Hapag-Lloyd has announced internally an across the board pay cut of at least 5% for all staff worldwide including seafarers, with senior employees facing a 20% reduction in salary.
Hapag-Lloyd has announced internally an across the board pay cut of at least 5% for all staff worldwide including seafarers, with senior employees facing a 20% reduction in salary, the company has confirmed.
While most top shipping operators keep their remuneration policies under wraps, sources familiar with the maritime labour market are not aware of any other big name operator that has adopted a similar policy.
However, Hapag-Lloyd indicated today that its hand has effectively been forced, as taking an axe to payroll and other costs is a condition of the ?1.2bn ($1.8bn) in loan guarantees it is getting from the German government.
The company is not a member of the International Maritime Employers Committee, which recently agreed a temporary standstill in benchmark rates for seafarers with the International Transport Workers" Federation through the International Bargain Forum mechanism.
Accordingly, it is at liberty to set pay scales as it sees fit and will now enjoy competitive advantage to leading rivals such as CMA-CGM, Maersk, Evergreen and MSC. That may bolster the hand of those seeking a 10% decrease in seafarer wages, which is still the official demand of the shipowner group in the IBF when talks resume next year.
However, Hapag-Lloyd will pay a price in terms of staff dissatisfaction, including the possibility of legal challenges under employment law in some countries in which they operate.
One disgruntled employee in its UK subsidiary ? thought not to be unionised ? revealed: ?Hapag-Lloyd staff held meetings with management on Wednesday and were told in no uncertain terms that jobs will be under threat if the voluntary 5% reduction is not agreed throughout the UK.
?The company initially told staff this was voluntary but are now saying they have every right to terminate the employee"s contract and give them a new contract on a lower wage. Staff are angered and feel the are being bullied in to a corner by management, and will be taking legal advice on where they stand if a new contract is refused.?
In Germany, Hapag-Lloyd staff have already agreed to a scheme, which will see salaries cut by 5% for those employed under the collective wage agreement and 7.5%-plus for those on individual contracts.
A spokesman said: ?We all have to contribute. It is 20% for the board, 15% for the managing directors, 10% for senior directors, 7.5% for what we call level four, which is middle management, and 5% for the rest of the staff.?
It has already been announced that there will be no end of year bonus this year, and that pay will be frozen in 2010.
Separately, one well known crew supply agency said that a US oil major had imposed wage cuts of up to 8% for seafarers it hired, on a take-it-or-leave-it basis. However, it promised to reinstate the pay once the price of oil recovers to a specified level.
The main Anglo-Dutch seafarer union added that it knew of pay freezes, but not actual reductions. Nautilus International said that it had reached several 2%-3% increase settlements in recent month.