Compliance with French Social Security as It Affects French Resident Seafarers

THE ISSUE

Applicable to both commercial and private vessels, the intent of the French government is reportedly to align seafarers with other French residents in regard to social security protection. By ratifying MLC, France committed itself to providing its resident seafarers on commercial vessels with access to all nine branches of social security, yet the reality is that ENIM is only set up to deal with employers rather than individual seafarers and, as ENIM have stated to us, only an exceedingly small number of foreign employers have sought to arrange contributions in respect of their French resident crew, leaving many others with no way of either paying into or enjoying the benefits of the social system scheme to which they are entitled. The most publicised case which triggered the legislation was that of the French crew employed on the Condor Ferries services out of St. Malo. France has attempted to address that flaw in the system by requiring foreign employers to pay into ENIM in respect of their French resident crew (with certain exceptions). An employer who fails to fulfil that obligation risks serious sanctions and it is doubtful that the French authorities will be understanding of employers simply claiming ignorance as to the residency of their crew.

THE IMPACT

This legislation has, however, had serious economic consequences for France with the French shipyards as well as many other businesses which depend on the yachting sector suffering catastrophic losses of business (compounded by separate issues relating to VAT on fuel). There is also widespread talk of French resident seafarers being avoided by yacht employers. In a first attempt to stem the bleeding, an amendment was implemented in January 2018 which allowed employers to use a private scheme rather than contribute to ENIM but only if the private scheme provides “equivalent protection” to that provided by the French social security code. This is, however, of limited help because the French authorities, including ENIM, are resisting any requests for them to deem a particular private scheme to be compliant and indeed all indications are that this will not change in the future. As such, any claims from crew insurance providers that a particular plan is “compliant” in this context should be treated with a healthy dose of scepticism and caution! Private international schemes serve an important purpose but they do have limitations too, some of which risk leading to dissatisfaction in the long-run amongst seafarers relying on them as a stand-alone solution rather than in combination with a home country social system.

PRACTICAL APPLICATION

Much of the concern surrounding this issue has focused on the fear of port state control inspections. With limited resources, it seems highly unlikely to us that port state control inspections will in fact present the greatest risk of unwanted attention by the authorities in this regard. If an inspector finds a properly maintained Maritime Labour Certificate and DMLC, it is questionable whether they will be digging any further than that unless there has been a complaint from a seafarer and that, in fact, is where we see a far greater risk. So, while it is worth considering carrying a Maritime Labour Certificate and DMLC even if not required to do so (e.g. the vessel is under 500gt), even more importantly it would be advisable for employers to ask their seafarers to state their country ties and document those answers. This could be as brief as asking the seafarer to state their country of residence but could also encompass other ties such as the repatriation destination and the country of the bank account to which the salary is being paid. The seafarer should be required to notify the employer in the event of changes to this information. Where the answers indicate that the seafarer may be a French resident, advice can be sought and contributions to ENIM can be arranged if appropriate. Where the answers do not indicate French residency, the employer now has back-up documentation showing good faith in the event of the seafarer later seeking to claim that the employer has failed to arrange the necessary contributions to ENIM. We understand that some employers are already requiring their seafarers to answer such questions.

WHAT’S NEXT

The French social system rules themselves do talk of the concepts of “stable” and “regular” residence in France, “stable” meaning that it is continuous for three months or more (to be documented by, for example, confirmation of rent payments, electricity bills, phone bills etc.) while “regular” is a requirement for non-EU citizens and means that the individual must have an appropriate “titre de séjour”. British crew working on a foreign (non-EU) flagged vessel but living in shore-based accommodation in France are the sort of situation that does need to be more fully understood on an individual basis in order to minimise the risk of problems and again a questionnaire about country ties can help with this.

CONTACT

Looking forward, further developments are expected to try to curb the unintended consequences to the French economy and seafarers. Meanwhile, any other countries trying to figure out how to fulfil their social security obligations under MLC will no doubt be watching carefully in an effort to avoid similar challenges.

For more information, please contact Peter Dudzinski at peterd@mhginsurance.eu or Mark Bononi at markb@mhginsurance.com.