Isle of Man Briefing for House of Keys
Introduction
The entry into service of Mezeron Ltd has placed in jeopardy the future of the Isle of Man Steam Packet service, a company that has played a vitally important part in the Isle of Man economy and employs many local seafaring ratings and officers. The Isle of Man Steam Packet is being undercut to such an extent that it could make its continued operations unsustainable.
This follows the recent introduction into service of 2 Mezeron ships (Kurske and Kalana) run by the IOM based German ship management group, Dohle. The Mezeron ships are being operated with Eastern European seafarers on exploitative pay and conditions and are threatening the future survival of the Isle of Man Steam Packet.
The joint trade unions do not view increased competition on the route as a problem providing there is a level playing field. However this is certainly not the case with the new ships, the Kurske and the Kalana, both flagged in Estonia and crewed with seafarers from a number of countries from Eastern Europe on exploitative pay and conditions.
Security of Employment
Current employment for workers of the Isle of Man Steam Packet is in danger due to the drastic undercutting by Mezeron. The company has already secured a number of key container accounts, including retail giants Shoprite and Tesco. We are informed that the newcomer has picked up 50% of the available business in a matter of weeks.
In view of the inherent danger that this new service entails, the joint trade unions believe that safeguards need to be provided for existing Isle of Man Steam Packet workers. One of the most important of these is the application of TUPE guidelines for workers engaged on Isle of Man shipping operations.
This should include provision for the employment of the existing Isle of Man Steam Packet workforce so that they follow work that might be lost to another operator.
National Minimum Wage
The provisions of the current Isle of Man Minimum Wage Act 2001 are totally inadequate in providing a safety net for seafarers working on ships from Isle of Man Ports.
Most obviously a ship can simply flag to another state and avoid paying the National Minimum Wage. There is a very simple registration process in the shipping industry which can accommodate such a transfer. In any event the Mezeron services are flagged in Estonia.
However even if the ships were flagged in the Isle of Man Mezeron Ltd can also avoid the National Minimum Wage by utilising Eastern European seafarers who are not entitled under the legislation to receive this basic minimum standard.
In addition to the National Minimum Wage other shore based occupations have in place a work permit regime which also acts as a safeguard against the kind of bargain basement low cost operation that drives a legitimate Isle of Man company out of business.
As a matter of urgency the joint trade unions are calling for the enforcement of a National Minimum Wage as a guaranteed minimum for those foreign national seafarers on ships which are trading from Isle of Man ports, and travelling to the UK or Ireland.
Pensions
If the Isle of Man Steam Packet (I.O.M.S.P.) is forced into bankruptcy or has to withdraw from service the closure of the pension scheme could leave I.O.M. Steam Packet employees without protection.
The UK Pensions Scheme Acts of 1993 and 1995 are applicable in the Isle of Man. However there is no equivalent to the UK Pensions Protection Fund.
The joint trade unions are therefore seeking no loss of pension entitlement or benefits for members employed by the Isle of Man Steam Packet.
Misinformation from Mezeron
The company have claimed that the seafarers they employ are locally based. This of course is not true as the seafarers employed by Mezeron are from Estonia, Latvia, Russia and the Ukraine. The rates of pay are as low as £2.92 per hour for a Bosun, £2.54 for an Able Seamen and £2.91 for a Ships Cook. The Captain of the ship is on £7.48 which is half of the Bosons’ rate on the Isle of Steam Packet.
Impact on the Isle of Man economy
There is now a real fear that the undercutting by Mezeron Ltd could damage many Isle of Man businesses that rely on goods and services.
Freight revenues currently subsidise passenger operations but the freight business is of course now being undermined by Mezeron. The IOM Steam Packet freight rates are already in the first stages of being reduced. If I.O.M.S.P. is undermined the current stability provided for local business will be lost. The savings that are being made by Tesco and Shoprite are not being passed on to local businesses/suppliers.
Public Ownership
RMT have long standing policy supporting public ownership. The union’s 2009 RMT Annual General Meeting was held in the Isle of Man and the then Minister for Trade and Industry, Mr David Cretney, gave a fine introductory speech talking about the virtues of important transport links provided for the benefit of the community.
The Minister provided delegates with an overview of transport in the island with 250 people employed on a successful publicly owned and operated bus service. He also told RMT delegates of the importance of other vital island transport, not least the sea transport links run by the IOM Steam Packet.
The Isle of Man Steam Packet would, we believe, work well in public ownership providing the guarantees and safeguards sought for a successful operation were maintained.
Benefits of the User Agreement for the Isle of Man
The User Agreement with the Isle of Man Steam Packet was introduced as a result of the previous failure of the market to establish a secure and sustainable service. Previously the Isle of Man Steam Packet and Manx Line Ltd competed for business but the Isle of Man passenger and freight market was not sufficient for two operators.
The Agreement has therefore given stability to both the company and guaranteed services to the Isle of Man. It has facilitated long term investment in new tonnage to provide additional capacity and services.
In addition to enabling the company to offer higher passenger and freight frequency there has in many cases been real fare reductions. As a result of the investment the Isle of Man Steam Packet have a modern flexible fleet of vessels including a new fast craft.
Tynwald Select Committee reports
A Select Committee report into the Isle of Man Steam Packet published in November 2008 concluded that the whilst there was some confusion over fare structure the Steam Packet prices passengers and car transport were competitive and represented value for money in comparison with other Irish Sea ferry operators.
The committee also concluded that no excessive charging for passengers or freight had taken place. In addition standards of service were being met and many were being exceeded.
Conclusion
The joint trade unions seek action from the Isle of Man Government in order to combat the unfair practices and social dumping of a rogue shipping company which threatens to drive out a ferry company after 180 years of continuous operational service to the Isle of Man.
The Mezeron ships are being crewed with seafarers on exploitative pay and conditions. The union does not seek special favours for the Isle of Man Steam Packet as a company, other than looking for the security of employment for Steam Packet employees through the application of a level playing field that allows competition on the basis of good quality passenger and business services. There is simply no way that Isle of Man seafarers can afford to live on pay levels as low as half the rate of the National Minimum Wage.
However the joint trade unions do consider that when taking into account the benefits of the User Agreement, and the evidence from the select committee, the Isle of Man Steam Packet has served the Isle of Man well. We should also remember that unlike other island services, such as those to the Clyde and Hebrides and the Northern Isles, no direct subsidies are received even though cross subsidy is applied.
The joint trade unions now hope that the Isle of Man Government will agree the urgency of taking action.