Dispute highlights threat to Finnish seafarers' jobs

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In May 2000, the Finnish Seafarers' Union held a boycott and sympathy strike in a dispute over the application of a Finnish collective agreement to an Italian-registered ship with a mainly Estonian crew. The conflict provided an outlet for underlying worries about the future of Finnish seafarers' jobs. Under an amendment made to the Maritime Act in early 2000, the "outflagging" of Finnish ships to the register of another EU or EFTA country will be possible without ownership being transferred from Finland. According to the Finnish Shipowners' Association, such outflagging can be prevented only by increasing state subsidies and cutting taxation.

Finnish maritime traffic was hit by unrest in May 2000, when the Seafarers' Union (Suomen Merimies-Unioni, SM-U) launched a boycott and sympathy strike in a dispute over the collective agreement to be applied on a ship, the SuperSeaCatFour, sailing on the Helsinki-Tallinn route, with a mainly Estonia n crew. The aim of the strike was to ensure that a Finnish collective agreement covered the whole crew. The ship is owned by the Italian company Sea Containers Italia, which in turn is owned by Sea Containers Ltd, registered in Bermuda and having its headquarters in London. The ship is registered on the Italian international register and flies the Italian flag.

SM-U boycotted the ship and started a sympathy strike on 8 May. Two-thirds of the personnel of Silja Line (whose main owner is Sea Containers) - which runs a regular service on the economically important ferry routes between Finland and Sweden and Finland and Estonia - participated in this sympathy strike, walking off their jobs on 8 May. All the union's members were asked to refrain from working on the ships to which the strike applied. However, a number of members disregarded the admonition, and so the ships were not kept in the harbour as was SM-U's original goal. Subsequently, the Finnish Transport Workers' Union (Auto- ja Kuljetusalan Työntekijäliitto, AKT) also joined in the sympathy strike by stopping the loading and unloading of Silja Line vessels.

Reasons for dispute and settlement

The reason for the dispute was the application of an Italian collective agreement to the crew of the SuperSeaCatFour. According to the SM-U union, this agreement offered the employees USD 1,041 per month, including compensation for overtime, holiday work and annual leave. The union claimed that: foreign crew members on the boat had to pay their own social security contributions - which for Estonians, for example, amounts to 33% of their salary; monthly income after taxes was about USD 450 - USD 500; the daily working time of the catering personnel was about 16-17 hours; and working shifts were three days' long, followed by a period of three days off. The union stated that these terms of employment were by no means "either acceptable or human", and alleged that Silja Line was seeking to open the door for the use of cheap labour on its ferries.

After a few days of dispute, SM-U and Sea Containers were able to conclude a collective agreement, which ended the strike. According to the union, this agreement increased wages to about USD 800 per month after taxes. High-speed craft and cabin-crew jobs of this kind have not been previously been covered by Finnish collective agreements, and therefore a comparison with Finnish wage levels is difficult. However, SM-U has stated that the agreement is satisfactory from the Finnish wage earners' point of view.

The representative of Sea Containers was also satisfied with the agreement, being quoted in the SM-U bulletin as stating that the deal "makes it possible on the Helsinki-Tallinn route to compete strongly with the cheaper flags that are threatening Silja Line".

Background to the dispute

Behind the SuperSeaCatFour dispute lies a trade union fear that Finnish seafarers' jobs will disappear because it has been possible from the beginning of 2000, following a reform of Finland's Maritime Act, to transfer Finnish ships to another European Union (EU) or European Free Trade Area (EFTA) country's flag without the ownership being transferred from Finland. According to the Finnish Shipowners' Association (Suomen Varustamoyhdistys, SVY), such "outflagging" can be prevented only by increasing state subsidies and by bringing tonnage taxation to the same level as in other EU countries.

During the sectoral collective bargaining round in spring 2000, SM-U sought an agreement that would have prevented the outflagging of Finnish ships (FI0002135N). In March, SM-U and SVY did indeed conclude a framework agreement providing for the competitiveness of Finnish ships to be guaranteed through collective agreements. Linked with this agreement is a call by the social partners for state subsidies for the maritime sector. If the sector is not subsidised in Finland as much as in other EU countries, many shipowners have promised to transfer their ships to the register of some other EU country. In some shipping companies, ships have already been outflagged and concrete negotiations over dismissals are in progress. Until now, the state has taken a negative attitude concerning subsidies, but preparations for granting them are presently under way in the Ministry of Transport and Communications and in the Ministry of Finance.

In the worst scenario, outflagging will endanger the jobs of several thousand Finnish seafarers. Ships could start to operate under the German flag, for example. German practice allows the use of a crew from, for instance, the Philippines, whose wage costs would amount to only a fraction of the Finnish level.

The Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK) has also taken a stand on the future of Finnish seafaring. It states that "outflagging in the hope of higher subsidies and cheap labour is threatening Finnish seafaring and jobs in the maritime sector". The organisation is demanding that the state should take an active role in solving the problems: "the government of the country should be aware of its responsibility for the future of Finnish seafaring. The task of the government is to ensure that Finnish seafaring can compete internationally on the same basis as continental European competitors."

Union seeks to prevent outflagging

According to the policy guidelines of the International Transport Workers' Federation (ITF), the Finnish Seafarers' Union has full rights to negotiate over the terms of employment on the SuperSeaCatFour. The ITF policy implies that the ship should follow at least the same of terms of employment as on Finnish passenger ships. Furthermore, Italian seafarers' unions have declared that their Finnish counterparts have the right to conclude a collective agreement for the ship, at a higher level than the Italian one.

SM-U has tried to persuade Sea Containers Ltd, as the major owner of Silja Line, to make a commitment that the Line's Finnish ships will not be outflagged. According to the union, the company has made a promise at least to negotiate first with the union before decisions are made.

Commentary

The sympathy strike by SM-U involved a significant dispute of principle concerning which flag the Finnish fleet will sail under in the future. Being weighed in the balance are: on the one hand, the EU's principles of free competition, its regulations concerning maritime transport, and the subsidies it allows; and, on the other, Finnish terms of employment. Furthermore, the reformed Maritime Act makes it possible to transfer Finnish ships to other countries' registers. In this situation of competition, possible future scenarios are that the EU countries with a lower level of costs or higher subsidies will try to step into Finnish routes, or that Finnish shipping companies will transfer their ships to other registers. The Finnish Shipowners' Association and Seafarers' Union are endeavouring to prepare for this situation by appealing for government subsidies, which could help to ensure that maritime transport will remain in domestic hands.

Through the strike, SM-U also attempted to avert the threat of a weakening in the terms of employment for seafarers. The issue at stake is that all employees should be paid the same wage for the same work, regardless of nationality.

In this case, free competition and wage earners' interests are in crude conflict. Such situations could be addressed through EU-level agreements, without wage dumping taking place within Europe. In seeking a solution, an effort should be made to strike a satisfactory balance (Juha Hietanen, Ministry of Labour)