Update on CalMac dispute and re-tender of Clyde and Hebrides Ferry Services (CHFS)

17th June 2015

CalMac dispute

The union continues to seek reassurances from Caledonian MacBrayne in the following areas of employment and conditions of service for CalMac workers:

Job Security – the union seeks the insertion into the current contract of employment with immediate effect of a guarantee that there will be no compulsory redundancies and no changes to staffing levels without agreement being reached with the RMT.

Conditions of Service – a term inserted into the current contract of employment with immediate effect that that there will be no changes to conditions of service without agreement being reached with the RMT.

Pensions – a guarantee that all members will remain in the current pension scheme (the CalMac Pension Fund) and that no changes will be made to the scheme without agreement being reached with the RMT.

Discussions continue to take place with the employer, in pursuit of the simple assurances that RMT legitimately seek to protect our CalMac members and their colleagues in this period of chronic uncertainty over their future employment and conditions of service in the company.

Following an overwhelming mandate recorded in the ballot of CalMac members for industrial action, the union has scheduled the following actions:

  • An overtime and call back ban between 00:01 hours on Wednesday 24th June and 23:59 hours on Thursday 25th June 2015.
  • Not to ‘turn to’ (book on) for any duty that commences between 00:01 hours and 23:59 hours on Friday 26th June 2015.

Re-tender of CHFS contract

The Scottish Government intends to publish the Invitation to Tender for this contract on 10th July. The ITT will contain the basic employment and service specifications upon which the two bidders, Serco and CalMac will base their bids to win the CHFS contract which is valued at a maximum of £1 billion in public subsidy over 8 years from October 2016.

The union isopposed to privatisation and re-tendering of Scottish ferry services.Privatisation leaks public money out of the Scottish ferry industry through lost dividends which are largely supported by public subsidy and investment. As with the near 20% (£40m) increase in the subsidy to Serco NorthLink for the Northern Isles 2012-18 contract, the Scottish Government intend to provide at least £20m extra subsidy per year over the life of the 2016-24 CHFS contract, compared to the £90m subsidy CalMac received in 2014. Of course, under the opaque arrangements of privatisation the extent of passenger fare revenue and company dividends that Serco has taken out of these lifeline services are treated as ‘commercially confidential.’

RMT delegates at this year’s STUC conference in Ayr were buoyed by a verbal assurance from the First Minister, Nicola Sturgeon MSP that CalMac will not be privatised. We wrote to the First Minister on 28 May seeking confirmation of her comments made to RMT delegates at STUC in April but have yet to receive a reply.

On wider ferries policy issues, RMT continue to regard the European regulation (EC/3577/92) requiring re-tendering of public sector contracts such as those for Scottish ferry services as an inappropriate imposition on this lifeline form of public transport. RMT believe that a legal argument in favour of exempting Scottish ferries from this regulation could be successfully made to the European Commission and are actively exploring the Teckal exemption as a potential avenue.

However, notwithstanding the content of the Ferries Plan to 2022, it remains unclear whether the Scottish Government hasformally challenged the European Commission over the effect of the re-tendering requirement on Scottish ferries.

The current timetable for re-tendering the 2016-24 CHFS contract casts doubt over the transparency and accountability of the Scottish Government’s approach. In particular, the plan to announce the winning CHFS bid after the Scottish Parliamentary elections on 5th May is extremely worrying to our CalMac members and their colleagues.It is clearly in the public interest for the Scottish Government to announce the winning bid for the CHFS 2016-24 contract before the date of parliamentary elections in Scotland.

RMT is alarmed by CalMac and the Scottish Government’s cynical use of the CHFS re-tender process to attack our members’ jobs, pensions and terms and conditions, on lifeline passenger and freight services. We continue to seek the Scottish Government’s support in meeting the demand we have made of CalMac in order to settle the current trade dispute, namely that, regardless of who wins any future tender all workers will remain employed by Caledonian MacBrayne.

We also continue to seek, in dialogue with the CalMac unions, STUC and Transport Scotland officials in the Pensions Working Group, the following protections in the CHFS ITT due for publication on 10th July:

1. Employment Protections – A current contractual claw-back mechanism, ensuring that subsidy to the operator is reduced in line with redundancy costs over a fixed figure, is essential for our members’ job security and continuity of service. This protection should be written in regardless of whether TUPE applies or not and should be in addition to TUPE.

Previous Precedent -We received a written assurance that such a protection would apply for the previous tendering process. In a letter from the then Scottish Executive to the STUC of 12 January 2006 it was stated,

“...we have looked very carefully at the employment implications of the tendering process. The Invitation to Tender document will invite bids on the basis that the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) applies. This provides some reassurance. This means that transferring employees would be entitled to be employed on the same terms and conditions as they had at the point of transfer. Whilst we are aware that TUPE offers protection only at the point of transfer, the contract will also include mechanisms to protect the terms and conditions of the existing workforce during the contract period. It is still possible that an operator could contemplate replacing the current staff with others on different terms and conditions. Consequently we will include provisions in the contract, and make it clear to the bidders, that if this was pursued the new operator would have to pay for any redundancy or compensation involved from their own resources (ie outside the terms of the subsidy arrangements). In addition, any savings in staff costs that arose would be clawed back through an equivalent reduction in subsidy. In our view this would create a major disincentive to an operator considering an approach involving replacement of the existing staff.”

2. No compulsory redundancies.

We continue to seek from CalMac and the Scottish Government a guarantee of no compulsory redundancies for the life of the CHFS contract from 2016, for the maximum eight years that the contract can run for.

Previous precedent - We note that the Scottish Government included a contractual guarantee of no compulsory redundancies in the contract it signed with Abellio earlier this year for ScotRail passenger services. There is also precedent on the London Underground, where RMT successfully negotiated a contractual no compulsory redundancy commitment prior to the part - privatisation of the Tube.

3. Right to remain in current pension scheme, on existing terms

The Scottish Government’s linking of Hutton-style reform of the CalMac Pension Fund to the re-tendering process itself is a major source of anger and concern for our members. Furthermore, the draft results of the April 2015 Triennial Actuarial Valuation CalMac Pension Fund will not be known until October 2015, with the full results unlikely to be known until 2016. The union is prepared to discuss reform of the protection scheme but this should be decoupled from the tendering process.

Previous precedent - Again, the ScotRail franchise agreement with Abellio provides a precedent where members stay with their existing pension scheme. In addition our members secured legislation giving them the right to stay in their existing pension scheme when the railways and London Underground were privatised.

4. No Changes to staffing levels without the agreement of the trade union.

This ensures that appropriate and safe manning levels are maintained.

Previous precedent - This was agreed prior to the part privatisation of London Underground in 2001.