This report analyzes the legal status of ship personnel, the fate of employment contracts, notification obligations, and the rights of personnel in the event of a change in ship ownership or the sale of the ship, within the framework of the provided literature. The report particularly outlines the consequences of ship transfer under the 854 Maritime Labor Law (DİK) and distinguishes this situation from other legal transactions such as ship chartering.

Main Findings

According to the literature analysis, the status of ship personnel in case of a transfer of ship ownership primarily depends on whether the ship retains its right to fly the Turkish Flag.

Continuity of Contract is Essential: As long as the ship retains its right to fly the Turkish Flag, the transfer of ownership (sale) does not automatically terminate employment contracts. The new owner becomes a party to the existing employment contracts.

Turkish Flag Condition: If, as a result of the transfer, the ship loses its right to fly the Turkish Flag, this situation leads to the termination of employment contracts.

Rights of Personnel:

Severance Pay: In case of contract continuity, the seniority rights of the personnel are protected and their periods of service are combined. In the event of a transfer, both employers (transferor and transferee) are jointly and severally liable for accrued severance pay.

Right to Repatriation: In cases where the employer cannot fulfill its legal or contractual obligations due to reasons such as the sale of the ship, bankruptcy, or change of registry, the ship’s personnel acquire the right to repatriation.

Notification Obligation: According to the Maritime Labor Law, if the employment contract is terminated by the employer or their representative, the reasons for termination must be notified to the seafarer in writing.

Working Conditions: The mere transfer of a workplace is not considered a substantial change in working conditions. The new employer cannot unilaterally change working conditions to the detriment of personnel due to the transfer.

Detailed Examination

1. Fate of the Employment Contract and the Turkish Flag Condition

The basic regulation regarding whether employment contracts will continue in the event of a ship’s sale is Article 19 of the Maritime Labor Law No. 854. This article directly regulates the effect of the transfer on contracts.

According to Article 19 of the Maritime Labor Law No. 854, titled “circumstances not constituting termination”; ‘The transfer of ownership of the ship, whether partially or entirely, to any person, as long as it has the right to fly the Turkish Flag, does not entail the termination of the employment contract’. This provision automatically makes the new owner of the ship a party to the existing employment contracts. Here, no function is attributed to the will of the parties regarding the transfer of the contractual relationship as a whole, and the same principle applies to seafarers.

The most important exception and complementary element of this rule is the ship’s flag status. If the ship loses its Turkish Flag due to the transfer process, the employment contracts terminate.

In its recent decision on the matter, the Supreme Court emphasized that “it should be investigated whether the plaintiff continued to work after the transfer, whether the ships were sold to foreigners, and whether they carried the Turkish Flag, and a decision should be made based on the outcome.” … In this case, if the ship loses its right to fly the Turkish Flag upon transfer, the employment contract will terminate. Furthermore, in such cases, service periods for work performed after the transfer cannot be combined.” Accordingly, if the ship loses its right to carry the Turkish Flag as a result of the ship’s transfer, the employment contract will terminate, and services cannot be combined.

2. Rights of Personnel and Obligations of the Employer

a. Severance Pay: In cases where service contracts continue, severance pay, one of the most important rights of personnel, is protected. Article 20 of the Maritime Labor Law specifically regulates responsibility for severance pay in case of transfer. In the event of the transfer or assignment of a ship, or its passage from one employer to another by any means, or its relocation, the seafarer’s seniority is calculated based on the total duration of service contracts at the workplace or workplaces. As of 12.07.1975, in the event of a ship’s transfer or change of ownership by any means, both employers are responsible for accrued severance pay. However, the responsibility of employers transferring the workplace is limited to the periods they employed the seafarer and the wage level received by the seafarer at the time of transfer.

b. Repatriation Right: The sale of the ship may result in the employer being unable to fulfill their financial or legal obligations. In such cases, the right of the ship’s personnel to repatriation comes into question. Directive B2.5.1 f.1/b states that in cases where the shipowner, as the seafarer’s employer, cannot fulfill their legal or contractual obligations due to bankruptcy, the sale of the ship, a change in the ship’s registration, or other similar reasons, the seafarer’s repatriation will also be an issue.

“…in cases where the employer is unable to fulfill their legal or contractual obligations due to bankruptcy, the sale of the ship, a change in registration, or similar reasons, the ship’s employee … acquires the right to repatriation.”

c. Obligation of Termination Notice: If the employment contract is terminated by the employer for any reason, especially in a situation such as the ship changing its flag, the Maritime Labour Law imposes a written notice requirement.

The regulation in the maritime labour law… is stipulated only for employers or their representatives… whether the employment contract is terminated for just cause or for other reasons, the employer’s written notification to the employee of the reason for this termination appears as a legal obligation. In light of this regulation in the Maritime Labour Law, if the employment contract is terminated by the employer, the seafarer must be given a written notice regarding the termination of the employment contract and the reason for termination.

3. Change in Working Conditions

Literature is in agreement that the transfer of a workplace alone is not considered a substantial change in working conditions. Supreme Court jurisprudence also supports this view. In doctrine, there is also a consensus that the mere fact of transfer is not considered a substantial change in working conditions, and the Supreme Court’s jurisprudence on the matter is in the same direction. Indeed, in a decision by the General Assembly of Civil Chambers, “…The transfer or assignment of the workplace, or its passing from one employer to another in any manner, does not, as a rule, constitute a substantial change or alteration of the working conditions as per the paragraph of Article 16, Section II of the Labor Law No. 1475….since there is no will of the employees involved in the transfer process, and they do not have the possibility to terminate their contracts solely due to termination, the existing working conditions should not be changed to the detriment of the employee due to a change in the workplace.

4. Situations Different from Ship Sale: Chartering

The sale of a ship and the chartering of a ship (charter agreements) lead to legally different outcomes. In chartering, there is no transfer of ownership. In cases where seamen are placed under the command of the charterer, the question of who holds the employer status is a subject of debate in doctrine.

“For the charterer to be responsible for the debts and obligations arising from the employment of seamen, they must either take over the seamen’s service contracts under Article 429 of the Turkish Code of Obligations (TBK) or join the contract within the framework of Article 206 of the TBK… According to another view in doctrine, first, the service contracts between the seamen and the lessor should be terminated, and subsequently, new service contracts should be drawn up between these seamen and the charterer.”

This distinction shows how important it is to correctly determine the legal nature of a ship transfer for personnel rights.

Conclusion

According to the literature sources provided, the future of ship personnel’s employment contracts when a ship is sold primarily depends on whether the ship continues to fly the Turkish Flag.

If the Flag is Preserved: Employment contracts, along with all rights and obligations, transfer to the new owner (acquirer). Personnel’s seniority rights are protected, and both employers are jointly and severally liable. The transfer alone is not considered a substantial change in working conditions.

If the Flag is Lost: Employment contracts terminate. In this case, the employer’s obligation arises to notify the personnel of the termination in writing and to ensure the personnel’s rights, such as repatriation.

The sale of a ship differs from transactions such as ship chartering or management transfer in terms of its legal consequences, and the effects of each situation on personnel should be evaluated according to its specific legal regime.

Frequently Asked Questions (FAQ)

The ship was sold, am I considered dismissed? If the ship retains the Turkish Flag, no; your contract continues as is with the new owner. If the flag is lost, the contract terminates, and provisions for termination/repatriation come into effect.

Is the old or new shipowner responsible for my severance pay? In transfers after 12.07.1975, both employers are jointly and severally liable; the old employer’s liability is limited to their period of employment and the wage level at that time.

Is my length of service reset on the new ship? If the flag is preserved, no, the periods are combined. If the contract terminated due to the loss of the flag, employment after the transfer cannot be combined.

The ship was sold to a foreigner, who pays for my repatriation costs? As a rule, the employer; otherwise, you can claim compensation for travel/provision costs and 15 days’ wages.

Is being told verbally “the job is over” a valid termination? In employer-initiated termination, written notification of the reason is mandatory; verbal termination does not meet this condition and results in consequences against the employer.

Why is Expert Legal Support Necessary?

While personnel law in ship sales might seem like a simple “termination” issue at first glance, behind it lies a multi-layered structure intertwined with flag/registry status, the nature of the transfer agreement, seniority calculation, joint and several liability, and international maritime standards (MLC 2006). A single error in determination — for example, incorrectly characterizing the transaction as a “sale or charter” — can completely alter a seafarer’s seniority or the risk undertaken by the shipowner. Expert legal support in this field is crucial in the following areas:

Flag and registry analysis: Correct determination of whether the transfer removes the vessel from the Turkish registry, and consequently, whether contracts continue or terminate.

Correct classification of the transaction: Distinguishing between sale, charter (bareboat/time/voyage), or transfer of management, and applying the different legal regimes each has on personnel.

Seniority and claim calculation: Combining periods of service, accurately determining the limit of joint and several liability (duration and wage level), and observing the seniority compensation ceiling.

Risk management for the shipowner: Protection of the acquiring shipowner by incorporating guarantee, declaration, and set-off/security clauses related to personnel claims into the ship sale and purchase agreement.

Claim enforcement by the seafarer: Timely assertion of written termination notice, repatriation costs, 15-day compensation, and seniority claimsi.

International dimension: Foreign flag, foreign national seafarer, and management of obligations under MLC 2006.

Maritime labor law disputes often arise in an environment where the vessel is in motion, evidence is scattered, and deadlines are short. The correct legal step taken at the beginning of the process both protects the seafarer’s rights and saves the shipowner from unforeseen liabilities.

2M Law Office

2M Law Office (Att. Meryem Günay) provides services, based in Tuzla, in disputes related to maritime labor law, maritime commercial law, seafarer claims, ship sale-purchase, and charter agreements. Located in one of Turkey’s leading shipyard and port regions, our office offers specialized legal support to both shipowners/employers and seafarers.

Service areas: Tuzla, Pendik, Kartal, Maltepe, Gebze, and the Anatolian Side of Istanbul, along with the Kocaeli port region.

You can contact our office regarding your employment contract, severance pay, or repatriation processes due to ship sale or transfer.

This article is for general informational purposes only and does not constitute legal advice. For the specific conditions of each concrete case, an attorney should be consulted. The legislative and jurisprudential information contained in the article has been prepared based on the regulations at the time of publication.