Union raises strike threat at oil company

In late 2005, the company-level trade union at Mažeikių Nafta, a major oil company, threatened a strike over pay demands - a very unusual step in the Lithuanian private sector. The union's call for substantial wage increases reflects rapid growth of average wages in Lithuania and Mažeikių Nafta's high profits.

Trade unions are traditionally more active and stronger in the public sector than in the private sector in Lithuania (LT0412102F), and what little strike activity has occurred in recent years has been in the public sector (LT0510102F). However, in late 2005, the company-level trade union at the country's largest concern, AB Mažeikių Nafta (MN), announced that it was planning to organise a strike.

MN is a profitable company, with around 3,500 staff, involved in oil refining and running a marine terminal and pipeline system. It has a number of subsidiary companies, such as the Mažeikių Nafta Trading House.

In late 2005, the MN Employees' Trade Union (Mažeikių Nafta profesinė sąjunga, MNPS), given the profitable operation of the company, issued demands for a wage increase to management. MNPS demanded that the overall wage fund be increased by 20% and monthly pay by 10%. It also called for 'health recovery allowances', set at the same level as annual leave pay, and equal bonus payments for all employees when the company operates in profit.

In a context of current rapid economic growth in Lithuania and relatively substantial labour migration to the 'old' EU Member States, earnings are growing rapidly. In 2004, gross monthly earnings increased by 7.2% compared with 2003, while the increase in the year to the third quarter of 2005 was 9.4%. According to Virginija Vilimienė, the chair of MNPS, 'wages/salaries at MN have grown by as little as 2% over recent years, and this increase was not enjoyed by all staff members'. The trade union sees it as reasonable to seek a more rapid pay increase on the grounds that current pay levels are not high and employees will be tempted to leave the company.

However, management representatives argue that MN employees are comparatively highly paid in regional terms. According to the human resources manager at MN, the average monthly gross wage of workers at the company was more than twice the national average in 2005.

The company collective agreement at MN is due to expire on 19 March 2006. It is thought quite probable that the trade union and management will succeed in reaching an agreement on pay increases and other social guarantees, thus averting a strike.

This information is made available through the European Industrial Relations Observatory (EIRO), as a service to users of the EIROnline database. EIRO is a project of the European Foundation for the Improvement of Living and Working Conditions. However, this information has been neither edited nor approved by the Foundation, which means that it is not responsible for its content and accuracy. This is the responsibility of the EIRO national centre that originated/provided the information. For details see the "About this record" information in this record.