Swedish ferry operator Viking Line has decided to transfer M/S Viking XPRS that operates between Tallinn and Helsinki under the Estonian flag, writes Äripäev. This decision will transfer about 230 jobs from Sweden to Estonia.
Another ferry M/S Rosella that operates between Aland islands and Kapelskär in Sweden will be transferred from the Swedish flag to the Finnish flag. The two ferries employ about 330 people.
The key factors behind the decision were pay levels and other economic reasons, especially the appreciation of the Swedish krona to euro. Jüri Lember who heads the Estonian trade union of seamen, says that Viking Line is interested to save on tax costs as such a transfer would enable the company to pay lower wages to ferry personnel and cut costs generally.
Lember said that negotiations over the transfer began last autumn. „There were two trade unions – we and the Finns – against one employer. We signed a memorandum of understanding that included a collective agreement and that is in average 300 to 390 euros higher a month than what is today in Tallink,” said Lember, adding that this could drive Tallink employees to Viking Line which pays higher wages. A representative of Tallink was not available for comment.
Lember said that, paradoxically, it is the Estonian seamen of Viking Line who lose most because of the flag-change. “These fifty or so Estonians are today more than they will be when the ferry is transferred under the Estonian flag,” said Lember, adding that trade unions don’t like such games with labour costs. “Unfortunately, this is an economic reality and one reason why our wages and also standard of living are lower than in Scandinavia,” he said.
Lember said that most employees hired by Viking Line in recent years have signed fixed-term employment contracts, many of which expire in the summer. “It was done to avoid large redundancy payments. People are taking it into account,” he added.
Inno Borodenko, CEO of Viking Line in Estonia, says that the decision over the transfer of XPRS to the Estonian flag is not yet final. “Yes, there’s an agreement, but no final decisions have been made yet. Negotiations are ongoing and it is not yet possible to say that XPRS will go under the Estonian flag,” he said.
Borodenko said that the ferry company was shortly starting negotiations with Swedish trade unions. It was announced last year that the Swedish trade union of seamen SEKO was claiming EUR 21.6m from Viking Line in damages for the planned transfer of Viking Express to the Estonian flag. SEKO’s head Tomas Abramsson has said that SEKO is going to demand that all employees maintain their jobs under the new arrangement.
Viking Line Abp, leading Finnish ferry operator, has been operating on the Baltic Sea since 1959. It has eight ferries and group revenues totaled EUR 516m in 2012. The company made a net profit of 0.9m euros in 2012, down from 7.6m in 2011.