Decree puts further pressure on employers in France

On 11 March 2017, in the Official Journal of the French Republic, the French government published Decree no2017-307 of 9 March 2017, which cemented the government’s view on the social security affiliation of seafarers residing in France and working on non-French flagged vessels. This decree provides that, for the purposes of retirement benefits, all crew members employed on foreign flagged vessels, must be registered with French social security schemes if they reside in France unless they are registered with another EU member state, or in another state that has a bilateral social security treaty with France.

“This decree applies to all crew members that have stable and regular residence in France,” starts Jean-Philippe Maslin, associate at Ince & Co. “However, ‘stable and regular residence’ is not a defined term in French law and, rather, it is determined by the precedents set in case law.”

French case law states that your residence is the country that you have closest ties to, whether that be professional, property, family or a combination of various links to France. For instance, a number of superyacht crewmembers will have put France as their place of residence on their seafarer’s employment agreement and stating France as their place of repatriation.

“It is important to note that, with this new legislation, registration can be made voluntarily by the seafarer or, if this has not been made, directly by the French seafarers social security body (ENIM),” continues Maslin. “Employers which are not established in France are required to put up a bank guarantee or, if this is not done, a deposit to cover their social security contributions. The contribution amounts due are identical to those paid by and on behalf of French seafarers, and carry a 0.5 per cent per day interest rate on late payment.”

Until this most recent decree, as explained in Crewmembers seeking termination suits in France, for a crewmember to claim against hidden employment on the part of the employer, they would need to prove intent on the part of the employer to not register the crewmember with ENIM. It remains to be seen the impact this new decree, which makes social security registration for crew in residence in France mandatory, will have on whether Courts consider the absence of this registration as proof of the intent of the employer to hide the employment.

“The issue is that this legislation did not take the superyacht community into consideration,” Maslin says. “It was drafted to address issues with ferries in north west France without realising that it would impact the entire yachting industry as a side effect.”

The decree is now in force. However, employers have a grace period until 1 July 2017 to bring their operations into conformity with its provisions.

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