Private security company workers demand wage increase

In March 2007, workers at the private security company Falck Apsargs went on strike in order to drive forward their demand for better working conditions and higher salaries. However, the company management considers that these demands are unjustified and argues that the company is unable to satisfy the demand for a double salary increase. Therefore, the State Labour Inspectorate will take on the role of conciliator in this industrial action.

The security company Falck Apsargs is a subsidiary of the worldwide Group 4 Securicor (G4S) and one of the leading companies in the Latvian security industry. G4S was established on 20 July 2004, following the merger of Group 4 Falck and Securicor. Established in Denmark in 1906, Falck is the oldest G4S company. In the Baltic states, G4S operates under the name Falck Baltics and includes three companies: Falck Eesti in Estonia, Falck Security in Lithuania and Falck Apsargs in Latvia.

Staff shortages

The security business in Latvia is regarded as a profitable economic activity, but this perception is only based on impressions, since no precise statistical information is available about this type of economic activity.

In 2005, Falck Apsargs announced a price increase of its services. One of the reasons for this increase was to fund a salary increase for the company’s staff. The wage increase was necessary due to the fact that Latvian citizens started increasingly to search for work abroad, causing a shortage of labour in the Latvian labour market. In a statement to the press in 2005, the Chair of the Board of Falck Apsargs at the time, Valdis Purvinskis, announced that there was a shortage of 100 employees out of 430 staff places available in the capital city, Riga.

Strike action

Despite the fact that salaries were increased before, the staff of Falck Apsargs organised a strike in Riga on 19 March 2007. Strikers demanded a double pay rise. The trade union representing the company’s staff filed a complaint with the Cabinet of Ministers and the State Labour Inspectorate (Valsts Darba Inspekcija, VDI) concerning the attitude of the company’s management towards their staff and the low salaries paid to workers.

The employee representative, Ivars Kanbergs, stated that the company’s management tried to prevent staff from going on strike by threatening to dismiss them. He also highlighted that security guards employed by the company can work up to 400 hours a month, but are not compensated for overtime as provided for by law. Furthermore, the company’s management indicated that it does not wish to sign a collective agreement with the trade union.

Views of company management

In turn, the Falck Apsargs management believes that the security guards’ demands are unjustified. The remuneration for security staff corresponds to the national average monthly wage of €430, while salaries are being gradually increased. However, the company is unable to satisfy the trade union’s demand for a 100% salary increase. The current Chair of the Board, Edgars Zālītis, made the point that the company has always looked after its staff. Compared with its competitors in the field, Falck Apsargs is one of the few companies in the security business which honestly pays taxes and provides social security guarantees for its employees. This, in turn, affects the level of wages paid out directly to staff. He insists that staff get paid accordingly for working overtime.

A trade union representing cash collectors is present in the company, and the company management is ready to cooperate with the newly-established trade union. It should be noted that in Latvia a trade union can be established within a company if there are at least three potential members among the workforce. This trade union may then join any larger trade union or a trade union confederation.

VDI assumes mediation role

The management of Falck Apsargs emphasised that it is ready to continue negotiations with its staff, to ensure that provisions which are binding for both parties are included in the collective agreement. Meanwhile, VDI, whose priorities include strengthening social dialogue, has assumed the role of mediator as defined by law.

Commentary

The strike by staff of Falck Apsargs draws attention to the fact the security industry is one of the sectors of the national economy which is particularly affected by illegal employment. The shadow economy is widespread in the Latvian security business, which distorts competition. It is difficult therefore for a tax-paying company, as Falck Apsargs considers itself to be, to maintain existing market prices and salary levels. This causes dissatisfaction among the company’s staff members. Mr Zālītis has told the press that ‘the existing situation highlights the consequences of the lasting inability of the state to eliminate undeclared wages.’

It must be admitted, however, that the strike at Falck Apsargs was not entirely successful as only three persons participated out of an expected number of 84 workers. It seems that, during the last meeting before the strike was due to take place, the trade union members rejected the strike action. Nonetheless, the trade union leader decided to continue organising the strike.

Raita Karnite, Institute of Economics, Latvian Academy of Sciences

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