Dutch court rules that seafarers on a Dutch ship have the right to the minimum wage

The case concerned Filipino seafarers working on board of seven harbour tugboats. The ships were registered in the Netherlands, they were sailing under the Dutch flag and had a Dutch owner. The ships were supplied in the Netherlands and maintenance took place regularly in the Netherlands as well. Six of the seven captains lived in the Netherlands. Also, the Filipino seafarers went on board of the ships in the Netherlands. Therefore, the ships had their home base in the Netherlands.  According to article 4 para. 4 of the Dutch Act on Minimum Wages, ships having their home base in the Netherlands are to be considered as Dutch territory for the applicability of the Dutch minimum wage. Two of the seven ships, however, sailed mainly outside the Netherlands. In April 2018, the Dutch court ruled that with regard to these two ships, the Dutch Act on Minimum Wages did not apply because the seafarers did not have to spend any money in the Netherlands during their interim leave periods. Therefore, their income was not subject to the Dutch prices and Dutch level of prosperity. However, the State Council now ruled that the only criterion for applying the Dutch minimum wage on seafarers is whether the ships have their home base in the Netherlands and not whether the seafarers have to spend any of their income in the Netherlands. So also with regard to the seafarers working on the two ships which almost never sailed in the Netherlands, the Dutch Act on Minimum Wages applies, according to the State Council.

This ruling of the State Council can lead to the situation that ship owners decide to re-flag their ships and avoid Dutch harbours as much as possible. The Dutch Minister of Social Affair issued a letter to the Dutch Parliament on 5 March 2019 in which he wrote that he will consider changing a number of Dutch employment laws in order to clarify whether these laws apply on ships or not. Recently, the Dutch Labour Inspectorate (Inspectorate SZW) imposed a fine of almost 1 million euros on the biggest cruise ship in the world (Royal Caribbean Cruises) for not having the necessary work permits.