In a move that has upset various UK unions, Stena Line plans to furlough 600 employees with 150 redundancies across the UK and the Republic of Ireland.
This measure is an unavoidable response to the on-going global COVID-19 crisis, that has had a hugely damaging effect on travel and transport across Europe, the company explained.
The company also said that it would ensure those furloughed maintained 80% of their salaries under new UK legislation.
Since the crisis emerged, Stena Line claimed that it had experienced a huge decline in travel bookings and freight volumes. The company estimated that passenger figures will not recover until well into next year. As a result of the significant reduction in revenue, Stena said it was forced to take tough decisions in order to cut costs and ensure vital supply lines of essential goods in Europe.
“The COVID-19 crisis has meant that Stena Line is experiencing a significant decline in passenger and freight volumes across all its 20 European routes. We are having to make some very difficult decisions, that we hoped we would never have to make,” said Ian Hampton, Director, Stena Line.
These measures involve both UK and Ireland shored-based and seagoing employees, including those working on vessels on the Irish Sea and North Sea. It follows a reduction of the number of sailings on several routes, as vessels have been taken out of service.
“In order to secure the continuity of our freight operations, we have no choice but to reduce our costs. We are committed to keep vital supply lines open for UK and Ireland. Regrettably, we must furlough employees on temporary paid leave and make redundancies, as we adjust to this new reality. We will do everything in our means to ensure essential supply lines stay operational during what is a very difficult time for the company and the countries that we serve.” Hampton added.
Those on furlough will receive 80 % of their salaries. Where UK and Irish government schemes don’t cover the full amount, the remainder will be paid by Stena. Furlough will also be used to help vulnerable employees, such those that need to self-isolate, due to underlying health conditions, those that are pregnant, and where possible, those with caring responsibilities, due to COVID-19.
Consultation on furlough and redundancies has commenced with the trade unions.
On Monday, 16 March, Stena Line announced redundancies that will affect 950 Scandinavian employees. A number of these employees have since also been furloughed. Further job losses have subsequently been made in Denmark and the Baltics.
Two days before, Stena Line had suspended the Trelleborg Sweden and Sassnitz Germany ferry route until further notice. On 8th April, the company announced plans to permanently close the route.
In recent years, around 300,000 passengers annually travelled via Sassnitz/Trelleborg, while freight volumes and train traffic on the route declined.
Stena Line has initiated discussions with the German worker´s council (Betriebsrat). The ropax ‘FS Sassnitz’ is laid up at Mukran, Sassnitz, until further notice.
Stena Line is currently operating two ferry routes between Sweden and Germany, which are primarily carrying freight, having a reduced passenger capacity. These are Trelleborg/Rostock operated by ‘Mecklenburg-Vorpommern’ and ‘Skåne’, which operate 40 departures per week and Gothenburg/Kiel with ‘Stena Scandinavica’ and ‘Stena Germanica’, on 12 departures per week.
Reacting to the 6th April letter sent to UK’s and Irish Stena Line staff, TSSA General Secretary, Manuel Cortes, whose union represents Stena’s shore-based staff, said: “We fully understand the huge financial impact of Coronavirus. Our union will work with Stena to seek to avoid the need for any redundancies.
“We welcome the fact that Stena is proposing that employees should be furloughed as an alternative to redundancies, but are naturally concerned that redundancies are proposed anyway.
“We stand ready to assist Stena in making representations to governments in London and Dublin to ensure vital sea links remain open, and we believe that both governments should offer assistance to the company in these unfortunate circumstances.
“Stena has refused to rule out a further increase in furlough leave, redundancies and changes to timetables and/or the route network. I’d simply urge bosses to tread with caution at this time, to ensure that everything possible is done so the company and our members can get through this crisis together.
“It’s also crucial that Ministers in Britain and Ireland are proactive in ensuring important transport links are maintained at this critical time.”
The RMT union also responded to the news. General Secretary, Mick Cash, said: “This is another major employer of UK seafarers reacting to flat lining demand by gambling with key workers’ jobs and future at a time of national crisis.
“Redundancies are a serious development and must not be used to avoid other alternatives that would save jobs. We seek further discussions on that as part of the mandatory consultation process.
“Dock and port workers are eligible for state support but we cannot agree to ‘furlough’ for our seafarers when the Government guidance does not give UK seafarers at Stena Line or other major employers clarity on eligibility.
“The furlough scheme will be retrospective so Stena Line should commit to covering 100% of wages for everyone affected by today’s announcement, as well as reinstating the company sick pay scheme for all employees,” he said.
The RMT union has also reacted strongly to P&O Ferries proposals for restructuring the business during the pandemic.
In a consultation document sent to the RMT, the union responsible for seafarer ratings on P&O Ferries’ Irish Sea, North Sea and Dover/Calais fleet, the company proposed a series of changes to ratings’ terms and conditions, including pay cuts, replacement of UK seafarers with foreign crew, no strike clauses, statutory redundancy, cuts to the sick pay scheme, scrapping benefits for long service, plus leave restrictions.
The company is attempting to apply all the re-negotiated crewing and terms and conditions, including on the new ferries ordered from China that are due for delivery in 2023 and 2024.
Cash warned: “Threatening permanent cuts to seafarers jobs, pay and conditions and the maritime supply chain at a time of national crisis sends a message of utter contempt to my members and the country as a whole.
“Job cuts, pay cuts, taking annual leave in rest periods, replacing UK seafarers with cheaper foreign crews, statutory redundancy, cuts to sick pay – it’s all of the things that P&O Ferries have always wanted to do to our members and the UK economy.
“To use the temporary market conditions created by the Coronavirus to attack our members, the maritime workers this country will always need, is nothing short of contemptuous and the Government needs to step in here to provide more guarantees to protect British seafarers’ jobs and apprenticeships for the future.
“P&O Ferries say that no one is going to bail them out. Maybe they should go back to their corporate masters at DP World in Dubai who will pay a $332 mill dividend to private shareholders on 29th April. That would easily cover the £28.4 mill P&O Ferries wants to rip out of the hands of my hard working members and their families.
“If P&O think that holding a gun to our members heads whilst sprinting towards the cliff edge is ‘consultation,’ then they’ve got another think coming,” he said.
Meanwhile, the GMB Union has called on the UK Government to support ferry workers after P&O’s announcement.
The union warned ferry companies may go bust if the Government fails to step in and provide much needed support for the industry.
Frank Macklin, GMB Regional Organiser, said: “P&O carries 15% of the total goods that arrive into the UK every year and when they start advising us that they have a problem, we all have a problem. We need to sit up and listen to them.
“In total, 33% of goods carried by P&O is food such as fresh fruit and vegetables. The rest is made up of other essential items such as medicines, medical equipment and hazardous products such as detergents and other cleaning products.
“Whilst the current Government continues to promise lots of popular and morale boosting schemes for employers, employees and the self-employed, it has become very apparent access to these schemes and promises is neither easy nor the quick fix that this Government are announcing to great fanfare.
“GMB is calling on the Government to step up and match its words with meaningful action that will help companies, such as P&O to protect their staff. They must be allowed to get on with the job of getting goods to the right place at the right time, instead of having to worry if they will be able to pay their staff’s wages or be in a position to carry on trading.
“At the end of the day, it would appear that despite this virus slowly spreading across the globe to the UK, our Government have been in hibernation and have woken up way too late to stop it from killing hundreds if not thousands of UK residents. Ministers also seems to be lacking when it comes to keeping the essential logistical operation moving.
“GMB is demanding the Government get around the table unions and ferry operators to ensure no one is left behind in the effort to keep this industry running whilst we are in the deep crisis in which we find ourselves,” Macklin concluded.