Helsinki (26.11.2013 - Heikki Jokinen) A German catering company came close to bringing Finland to a standstill in the middle of November due to so called agreement shopping. A dispute over the Finnair catering service personnel collective agreement led to threats of solidarity strikes by transport staff unions. This would have had the effect of halting Finnish exports and disrupted a major part of goods transport.
The national flag carrier Finnair outsourced its catering services in August 2012 to the German company LSG Sky Chefs, owned by Lufthansa. LSG assumed full managerial and operational responsibility for the in-flight and catering service provider Finnair Catering, and in doing so acquired a new name, LSG Sky Chefs Finland. However, it is still owned by Finnair.
LSG and Finnair issued a press release at the time saying "this agreement will not result in changes in employment contracts or employment terms for Finnair Catering's personnel." This assurance did not last very long. LSG announced in this autumn that it will use an alternative collective agreement that would allow for reduced salaries.
The company joined another employers association, one that would that would bring them within the ambit of the Service Union United PAM collective agreement. The existing agreement is with the Finnish Aviation Union IAU. Almost all 400 employees in the catering service are unionised and members of the IAU.
Agreement shopping, whereby the companies try to cut salaries by hunting after cheaper collective agreements, is not a new phenomenon. It has taken place earlier, especially in the telecommunication and IT service branches.
Agreement shopping has been condemned in no uncertain terms by the trade unions, which are adamant that employees must have the right to choose their own union. Ann Selin, president of PAM reiterates that PAM is not part of this dispute, and underlines that it is completely the fault of the employers. PAM does not tempt or seek to recruit members from other unions, she stressed.
Outsourcing makes vulnerable
The Aviation Union concluded that a new agreement would cut incomes by 20 - 30 per cent and refused to accept it. This was followed by a series of catering staff strikes.
The German executive director of LSG Finland Steffen Rosch remained resolute. But the situation soon escalated. The transport unions have a joint solidarity agreement and they said they would start support strikes should no agreement be reached.
This would have meant a complete stop of Finnair traffic, closing the harbours and other breaks in the goods transport.
The national conciliator, Esa Lonka, did his best to bring about an agreement, but LSG followed a hard line. The Aviation Union just asked for the right to keep the old collective agreement. It was also ready to accept the very moderate national wage agreement.
LSG agreed to sign the contract just before a strike wave would have swept over the country. It was, however, unsatisfied with the result. "In this so-called negotiation which is a dictatorship by the unions, we have faced the experience that the legal system in Finland does not work," said Steffen Rosch of LSG Sky Chefs Finland to Yle News. He also said that staff cuts will follow and Lufthansa might move the company to Estonia.
The dramatic process revealed just how vulnerable the country can be to companies that are outsourced abroad. And as some journalists have pointed out, for Lufthansa it really doesn’t matter at all whether Finland’s exports come to a halt or not and more to the point Lufthansa happens to be a Finnair competitor.
Finnair carried the costs of the dispute; the agreement with LSG was reached after Finnair promised to support it. The original savings of outsourcing might have disappeared already now.