COOPERATION

Buyers will usually want to buy the yacht, rather than its owning company, and re-register it in the name of their new owning company – enough though this is a more complex route than simply transferring company shares. There are various reasons for this, but the most important is that an owning company’s debts, lawsuits, unpaid taxes and other obligations may not be immediately apparent. Debts can still attach to a yacht directly, but at least such risks are minimised.

The upshot of this is that the existing crew’s employment has to come to an end. But they can’t simply be ‘let go’. There are legal and financial obligations that sellers must meet ahead of the sale. As soon as you’re minded to sell your yacht, you or your representative needs to discuss this with your captain(s) to ensure their full engagement and cooperation. The captain will be instructed to disseminate this information to the crew. The vessel must look her best for photoshoots, and the pre-purchase survey must not highlight missed maintenance.

Recruitment is an expensive process for buyers. Re-hiring makes sense – especially in the case of engineers who will know the vessel’s systems and technical idiosyncrasies better than anyone, but the existing crew’s expectations need to be managed. The marketing period is their opportunity to shine.

STATUS

Nearly all crew will, as a matter of law, have the status of employee – but this isn’t always the case. Specialist technicians might be engaged on board in respect of a specific project, but they’re likely to be contractors and won’t have the same rights.

CONSULTATION

With redundancy on the horizon, employers are obligated to consult with crewmembers, both on an individual basis – and a collective one if 20 or more are to lose their jobs. This is not just a formality; it's about ensuring a transparent and fair process. For both types, employers should provide a written notification of any potential redundancy, and a representative should discuss the situation in person – with records of this kept.

NOTICE

How much notice period is required depends on the length of service, i.e. 1 week’s notice for 1 month to 2 years of service, 1 week’s notice per year of service for 2 to 12 years17, and 12 weeks’ notice for 12 or more years of service. If the employment contract specifies a longer notice period then this must be honoured. Of course, this is a problem where the sale of a yacht is to complete within a short timeframe. So, employers can offer pay in lieu of notice if the contract allows for this, or otherwise the amount will be that which is mutually agreed.

REDUNDANCY PAY

Employees who have at least two years’ continuous service will be eligible for redundancy pay, calculated on the basis of age, length of service and pay.

REPATRIATION

Repatriation is an essential seafarer’s right, enshrined in the Maritime Labour Convention (MLC) 2006. Employers are obligated to cover all costs including travel, accommodation, and subsistence until the individual is safely home. The home country should be stated in the employment agreement, and if that’s where the vessel is then the crewmember will have been repatriated simply by stepping off the passerelle.

RECORDS

While the importance of record-keeping throughout cannot be over-emphasised, the most important documents to obtain are the Crew Release Letters. Drafted by the seller’s lawyer, these are addressed to the seller and signed by each crewmember, confirming that they have received everything owed to them and have not claim against the owning company or the yacht. Once signed, while not a complete bar to legal action, this provides the best evidence that the crewmember concerned has no claim against the seller. The provision of a full set of such from each and every crewmember is likely to be a condition of the sale, so a refusal to provide one can be disruptive. Crewmembers can also bring a later claim in an Employment Tribunal. This is a public forum, akin to a court, in which beneficial owners can be – and have been – named.

PREPARE EARLY

For a long time, it was assumed that if crew didn’t like the fact that the yacht was being sold then that was simply tough luck. But, with easier access to advice, and with seafarer unions (especially Nautilus) more willing to act on behalf of individual members, it is important to prepare crew for a sale as early and fully as possible.