The CBA issue and the SDU's compromise proposals

2017-06-04 In a press release/customer advisory from APMT Gothenburg on Friday afternoon, the company stated that it has rejected the SDU's latest compromise proposal.

APMT Gothenburg's press release on Friday the 2nd of June also stated that the company had not received a written presentation of the SDU's latest compromise proposal. The claim is incorrect. As requested by Maersk/APMT, an extensive reasoning text concerning the CBA issue and the SDU's concrete compromise proposals was sent to and received by Maersk/APMT on Thursday morning, the 1st of June. As the text might also serve to clarify the union's position on the CBA issue at APM Terminals Gothenburg to other port stakeholders, it is published below:

The CBA Issue at APM Terminals Gothenburg



Founded in 1972, the Swedish Dockworkers' Union (SDU) was early on engaged in two national contract disputes- in 1974 and in 1980- where it attempted to win its own national CBA with the employers´ organization. Both attempts to win this CBA were unsuccessful, and therefore the SDU sought other ways to represent its members and to carry out union work in Swedish ports.

In most ports with SDU members, a practice developed where the SDU was integrated in the Health & Safety organizations, and included in all local negotiations concerning terms and conditions. The Port of Gothenburg was no exception. The SDU regarded itself- together with the minority Swedish Transport Workers' Union (STWU)- as party to agreements made, even though they were not allowed to sign the actual agreements or to be a stakeholder in the CBA´s.

APM Terminals Gothenburg

When APM Terminals took over Gothenburg's container port, the company management (alongside DFDS, a neighboring Ro/Ro operator) raised the issue of signing a CBA with the SDU, recognizing that a vast majority of the dockworkers in the terminal were SDU members [some 85% of the dockworkers at APM Terminals]. The SDU confirmed they were willing to proceed with the signing of a CBA, but voiced concern with political, judicial, and practical obstacles that had hindered such a solution in the past. The SDU also stated that such a solution would be best sought in dialogue with other parties, noting that efforts to exclude the STWU or the employers´ organization Ports of Sweden could lead to new problems. After making enquiries, the local employers decided not to pursue the signing of a CBA with SDU, and the previous practice was kept in place.

The Dispute

The APM Terminals – Gothenburg Dispute did not start off as a conflict concerning the CBA. The SDU tried to address several local issues and repeatedly stated that a solution could be sought either within the framework of a CBA or without a formal contract (according to previous practice). As the conflict progressed during the second half of 2016, the SDU was barred from negotiations. APMT stated that the SDU would be stripped of all union rights that were not mandatory for non-CBA stakeholders according to Swedish law. From the autumn of 2016, APMT demanded and publically promised customers that a solution to the dispute would have to be based on a CBA. This statement served to corner all involved parties and to severely limit the number of feasible solutions. However, the SDU recognized the right of APMT to do so, and has since sought a mutually acceptable solution to the CBA issue, with respect to the core issues of the original dispute and in an effort to address and resolve production problems at the terminal.

The CBA Framework and Challenges 

The Swedish Labor System

The Swedish Labor System states that any union that signs a CBA with an employer gives up its right to take industrial action. Basically, the right to strike is traded for other rights awarded to a CBA stakeholder for as long as the contract is valid. The SDU fully accepts this rule and is willing to make that trade-off, if the union in practice actually gets the same level of influence as any other union which is primary party to a CBA in the Swedish Labor market. 

The National CBA

The practical challenge for all parties involved in this dispute is that APM Terminals is already covered by the national CBA between the employers´ organization Ports of Sweden and the STWU, which therefore applies to all dockworkers in the container terminal regardless of union affiliation. When national contract negotiations for the ports started this year, the SDU made a concrete proposal to transform the existing national CBA between the STWU and Ports of Sweden into a tripartite agreement between SDU, STWU, and Ports of Sweden. The proposal was rejected and the national framework remains the same: A new three-year contract has been signed between STWU and Ports of Sweden.

Conflicting Contracts

There are no legal obstacles preventing APMT and the SDU from signing a CBA that covers terms and conditions appliable to SDU members at the container terminal. It is legal for the SDU to fight for such a CBA and it is legal for APM Terminals to agree to it. The Swedish Labor Court clarified this again in case on May 17, 2017. 
However, if APM Terminals has two different CBA´s covering the same group of employees (dockworkers), legal issues could arise with regards to which CBA should be applied to any particular situation. In the Swedish labor market, this is generally handled with an inter-union framework. When no such framework exists, however, the basic legal principle is that the oldest CBA should be applied. This means that if APM Terminals and the SDU sign a CBA concerning SDU's members without involving the STWU, the company could be fined in court for breaching their first CBA by applying the later.

APMT's Proposal: Side Letter to the CBA

For the last seven or eight months, APMT Gothenburg has proposed that the SDU sign a side letter, committing the majority union to all existing and future CBA´s between the minority union STWU and Ports of Sweden/APM Terminals. By doing this, the SDU would gain some formal rights – the right to paid union time, the right to information, the right to automatically be summoned to negotiations.

Since December, the SDU has continuously asked to see the full catalogue of CBA´s that it is supposed to commit to in this proposed solution, and likely in any other CBA solution as well (including the new CBA´s established since the SDU was excluded from negotiations). The company has yet to presented this catalogue.

The SDU has rejected APMT's side letter proposal on the grounds that it would not, in practice, make the majority union- the SDU- an equal stakeholder but a rather a subordinate stakeholder to the STWU. Such a solution would mean that even though the SDU would have the right to participate in initial negotiations about new work patterns, layoffs, or production models, the majority union could then be by-passed and left out of an agreement between APMT and the STWU. The new CBA would automatically bind the SDU and all of its members. There are no legal or economic incentives for either the STWU or APMT to seek compromises with the SDU within such a framework, as the majority union would lack both the right to take industrial action and the legal tools awarded to any fully recognized CBA stakeholder. Such an unequal CBA relationship between the SDU and APMT, and between SDU and STWU, does not provide the groundworks for a fair or sustainable working relationship.

The SDU Compromise Proposals

Health & Safety

Normally, any union that signs a CBA also has the right to appoint Health & Safety Officers as well as a Head Health & Safety Officer. However, there is no legal precedent on how the H&S issue should be handled if there are two ¨competing¨ unions who both have signed CBA´s regarding the same group of employees. Any principle decided upon by APMT – for example the majority union in each sector of the workplace appoints the H&S Officer – may be legally challenged if it infringes on the rights of any of the unions. If the Swedish Labor Court rules that such matters should be settled by the principle that the union that signed the first CBA takes precedence, then the SDU would not have the right to appoint H&S Officers or a Head Health & Safety Officer even if it has signed a CBA. To address this issue, the SDU has proposed that in any CBA solution, the Health & Safety issue should be regulated in a separate CBA that secures the SDU's right to appoint H&S Officers as well as a Head H&S Officer. To minimize the risk of conflicting contracts, we believe it could be safer not to try and decide on any general appointment principle that might be considered to infringe on the STWU's rights in this regard. If APMT does not live up to its commitments towards SDU regarding H&S Officers, such a contract could either open up for legal action or the possibility for the SDU to opt out of the whole CBA arrangement.

A Side Letter to the CBA with Supplements

In order to find a long-term solution, the SDU sought compromises connected to APMT's own side letter proposal. This winter, we made several proposals for supplements to such a side letter in order to- in practice- gain the same obligations, rights, and influence as a fully recognized CBA stakeholder. APMT rejected these proposals by saying that the SDU seeks a “veto” power in response to APMT making new agreements with the STWU when the majority union disapproves. There is merit to such a claim only if the company means that the STWU hold such a “veto” right against APMT making new agreements with the SDU in the company's own proposal. The SDU does not seek a “veto” right, but merely seeks the same right as any other union signing a CBA in the Swedish Labor market. The SDU seeks a framework which pushes all parties to continuously seek mutually accepted agreements involving SDU, STWU and APMT. The SDU remains open to any alternative suggestions of how this could be achieved.

A Local Tripartite CBA

While a tripartite agreement was once again rejected on the national level, the SDU considers a local tripartite agreement at APM Terminals as the best long-term solution to maintain stable labor relations in the workplace. A tripartite CBA would include instruments to handle inter-union disagreements and remove all risks connected to conflicting CBA´s, as well as securing equal standing of all respective unions in relation to the company. According to the mediators, APMT accepted this proposal but the STWU rejected it. As such a solution is dependent on the approval of the STWU, the SDU has limited means to influence the STWU and has no intention of fighting the minority union in order to force them in that direction. 

A parallel identical CBA (“mirror agreement”)

The SDU's latest proposal, presented before APMT's lockout was launched, is an attempt to try to accommodate all the concerns raised by involved parties and work around the obstacles. The SDU suggests a structure of 
parallel identical CBA's covering SDU members at the terminal, mirroring all existing national and local CBA´s concerning the dockworkers. The SDU has been part of negotiations and agreements since the container terminal was first built, so the union regards itself as part of those agreements it is familiar with and can sign them immediately. The reservation for such a solution is that the SDU cannot 'in blanco' agree to sign CBA´s it has not participated in forming or does not know about, especially from the last 6-month period when the union has been shut out of negotiations. Such exceptions need to be identified and reviewed. In these cases, and on current issues that need to be solved quickly (perhaps within the company's proposed working groups) in order to establish an effective and reliable production, the union proposes immediate direct talks (preferably including the STWU) with the goal of reaching mutually acceptable parallel identical CBA´s as well. 

Such a solution is less than optimal from the SDU's point of view, but a structure of independent but identical CBA´s gives the SDU more legal tools and bring it closer to an equal standing with the STWU in relation to APM Terminals. Contrary to the tripartite solution, this proposal is not dependent on STWU's approval. Furthermore, it does not carry the risk of conflicting contracts covering the same group of employees (with the risk of legal challenges for the company) as the contract wording is identical. If the company continues to concern itself with reaching identical agreements with both dockworker unions, the exposure remains limited. This option is legal, practically manageable, and immediate.

[An alternative to this, which in some regards would allow all parties more space to manoeuver, would be to establish a largely but not fully identical structure of CBA´s between the SDU and APMT covering the SDU´s members, while at the same time reaching a separate agreement with the STWU where the minority union relinquishes it's right to take legal action if the different contracts conflict in relation to SDU members. This would mean APMT could freely apply CBAs with the SDU on SDU members even if they in part conflict with the company's CBA´s with the STWU. This, however, is once again dependent on the STWU's approval, which the SDU cannot influence and is a less preferable option than a tripartite agreement.]

The SDU remains open for feedback or other suggestions. The union continues to invest a lot of time and resources in trying to find a mutually acceptable solution to the CBA issue in accordance with the company's demand, and feels the need to receive constructive response from APMT. It needs to be stressed once again that the primary concern of the SDU is to resolve the local issues at hand - with or without a final solution to the CBA issue- not only to end the dispute but to try to rebuild an efficient and reliable terminal.