Scottish Sea Fisheries Employment 2015

Remuneration Costs

This section presents results from analysis of data on crew remuneration costs from the vessels sampled in 2015. In the survey, the cost of crew remuneration includes all payments to individual crew for the services they provide to the vessel. This includes bonuses (if stated) and expenses (e.g. flights for repatriation of foreign crews) before subtracting taxes and other charges (e.g. agency fees). Commercial marine fisheries have three main types of remuneration arrangements:

• Crew Share: crews are paid a percentage of the value of fish landed by a vessel after deducting operating costs (e.g. fuel, quota leasing, boxes, and ice). Crews under this arrangement are considered self-employed;

• Vessel Contract: crews are paid a fixed monthly salary by the vessel operator, which is independent of the value of landings;

• Agency Contract: crews receive a salary from an employment agent who is contracted to supply the vessel with crew. Crews under this arrangement are not employed by the vessel operator but by the agency.

The majority of sampled crew (74.6%) were remunerated through a crew share arrangement. The remainder were remunerated through vessel contracts (8.6%), agency contracts (16.4%) and a combination of crew share and vessel contracts (0.4%). The majority of Scottish and rUK crews (95%) received their pay through crew share arrangements, and the remaining 5% through vessel contracts ( Figure 25). 63% of EEA crew were paid by crew share arrangements, 22% by vessel contracts, and 7% each by agency contract and mixed crew share/contract arrangements. The majority of non- EEA crews (82%) receive their pay from agents who have supplied them to work on Scottish vessels. The remaining 15% of non- EEA crews were paid via vessel contracts and 3% through crew share arrangements.

Figure 25: Types of remuneration agreements on vessels by nationality (n = 748)

The majority (90%) of crew employed on pot and trap vessels were paid via crew share arrangements, whilst the demersal under 24m vessels had the largest proportion (42%) of crews on agency and vessel contracts. Nephrops trawl and demersal over 24m, seine and pair trawl vessels had around 30% of their crew on agency and vessel contracts, while the scallop dredge sector had the lowest proportion of crew (13%) on agency and vessel contracts ( Figure 26).

Figure 26: Remuneration arrangements by sector (n = 748)

Table 6 presents financial and remuneration structures of all key sectors from 80% (n = 595) of the vessels sampled in 2015. The Nephrops trawl and pot and trap sectors, have each been disaggregated into two classes based on vessel length to account for variation in earning capacity within these sectors. Table 6 presents the mean vessels' monthly gross earnings by sector and how they are distributed (% and £) across (a) fishing variable costs (fuel, quota leasing, boxes and ice, food, harbour dues, bait etc.); (b) boat share (fixed vessel costs such as insurance, administration fees, vessel loans etc.) and; (c) crew remuneration. Figures presented are mean (averages) costs for a typical vessel in each sector. Annex 1 presents a diagrammatic illustration of how gross earning are typically distributed on vessels.

The mean monthly gross earnings across all sampled vessels was £31,231 (Table 6). Mean monthly gross earnings by sector ranged from £5,746 for an under 10m pot and trap vessel to £116,526 for a large demersal over 24m, seine and pair trawl vessel. On average, 32% (£9,994) of gross earnings for all sampled vessels was taken up by fishing variable costs. Mean fishing variable costs by sector ranged from 21% (£4,305) of monthly gross earning for an over 10m pot and trap vessel, to 44% (£21,266 and £51,271) of monthly gross earnings for a Nephrops over 18m and a demersal over 24m, seine and pair trawl vessel respectively.

Boat share accounts for 35% (£10,931) of monthly gross earnings across all sampled vessels. Mean boat share ranges from 28% (£13,533) of monthly gross earnings for a Nephrops over 18m vessel to 43% (£8,732) for an over 10m pot and trap vessel. Crew on all sampled vessels receive, on average, 33% (£10,306) of gross monthly earnings in remunerations. Mean crew remuneration allocations varied from 25% (£29,132) of gross monthly earnings for a demersal over 24m, seine and pair trawl to 38% (£2,160) for an under 10m pot and trap vessel.

The crew remuneration share of vessel's gross earnings goes to paying vessel contract and agency contract crew, and what is left is shared amongst the self-employed crew based on agreed crew share arrangements (Table 6). On average, sampled vessels allocate 88% of monthly crew remuneration to fishers on crew share arrangements and 12% to crew on vessel and agency contract arrangements. This equates to a mean of £3,002 per month per crew share fisher and a mean of £1,308 per month per contract fisher ( Table 6).

Crew share pay accounts for the larger proportion of crew remuneration - on average 92% which equated to £1,359 per crew per month for an under 10m pot and trap vessel and £2,360 per month per crew for an under 18m Nephrops vessel. A Nephrops over 18m vessel had the smallest crew share allocation (67%) which equated to £4,410 per crew per month. The variations in the share of remuneration going to fishers on crew share is largely due to staff numbers, but also, on average, because of the lower pay allocated to crew on vessel and agency contracts.

Pot and trap vessels had the smallest difference in mean pay between those on crew share and those on vessel and agency contracts. On average, individuals paid via crew share on a under 10m pot and trap vessel received £1,359 per month, compared to £1,122 for those in that sector on contracts ( Table 6). The demersal under 24 metre sector had the largest difference in mean pay between individuals on crew share (£7,535) compared to those on contracts (£1,171).

Table 6: Mean percentage allocated per variable and estimate (Est.) value (£) based on mean monthly gross earnings of vessels in each sector. Distribution of gross earnings (n=177), distribution of crew remuneration (n = 595).

Table 7 presents the distribution of crew remuneration by sector and position. On average, skippers accounted for 56% of vessels total spend on remuneration, engineers 30% and deckhands 35%. As anticipated skippers are rewarded the highest share, then followed by deckhands and then engineers ^[7] . However in terms of pay per crew engineers earn more than deckhands. (see Table 7).

Table 7 shows that crew earnings are highly variable across; (a) sectors; (b) position of crew on the vessel and; (c) remuneration arrangements. The demersal over 24m, seine and pair trawl vessels pay on average the highest for skippers and engineers on crew share at an estimated £7,667 per month, whilst an under 10m pot and trap vessel pays the least for skippers at £1,447 per month. Both the large and small demersal sectors pay, on average, the highest for deckhands on crew share at around £5,300 per month, while the under 10m pot and trap vessels pay the least (£887 per month). Across all sectors with contract crew, deckhands are on average paid the least at around £1,200 per month, with relatively small variations (between £1,100 to £1,475) in average pay across sectors. In the case of crew share, this is payment for labour before tax, social security payments and other deductibles. In the case of contracts, what is reported is the total cost to the vessels for acquiring the services of crews. In the majority of cases this includes other contract expenses (e.g. reparation costs and costs to the vessel for food and accommodation) as well as payment that crews may have to pay (e.g. agency contract fees).

Table 7: Monthly crew share, estimated (Est.) crew share costs and contract salary by position. Median values are presented (n = 595). Estimates are calculated using the mean gross earning for an average vessel in each sector whilst the max/min value in the range can be found in Annex 1B.