Legal knowledge is not a must for conducting himself judiciously by a leader

A shipping company was looking to arrest revenue losses through, inter alia, controlling Overtime payments onboard ships. The labour union agreements between shipowners association and the sea crew Unions stipulated a "guaranteed" overtime of 109hours to each crew, and additional payments for every hour of overtime performed above the guaranteed hours at a rate mutually agreed.
     At the same time, the international labour related administration had desired and accepted the general social-economic necessity to reduce overtime payments and instead, to employ additional persons where such overtime payments were observed to be a regular feature. Yet, it validated the Natural Justice that wherever the overtime works shall have been performed, the payments will have to be necessarily made and in accordance with the agreement terms mentioned in the above paragraph.
      The shipping company sent out a circular onboard its fleet of ships that the shipboard management staff shall strive to reduce overtime payments loss to the company by having the jobs performed within 'guaranteed overtime' work schedule. In the circular, as a relaxation measure, the shipowner expressed their intentions that overtime payments upto 115 hours were admissible to them as optimal. (The circular in its details contained certain notes, the interpretation of which by the shipboard management staff is contentious and forms the core of this particular question.)
      It happened in a particular port-call of a fleet vessel that it saw a cargo operation of long number of days in one month. The mate prepared the overtime sheet at the end of the month which saw that the crew, as a matter of fact, did a 6-on-6-off watchkeeping, such that the accumulated overtime at the end of the month exceeded even the company stipulated relaxed figure of 115 hours.
      The master of the vessel asked the mate to correct this overtime sheet to bring it accordance with the company circular recently received, related with overtime reduction.

1) In what way can the mate bring correction in the overtime sheet he has prepared ?

Upon Mate's failure to follow the his instructions, the Master himself sent out the corrected OT Sheets for company's approval showing 115 hours of OT payment to each of the working crew. Later, the crew mustered before the master's cabin demanding their "rights". The master told them that he gave them OT as per company's instructions. He showed them the above circular, stating that his action was as per the company's instructions.
      Master proceeded to report the mate's failure to follow his orders to the office via telephone.

2) Comment on the above episode in light of the relevant labour laws, and the role of ship Master .
3) Is legality same as Judicious conduct by a leader ? Can a leader seek defence in his lack of Legal knowledge for failing to show right and judicious conduct ?

Questions on cultural dimensions of conduct ( you may skip this answering this portion, if it troubles you emotionally):
4)  What is you opinion, how the company should react to the overtime payments affair ? Master's report on mate ?
5) What will be the answer to the above question (4) with respect to various nationalities of crew you come across? What if the nationalities of Master and office staff is Indian ?