FJK Law Office

Q&A on Legal Topics

Can remuneration be claimed for salvage efforts made under no obligation?

 A ship is an extremely expensive property, with a good deal of valuable cargo on board. In case a ship has a marine accident, other people are not legally bound to rescue it.
 However, from the aspects of both socioeconomics and the safety of maritime traffic, calling for help is a legitimate requirement. Therefore, in order to encourage rescue efforts in a maritime accident, the right to claim salvage remuneration is granted to those who effected the rescue under no obligation to do so.
 Historically speaking, as is widely alleged, prohibition of plunderage with punishment had been the only precaution for the protection of wrecked goods, until Louis XIV issued a maritime imperial edict that promoted salvage aggressively by giving a reward to salvors.
 Success of salvage is a prerequisite for maritime salvage to be admitted as such. This is called ‘no cure, no pay’, a time-honored principle in marine laws. In case that such salvage is unsuccessful, you cannot claim any remuneration including actual cost. This rule aims to preclude fake salvage, but it could also make salvors hesitate in getting involved in salvaging efforts.
 Furthermore, according to the commercial law, rescuing only human lives is not considered maritime salvage, and therefore no salvage remuneration is not paid in such a case. This is based on the notion that saving people comes from a human instinct and therefore should not be done for money. However, in case both lifesaving and retrieval of property were done at the same time, those who engaged themselves in lifesaving are also qualified to receive their share of salvage remuneration from those whose ship or cargo was salvaged.

 By comparison, French law prescribes this issue more explicitly than Japanese law, saying on the ‘no cure, no pay’ principle, “In case the salvage effort is unsuccessful, the salvor shall not be granted any reward (Article 10, Paragraph 2 of the Law on Maritime Accidents),” or on lifesaving, “A rescuee is under no obligation to pay any remuneration (Article 17, Paragraph 1 of the said law).” The Salvage Treaty of 1910 also has stipulations to the same effect (Article 2, Paragraph 2 & Article 9, Paragraph 1).


What's general average?

 General average means damages and expenses incurred as the result of the captain’s voluntary unusual disposal of the ship and its cargo for the purpose of avoiding the imminent peril, in an emergency when the ship and its cargo are exposed to the common danger due to accidents like collision, stranding and fire. According to this legal principle, these damages and expenses are allotted to those with an interest in the ship, its cargo, etc., who has made a profit, in proportion to their values exposed to the common danger.
 For example, in the case where the imminent peril has been avoided by jettisoning a portion of the cargo to make the stranded ship lighter and then saving the remainder with a tugboat, the jettisoned portion and the salvage fee are considered ‘general average’ damages and expenses respectively.
 In this case, the jettisoned cargo is regarded as a sacrifice to save the whole ship and its cargo, and therefore it is not fair for only the cargo owners to bear all the damages. The damages are thus contributed not only by each owner of salvaged ship, cargo and freight revenue, but also those who have suffered damages as general average. The reason why the injured party also has to contribute is that otherwise, only the latter will end up getting compensation for all their damages from the party interested in the salvaged property, thus creating another unfair situation (Article 789 of the Commercial Law; Article 17 of YAR).
 Concerning general average, we have an internationally accepted covenant for regular transaction called “York-Antwerp Rules” (YAR); it is incorporated into most B/L clauses, charter parties and marine insurance clauses for ships and cargo, and therefore, in reality, its marine commercial law is applied only expletively in each country.
 This time-honored custom dates back to the Rhodian Sea Law, compiled about 900 B.C. in Rhodes, an island in the east of the Mediterranean Sea, which is said to have already set out all the interested parties’ need to pay their contributions for damages incurred by jettisoning to make the ship lighter.

 By comparison, French law also has provisions on general average (See Chapter 3 of the Law on Marine Disasters). Concerning the allotted liability for general average, however, it simply involves the ship, its cargo and thus excludes the party injured by general average (Article 29 of the said law).


What's maritime lien?

 As a rule, when creditors are numerous and debtors’ property falls short of overall lending portfolios, each creditor is treated on an equal basis.
 However, if seamen’s salary claims arising from employment agreements were treated equally with other general large claims in the case of compulsory execution, etc., dividends would become nominal, which would be too harsh on the seamen.
 Therefore, the commercial code prescribes such claims as those with maritime lien as collateral, so that they can be collected in priority to other claims. Maritime lien requires neither possession nor public notice, and even has priority over ship mortgage. Objects of maritime lien are the ship pertaining to the accident, its equipment and the freight that has not been received.
 Other secured claims of maritime lien include pilotage dues, tug hires, claims needed for the continuation of voyage while at sea (repair expenses, etc.), claims for purchase money or contract money in cases where a ship is purchased or sold or where a ship has not been launched after it was built, etc.
 For forcible execution, you have only to submit a document that proves the existence of maritime lien, and therefore, no decision of the court is necessary. If you obtain a delivery order of a certificate of ship’s nationality from the court in advance, enforcement officers will be able to seize such certificate as soon as the ship drops into a port to put the ship under an embargo. This will be convenient for an enforcement in case of a short port call. After the seizure pursuant to the decision to start an auction, if the shipowner offers a security deposit for the total amount of claims, the ship will be released, and such deposit will be the object of enforcement from then on.
 In case of the seizure of a foreign ship, since the scope, etc. of maritime lien varies depending on the country, it becomes a subject of discussion which country’s law should be applied. There may be a contention, but in the precedent of 1992 at the Tokyo District Court, Japanese law, which is law of the forum, was applied to both the feasibility and the validity of maritime lien, as the governing law. This will need no examination of foreign laws and therefore enable a speedy enforcement.

 In French law, by comparison, such purchase money or contract money is not protected as secured claim of maritime lien (Article 7 of the Law on the Status of Ships). On the other hand, as for the governing law, I understand that the validity of maritime lien follows the law of the forum, but that its feasibility obeys the law of the place of contract.


Can a shipowner's liability limited?

 According to the commercial law, it is a general rule that a shipowner should assume an unrestricted liability to the damage that the captain or other seamen caused to others due to its travel errors, etc. Moreover, the shipowner itself is held liable without fault.
 However, maritime companies are routinely exposed to the dangers at sea, and it is difficult for a shipowner to take control of the acts of its seamen while they are at sea. Not only that, once a maritime accident occurs owing to an error, damage can be so enormous as to threaten the existence of a maritime company, which may play a part in the state economy as well.
 Therefore, in a given circumstance, shipowners, etc. may claim limitations on their liability in accordance with the Shipowners’ Limitation of Liability Act. This institution dates a long way back to the Middle Ages, when the “Consolato del Mare”, a collection of maritime laws was compiled in the Mediterranean area. In concrete terms, it is the Shipowner, etc., or Salvor, or Servant, etc. who can limit the liability.
 In order to be qualified for a limitation of liability, shipowners, etc. need to file for a commencement of the procedure for limitation of liability with a district court having jurisdiction. By doing this, claims will be distributed to the creditors within the limits of a certain amount fixed on the basis of the ship’s tonnage in accordance with the said law.
 Typical claims with limitation of liability include claims based on damage to the passengers, cargo, etc., on the ship in question claiming limitation of liability, or those based on damage to the passengers, seamen, cargo, hull, etc. of the other ship that collided against the ship in question.
 However, there are also some claims whose liability is exceptionally not limited, though applicable to the limited claims stated above: for example, a claim against the shipowner, etc. of a domestic vessel in case damage was done to the people aboard it in a fatal and injury accident. As small domestic vessels tend to take a large number of passengers, compensation per capita will be small in value, if the maximum limits on the basis of the ship’s tonnage is applied. These unlimited claims are especially intended to protect victims of injury accidents on the domestic vessels which are not regulated by the convention on limitation of liability of shipowners.

 By comparison, French law also limits a shipowner’s liability (Chapter 7 of the law on the status of ships). However, it does not stipulate the above-stated claim against the shipowner, etc. of a domestic vessel for physical injury or death, as ‘unlimited claim’ (Article 60 of the said law).


Does the liability of a carrier of goods on an ocean vessel have limitations?

 According to the Civil Code, compensation for damage is assessed within the extent of damages that have a legally sufficient causal relationship with default, and includes special damages such as profit from resale, besides general damages. Therefore, in case of loss or damage to goods that results from negligence of their carrier by sea, too, the carrier should be liable to pay compensation for any such loss or damage.
 However, for ocean freight forwarders that deal in a large quantity of goods at an inexpensive rate, claims for big indemnity or those for special damage from each of the claimers, including consignees, could become a great financial burden and could also protract a conflict on compensation assessment in such a case.
 In the case of an ocean vessel, therefore, claimable amounts are in principle fixed in accordance with the market price of goods at a scheduled time and place of discharging as per contract, and stylized in a direction toward exclusion of special damage, pursuant to the International Carriage of Goods by Sea Act. Not only that, total maximum liabilities are also set.
 However, it is not fair to put a limit even on the case where a carrier’s responsibility is heavy. Therefore, if damage was intentionally caused by the carrier himself/herself or caused by a reckless act by the carrier himself/herself knowing that the act may result in damage, limitation of liability is not applied, and the carrier becomes completely liable for such damage.

 By comparison, French law likewise stipulates that the carrier cannot invoke the benefit of the limitation of its liability if it is proved that the damage intentionally caused by his/her own act or omission, or caused by a reckless act by the carrier himself/herself knowing that the act may result in damage (Article 28 (5) a) of the Law on Charter Contract and Contract of Carriage by Sea). Both countries have ratified what is called the Hague-Visby Rules and therefore follow the same stipulations.
 On the other hand, Montreal Convention, applicable to international air transport cases, also sets the limit for total maximum liability, and has the similar stipulations on exclusion of liability limitation for delayed arrival of passengers or damage to hand-carried baggage (Article 22 (5)). In the case of damage to air cargo, however, the limit for total maximum liability cannot be overrun even if it is caused intentionally.


What is the link between worker’s compensation and compensation for damages?

 In case of occupational accident, in order to achieve the worker’s easy and quick recovery of his/her damage, we have the worker’s compensation system to apply flat-rate compensation, while holding his/her employer liable, whether negligent or not.
 To be qualified as victim of occupational accident, he/she should meet the following two requirements: the accident happened while performing the occupation in a broad sense, and the accident was caused by the occupation.
 However, even if the worker is compensated by such a system, it does not cover all his/her damages: it does not cover pain and suffering damages, and neither absence from work nor after-effects are compensated in full.
 The worker, therefore, has the right to separately claim compensation for damage in accordance with the Civil Code to cover the shortfall, by proving the employer’s negligence, casual correlation between negligence and accident, and actual damage (coexistence of worker’s accident compensation and compensation for damages).

 By French law, as a general rule, workers qualified for worker’s accident compensation cannot claim compensation for damage in accordance with the Civil Code (Article L.451-1 of the French Social Security Act). This stipulation is intended to lighten the burden imposed on employers. Some people are partial to it as it promotes workers’ own efforts to prevent industrial accidents, while others disagree with it as it is unfair for workers.


Are employers allowed to dismiss their regular workers without any restrictions?

In accordance with the Civil Code, the contract of employment without term stipulates that employers have a right to dismiss their workers at their option without giving any reason, just by giving them prior notice of a specified period of time. This aims to prevent employers from being overly bound by their employment relationship, which is supposed to be a continued contractual relationship, in the same way as the workers’ liberty to resign is protected.
However, disemployment hits the workers’ life directly. Besides, we had the lifetime employment system in Japan.
Therefore, in order to protect workers and this system, judicial precedents established the following doctrine: in case the enforcement of right of dismissal lacks in objective and logical reasons based upon social convention, it is considered abuse of power and becomes null and void, thus heavily restricting disemployment. In 2003, this doctrine was put in the statutory form in the labor standards law. Consequently, we cannot actually say that employers can dismiss regular workers at will.
In determining the validity of respective dismissal cases, the following criteria are taken into consideration: whether other means to avoid such dismissal is available or not, whether an unjustly heavy penalty of dismissal is imposed on minor violations or not, whether the worker is dismissed for unjust reasons, and whether there are any extenuating circumstances on the worker’s side.

 French law, too, requires a ‘true and significant motive’ for dismissal (Article L.122-14-3 of the Labor Law). In the United States, on the other hand, liberty of dismissal is widely acknowledged as opposed to other countries, although certain limitations are being imposed on the implementation.


Are employers allowed to refuse the renewal of a fixed period contract of employment ("termination of employment") without any restrictions?

 According to the Civil Code, for fixed-term contract employees or part-timers, in principle, the contract terminates when their employment period expires.
 However, in case the contract has been renewed many times, it is quite natural for the worker to expect further renewal of the contract.
 In consequence, judicial precedents established the principle that the employers’ refusal to renew such contract ("termination of employment") should be stringently restricted, in case the fixed-term contract was so many times renewed that it has become virtually equal to an indefinite-term contract, or in case it is reasonable for the worker to expect continued employment.
 The decision is made after considering the following criteria: whether the work is of a temporary nature or not, how many times the contract was renewed, how long the employment period is in total, whether the employer said or did something that would encourage the worker’s expectations for continued employment.

 By French law, the conclusion of a fixed-term contract itself is rigidly estricted in order to keep the worker’s position stable. In fact, the conclusion is not authorized unless the work is evidently temporary, as in the case of a substitute for another worker on sick leave (Articles L.122-1 and L.122-1-1 of the Labor Law).


Is the wage gap between nonpermanent employees and permanent employees illegal?

 Wages are determined by agreement between workers and employers (principle of the freedom of contract). Therefore this should not result in a problem of illegality in its own right, even if there is a wage gap between non-permanent and permanent employers.
 But in reality, job seekers are forced to decide between only two options: to accept the gap and get hired, or to stay unemployed. This is why it matters whether adopting the wage gap between them in remunerating the same kind of services is illegal or not in itself.
 With regard to this, there is no provision in the law that clearly states the policy of equal pay for equal jobs. Theorists also divide into two groups: those who believe in legal support and those who do not.
 In the judicial precedent of a female temporary worker who pursued the same business as regular workers, almost full-time, but was paid wages lower than theirs, the court ruled it as illegal, on the grounds that her wages, lower than 80% of a female regular worker with the same service years, run counter to the principle of parity of treatment, which underlies the policy of equal pay for equal jobs, and are thus deemed as an offense against public order and morals (Article 90 of the Civil Code). Later, in another judicial precedent, the court ruled the similar case as not illegal. Thus things still vary according to the circumstances.

 By French law, part-time workers are guaranteed compensation proportional to their work hours, etc., on the basis of compensation of full-time workers in the equivalent duty position with the same rating in the same company (Clause 3, Article L.212-4-5 of the Labor Law), and the policy of equal pay for equal jobs is thus prescribed.


Who is to assume legal liability in case of sexual harassment?

 Cases of sexual harassment varies in the degree, from an offense against office ethics to the case subjected to criminal punishment.
 In case such harassment is significant beyond common sense, the offender is liable for damages in accordance with the Civil Code. Since the company has a duty to give consideration to provide the best workplace environment, it may also be held liable for damages for lack of supervisory responsibility or breach of duty.
 In case a supervisor with the power to handle personnel harasses his/her subordinate and unjustly dismisses the victim for refusing him/her, such dismissal becomes null and void.
 Furthermore, depending on the way it is committed, some harassment cases may be deemed as criminal offenses, such as indecent assault or extortion. In that case, the victim can lodge a criminal complaint against the harasser.
 Lastly, if sexual harassment causes depression, the victim may be qualified for worker’s compensation.

 Unlike Japanese law, French law has a punitive clause to directly deal with the harasser (Article 222-33 of the Penal Code). In case one harasses others by orders or threats for a sexual purpose by abusing his/her official authority, such person can be sentenced to one year’s detention and a fine of 15,000 euros.