The Labor Court: no jurisdiction in the event of unfair dismissal of a sailor

On September 15, 2021, in the case ‘Albert Gyorgy vs Crystal River Cruises Manning Ltd’, the Court of Appeal in its lower court, presided over by Judge Lawrence Mintoff, declared, inter alia, that the Labor Court does not was not the competent court to decide on the case of wrongful dismissal of a sailor. The ordinary courts were competent.

Mr Albert Gyorgy, Chief Engineer, has brought unfair dismissal proceedings against his employer, the Maltese company Crystal River Cruises Manning Ltd, in the Labor Court after his employment on board the ship ‘Crystal Bach’ was abruptly terminated , allegedly, without justification, valid in law on November 15, 2019.

He claimed to have been diligent in his work and that he had never had any incidents in the past, nor had he ever received a warning about his conduct prior to his dismissal.

Recalling the incident that led to his dismissal, Gyorgy explained that on the day he returned home, he obtained permission from the captain to disembark the ship early before it arrived at its final destination. This is so as not to miss your flight the same morning. Before leaving the ship, he arranged for another engineer to replace him in accordance with maritime requirements, which required that an engineer be on board at all times.

River Cruises Manning, on the other hand, responded by firing him instantly.

Gyorgy protested and challenged his employer’s decision to terminate his employment as being unfair and taken for no good reason and without hearing his version of events.

Faced with this situation, Gyorgy asked the Conseil des Prud’hommes:

(i) declare that he has been unfairly and unlawfully dismissed from his employment and that his dismissal is contrary to the provisions of the Malta Employment and Industrial Relations Act, Chapter 452 of the Laws of Malta, and

(ii) Order his employer to pay him adequate compensation.

Crystal River Cruises Manning Ltd, in response, challenged the jurisdiction of the Labor Court to decide this dispute. His main argument was that the Tribunal had no jurisdiction over “seafarers” as that term was defined in the Merchant Shipping Act and that Gyorgy, as chief engineer, was indeed a “seafarer”.

The defendant further stated that the applicable law governing Gyorgy’s contract of employment was the Merchant Shipping Act, Chapter 234 of the Laws of Malta, which assigned jurisdiction to the ordinary courts and not to the Industrial Court.

Section 39 of the Employment and Industry Act expressly excluded seafarers employed on ships under the provisions of the Merchant Shipping Act from the scope of its termination provisions:

“Section 39: The provisions of sections 36, 37 and 38 do not apply to seafarers employed on board ships under the provisions of the Merchant Shipping Act; and in the event of a conflict between any of the provisions of said law and the provisions of this law, the former shall apply.

On the merits, he alleged that it was wrong to say that Gyorgy was denied the opportunity to justify his actions. The decision was made only after considering his defence. The employer also referred to a specific clause in the employment contract which provided, among others, that employees who disembarked from the vessel without permission could be terminated at the discretion of the employer without notice.

On February 8, 2021, the Tribunal affirmed its jurisdiction and dismissed Crystal River Cruises’ objection to jurisdiction.

He held that he was not deprived of his jurisdiction by the general exclusionary provision, section 39, because he considered the role of a “chief engineer” to be akin to that of a “captain”. of a ship and therefore did not fit the definition of ‘sailor’.

Reference was made to a similar case of unfair dismissal of a ship’s captain (Appeal No. 30/2015 Judge Anthony Ellul) where the Industrial Tribunal was held to have exclusive jurisdiction to decide a dispute relating to the unfair dismissal of a captain under the Employment and Industrial Relations Act.

A ‘master’ was not included in the definition of ‘seaman’ and fell within the scope of the Employment and Industry Act. By analogy, the Tribunal concluded that the same reasoning applied in the circumstances of this case.

She also noted that Gyorgy had granted a special power of attorney to his lawyer, which had been submitted and accepted by the Court, and that the necessary formalities had been complied with.

Aggrieved by the Tribunal’s decision, Crystal River Cruises appealed, seeking its removal and asking the Court to uphold its claims – primarily that the Tribunal lacked jurisdiction to hear this case and that the Merchant Shipping Act, Chapter 234 of the Laws of Malta applied in the circumstances.

River Cruises Manning argued that the termination provisions of Chapter 452 (Employment and Industrial Relations Act) were not applicable and that the term “seaman” also included a chief engineer.

River Cruises Manning recalled that it was the ordinary courts that were competent to settle this dispute. The relevant provisions of the Merchant Shipping Act were sections 114, 129, 129A, 130, 141, 142 and 145.

He further argued that, even if this Court were to find that the Tribunal had jurisdiction, it should apply the special provisions of our Merchant Shipping Act, Chapter 234 and not Chapter 452.

The Court accepted River Cruises Manning’s appeal.

The Labor Court was not competent

The Court agreed with River Cruises Manning that the position of “Chief Engineer” fell within the definition of a “sailor” as defined under the Merchant Shipping Act, and that the Merchant Shipping Act regulated his contract of employment rather than the Employment Act and the Labor Relations Act.

This meant that the ordinary courts were competent to hear this case and not the labor court.

The court did not consider a “chief engineer” to be co-equivalent to a ship’s captain.

The provisions of the Merchant Shipping Act (Chapter 234) including sections 114, 130, 145 and sections 169 et seq. applied to seafarers, such as a chief engineer, serving on ships registered in Malta, the court pointed out. It was a ad hoc law relating specifically to the employment contract of seafarers and it follows that this law must apply to the present dispute.

For these reasons, on September 15, 2021, the Court of Appeal rendered its judgment retracting the decision of the Labor Court of February 8, 2021, and declaring that the Court did not have jurisdiction to hear this case of wrongful dismissal.

Karl Grech Orr is a partner at Ganado Advocates

The author would like to thank Sasha Muscat, attorney at Ganado Advocates for her assistance in preparing this legal report.

Thelma J. Longworth