Contribution

The Court of Appeal decided that the officers had no contractual entitlement to severance pay. If severance pay had been due, would this have qualified as a maritime lien? The officers contended that severance pay accrued due as a result of service aboard a ship and was therefore within the definition of ‘wages’. The Court of Appeal disagreed. When a maritime employment contract includes an entitlement to pension payments upon retirement the sums due as a pension could not possibly be regarded as ‘wages’. Modern contracts of employment provided for such matters as bonuses, sick pay and notice of termination of employment, all of which represent the value of the current service on the ship by the seafarer. Severance pay, on the other hand, was a payment in respect of earlier service aboard the ship or different ship. Severance pay was compensation for the termination of employment and not wages. In May 1993, the International Convention on Maritime Liens and Mortgages (the 1993 Convention) was adopted. This was to enter into force six months after 10 states have expressed their consent to be bound by it. This replaces the Liens and Mortgages Conventions of 1967 and 1926 which were never brought into force in English law. It remains to be seen whether the 1993 Convention will ever be brought into force. The 1993 Convention does not define maritime liens but only lists them under Article 4 (Convention liens), namely: master and crew wages including costs of repatriation and social insurance contributions; claims for loss of life or personal injury in direct connection with the operation of the vessel; salvage; claims for port, canal and other waterway dues and pilotage dues; claims based on tort arising out of physical loss or damage caused by the operation of the vessel other than loss of or damage to cargo, containers and passengers’ effects carried on the vessel.