Strike clause

Strike clause. A “strike” is a general, unified (“concerted”) refusal by workmen to work because of some alleged grievance, for example, a claim for higher wages or better conditions.

This seems to be a simple definition when it comes to decide whether the owner or the Charterer bears the risk of loss of time because of a “strike”. However, the word has also been held by courts to include situations where workmen, who do not have a specific grievance, refuse to work because they wish to support other workmen who do have a definite grievance (the “sympathetic strike” or the “general strike”). The meaning of the word becomes important in relation to chartering when a dispute arises between the shipowner and the Charterer because of the delay that is caused by workers’ refusal to work. Charterparties, especially for voyage charters, normally have a clause excluding liability for time lost through “strikes”. If time is lost an arbitrator or judge may have to decide whether the circumstances of the delay come within the meaning of the word.

For example, a charterparty may state that laytime does not count during “time lost through strikes”. If a strike is called by one group of workers (for instance, stevedores) in support of another group (for instance, miners), the laytime may be considered not to count against the Charterer because the strike was a “sympathetic” one. This result may occur even if the former group have no grievances against their own employers, or against the shipowners, charterers or receivers of the cargo.

Another meaning of the word “strike” covers the “go slow” or “work to rule” tactic by workers where workers refuse to work longer hours than are customary because they have some unsatisfied claim against their employers. For example, if crane drivers refuse to work on night shifts, their refusal can be considered to be a “strike” and time lost may not be counted as laytime. This can be termed a “partial strike”.

While the word has been defined variously by courts to cover loss of time because of refusal to work owing to a labour dispute, it does not include dismissals of workers in order to reduce expenses, nor when workers cave their jobs because of fear of disease. Also, it will not include a stoppage of work, which occurs because of some external event, such as a bomb scare or some suspicion of danger.

If the clause in the charterparty excludes liability for “any consequences of a strike”, this can cover time lost by congestion in a port caused by a strike and -continuing after the strike has been called off. The “General Strike Clause” in the GENCON voyage charterparty specifies that “Neither the Charterers nor Owners shall be responsible for the consequences of any strikes or lock-outs preventing or delaying the fulfilment of any obligations under . . .” the charter.

The GENCON General strike clause has wide implications of “strike”, and is generally protective for the shipowner.

Before the vessel arrives at the loading port, the owners and/or the master can ask the Charterers to declare whether time lost by strikes at the port will not be excepted from laytime allowed. If the Charterer does not so declare within 24 hours, the owners have the option of cancelling the voyage charter. (See “Frustration”.) If the ship is partly loaded already, the owner must continue with the voyage for freight on the cargo already loaded but has the option to complete with other cargo. If discharge of the cargo is likely to be delayed by a strike, which has not been settled within 48 hours, the receivers have the option of keeping the vessel waiting on payment of half the demurrage rate. Alternatively, the receivers can order the ship to another port within 48 hours after the owner and/or the master have advised the receivers of the strike conditions at the original port. If the distance to the substitute port is more than 100 miles greater than the distance to the original port the owners are entitled to a proportional increase in freight.

Different charterparties contain different strike clauses and their effect differs on time lost. Owners and their shipbrokers should be aware of the risk of losing time (and money) by agreeing to the charterer’s insistence on certain strike clauses, such as the CENTROCON Strike clause.

All parties should compare these strike clauses in different charterparties for advantages and disadvantages before fixing the vessel. For example, GENCON refers to “strikes and lockouts” only, whereas other protects the Charterer from liability for time lost by many events. In AMWELSH the cause of delay is qualified by “whatsoever”. This word has a very wide meaning and can offer openended benefits to the charterer.

Strike clauses are also found in time charters. For example in the BALTIME charterparty it is specified that “. . . Owners not to be liable for loss or damage arising or resulting from strikes . . . of labour (including the Master, Officers and Crew) whether partial or general . . .”. “Loss” can also include financial loss to the charterer. Therefore it would seem, that, unless some other “off hire event” occurs, the charterer remains responsible to pay hire. In. the. New York Produce Exchange form “Off hire” clause, the ship can become off hire because of “deficiency of men” but refusal by men on board the ship, if there is a sufficient number, is a “strike” and the strike provisions prevail over the off hire provisions.

However, under American law the position seems to be dependent on the actual words in the charterparty. In the U.S. case of The Marilena, 1969, the Off hire clause contained the off hire circumstances as including β€œ. . . deficiency of men including but not limited to strikes . . .”. The crew went on strike. This was held to be a “deficiency” and the ship became off hire. A Strike clause is a “general protective clause”.


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Straight bill of lading

Strikes and Lockouts