity is the vessel itself, in cases in which a territorial dispute is a Spanish internal matter.
Beginning with the application of the legal precepts detailed above, it is worth pointing out that Section 25.1 of the LOPJ, on the obligations of the employment contract and the competence of the Spanish courts, requires that the services be carried out in Spain or the contract entered into in Spanish territory; that the respondent have either a domicile or an agency, branch, delegation or other type of representation in Spanish territory; that both employer and employee be Spanish citizens, irrespective of where the services were provided or the contract was entered into; and in addition, in the case of a seafarer’s employment contract, that the contract be preceded by an employment invitation received in Spain by a Spanish employee. The third article of the same section, on social security claims, states that the Spanish courts are competent in cases of claims brought against Spanish entities, or entities that have a domicile, delegation or other type of representation in Spain. These circumstances are not concurrent in our suggested hypothesis and therefore the competence of the Spanish courts must be declined.
With regard to substantive and national regulations, Section 1.5 of the Workers Statute sets forth the workplace as the vessel, situating the vessel in its home port in a Spanish province, but the legal provision is for the purposes of Spanish vessels in order to establish a point of reference, which logically has to be where a vessel conducts the majority of its maritime activity, deemed by High Court jurisprudence to be its primary actual activity centre. Furthermore, the location of the vessel, despite being moored in a Spanish port on a regular basis, is not to be regarded as a determining factor when – and these are the truly decisive elements – the vessel’s flag state is foreign, and the employee’s services are provided on the vessel. Neither are we dealing with a case such as that of the Balearic Islands High Court judgment we referred to earlier, given that Spanish labour legislation would be applicable to work carried out by Spanish workers under contract in Spain to Spanish companies abroad.
Likewise, Section 7 of the LGSS sets forth the obligation of Spanish citizens and foreign nationals resident in Spain to be included in the social security system whenever they are engaged as employees in activities in Spanish territory. Given that the services are provided on a foreign vessel, the principle of territoriality cannot be extended solely on the grounds of the location of the vessel, since in that case all crew members of foreign ships would be obliged to affiliate to the social security system for the mere fact of mooring in Spanish territory. The fact that the craft may have been outside the territory of Spanish ports must also be taken into account.
Neither does the claim that the above international conventions are not applicable hold any water, since, as we have seen, said conventions state that privately-owned and merchant vessels are the territory of their flag state and subject to its laws. Certainly the competence of the Spanish courts to hear social claims is determined by the judicial power legislation examined earlier in this article, and it is the principal legal configuration on competent jurisdiction. It is equally true, however, that the international conventions point to the flag state as an essential element in deciding to which country the craft belongs, in international waters as well as elsewhere. And for the purposes of the Spanish social security system, Spanish regulations determine the international forum, as we have seen.
Article 6 of the 1980 Rome Convention on the legislation applicable to contractual obligations states that, in cases involving foreign elements, freedom of choice is the first recourse. That said, we should consider the caveat therein which states that “unless it appears from the circumstances as a whole that the contract is more closely connected with another country, in which case the contract shall be governed by the law of that country.” Those circumstances must therefore be taken into consideration in an investigation to determine whether the international elements are successive and substantial. Among the elements to consider are the employer or respondent company’s nationality; the vessel’s flag state; the provision of services on board; the terms of the employment contract; time spent away from the home port; whether the whole crew, as well as the captain himself, had prior knowledge of the situation and received the appropriate annual remuneration for not being affiliated to the Spanish social security system; and whether the company had private medical insurance covering employees’ health care needs.
These circumstances will inevitably prevail and impede any consideration of the existence of closer legal ties with the Spanish state: personal family ties, such as the employee’s family’s domicile and nationality, are insufficient for the purpose. To clear the obstacle of the application of the flag state’s nationality, the doctrine of the flag of convenience could be brought to the table, citing a number of exceptional High Court of Justice judgments which have examined Article 6 of the Convention of Rome in order to maintain the link with the legal system most connected with the contract. For instance, a Canary Islands Court judgement of 17 October, 2013, examined the case of a Spanish citizen who took up employment in mixed nationality companies, but in order to do so most of the elements of the seafarer’s employment contract had to link that employment relationship to the foreign state in question. Another example is the Galicia High Court of Justice judgement of April, 2004, which ruled that the first factor to be taken into consideration is the choice of law made by the parties, and that flag state law may be rendered ineffective if in fact closer ties exist with another country. The judgement concurred that the employee was Spanish, had previously worked for a Spanish company, where the Spanish employment invitations were received, and all that remained was the respondent company’s domicile, which failed to constitute sufficient grounds in this case.
Certainly, we are dealing with a specific provision of service, in a sea-going craft, whereby the singularity of the location of the provision of services is a key factor that lends concrete characteristics to the controversy. Notwithstanding, and in the writer’s opinion, taking into account all of the above, one must conclude an absence of obligation to affiliate and to register, due to the absence of Spanish jurisdiction to hear cases like the one hypothesised here, as a result of which companies cannot be decreed directly liable, nor can agent entities be held secondarily liable.