New collective agreement for workers at Tallink shipping company

In September 2008, Estonia’s largest shipping company, Tallink, and the Estonian Seamen’s Independent Union signed a three-year wage agreement after intense rounds of negotiations, which involved a warning strike and a conciliation procedure with the Public Conciliator. The trade union demanded equal wage levels for workers carrying out the same jobs on the company’s different ships. The agreement introduces wage increases of 25%, 9% and 6% respectively over the next three-year period.

Background

The first collective agreement between Estonia’s largest shipping company, AS Tallink Group, and the Estonian Seamen’s Independent Union (Eesti Meremeeste Sõltumatu Ametiühing, EMSA) was concluded in 1997. It was agreed then that wage levels in the company would be increased annually based on the national average wage increase. As the agreement has been overlooked for several years due to the need for investments by the company, EMSA argued that it was now time to finally apply the agreement, as Tallink has become a publicly traded company and achieved a monopoly position in the Baltic Sea shipping industry.

Demand for better wages and working conditions

Another contentious point concerns the wage gap on Tallink ships under the Estonian flag. A wage gap ranging from 20% to 200%, depending on the position, has emerged as a result of the wage agreement concluded between Tallink and the Finnish Seamen’s Union (Suomen Merimies-Unioni, SM-U); this agreement increased the wage levels on three Tallink ships sailing the Estonia-Finland-Germany route to meet Finnish wage levels (EE0606019I).

EMSA also disputed the working conditions aboard ships. According to Tallink, the company offers modern working conditions as a result of investments in new ships. EMSA, on the other hand, has made a number of criticisms – for example, complaining of tight living conditions on ships, increased vibration and noise due to more powerful engines, tight work schedules, a high workload and overtime hours, which together with low wage levels cause increasing turnover of workers.

Negotiation procedure

The wage negotiations started in November 2007 and lasted 10 months. The final five months of the negotiations were mediated by the National Conciliator (Riiklik Lepitaja), since no agreement was reached in the bipartite negotiations.

EMSA proposed to equalise the wage levels of crew members on ships over a three-year period, introducing an initial wage increase of 50% in the first year, followed by two further increases of 25% in the subsequent years. In contrast, Tallink’s initial offer of an average wage increase amounted to only 7%, 5% and 3%, respectively, over a three-year period – an average of six times less than the trade union’s demand.

Despite the intercession of the National Conciliator, large differences remained regarding the positions of Tallink and EMSA, even though some adjustments were made. Employees considered that the wage increase proposed by the company would not allow workers to maintain their current standard of living, while Tallink highlighted that the high wage increase demanded would not be possible due to the poor economic situation at present.

Trade union calls warning strike

Due to the lack of a compromise, EMSA called a one-hour warning strike on 4 August 2008 in the passenger terminal at the Port of Tallinn. Crew members from a total of five ships participated: three ships in Tallinn port, one in Helsinki and one in Stockholm. According to trade union estimates, about 500 Tallink employees took part in the warning strike, which resulted in the postponement of some sailings from Tallinn.

Through the warning strike, the employees aimed to further emphasise the demand for equal wages and acceptable working conditions on ships.

Collective agreement reached

Despite the difficulties, the conciliation procedure ended in a wage agreement for 2008–2010 between both sides. The agreement will increase the basic wages of crew members on ships over a three-year period, by 25%, 9% and 6% respectively, commencing on 1 September 2008. These increases will be complemented by additional pay and fringe benefits. The wage increase for 2010 will be renegotiated at the appropriate time if the inflation rate is higher than the current rate forecast by the Ministry of Finance (Rahandusministeerium).

The agreement also included a provision recognising workers’ length of service, paying an additional 5% wage bonus to employees who have been with the company for more than four years and an extra 10% to employees who have completed nine years of service.

Furthermore, the parties reached a verbal agreement that employees will not be moved between ships with varying wage levels without prior notice.

According to EMSA, the final agreement affects about 2,000 Tallink employees. The employees working on three ships operating on German lines are not affected due to the previous collective agreement reached for these workers (EE0606019I).

Commentary

Tallink Group is one of the largest employers in Estonia, with 6,311 employees in the whole group and 4,458 employees on ships, according to figures as at 29 February 2008. It total, EMSA has more than 2,000 members, of whom 1,400 are employed on Tallink ships.

Kirsti Nurmela, PRAXIS Centre for Policy Studies

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