UPM strike over, workers head back to make paper

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The 112 day strike at papermaking giant UPM Kymmene, which crippled production at the €10bn a year business since new year’s day, and raised the anxiety levels of printers everywhere, is over.

Making paper again: UPM strike ends

UPM and the Paperworkers’ Union have just agreed on a first-ever business-specific collective labour agreements for the five UPM businesses, which will run for the next four years, ending the longest ever strike in Finnish papermaking history.

The strike at UPM began on January 1, with the company demanding that paper workers be split into five separate business units and a different collective agreement applied to each. The union was resolutely opposed, saying that would have left half their members at UPM without a new agreement.

Now almost four months later the union claimed victory in the deal just agreed, saying, “The essential result is that the extensive impairments required by the employer, such as the increase in working time without compensation, ie the number of hours worked, did not materialise."

No paper has been manufactured by any UPM Finland mills since January, with the paper workers union receiving support from the electricians and transport workers union. Some 200 workers from the 2100 staff on strike were ordered by the courts to keep the plants maintained. Output is expected to begin to ramp immediately.

The strike exacerbated concerns over global paper supply, particularly for commercial grades, newsprint and especially labelstock, with UPM Raflatac manufacturing its own products, and also providing the base liner for many other brands. Tony Bertrand, marketing manager at Ball & Doggett, which distributes UPM grades here, said the strike was “not helping” those issues.

Ovato NZ shut its entire heatset business earlier this month citing concerns it was not able to source paper supply, sending 100 staff to the dole and leaving New Zealand with just two heatset print businesses. The shipping crisis has led to massive freight cost rises for Australia and New Zealand, and is seeing lead times for supply blow out, with the UPM strike contributing to anxiety among printers everywhere. However local paper distributors have been telling the industry in Australia and New Zealand there is no need to panic, and that they have supply under control, through their multiple supply sources.

The strike covered UPM Pulp, UPM Communication Papers, UPM Specialty Papers, UPM Raflatac and UPM Biofuels units in Finland. UPM will restart customer deliveries as soon as possible.

The conciliator submitted settlement proposals for separate collective labour agreements for UPM Pulp, UPM Communication Papers, UPM Specialty Papers, UPM Raflatac and UPM Biofuels, and both parties approved them.

Riitta Savonlahti, executive vice president, Human Resources, UPM, said, “We are very pleased that the parties have approved all settlement proposals and that the Paperworkers’ Union’s long strike ends. UPM and the union have made history together by agreeing on five business-specific collective labour agreements, which replace the paper industry´s old agreement stemming from the 1940’s. UPM’s long-standing goal has been to take collective bargaining to a level where the conditions of the work are best known, ie, the individual businesses. The negotiations lead to agreements that benefit both the businesses and the employees and strengthen the premises for success well into the future." 

The contract period of the new agreements is four years. Pay increases are in line with the current industry norm. Revisions to wages will be negotiated after the first two years. New agreements are structurally less complicated than the old one, and the number of pages is about half of the earlier.

A significant change in all business-specific agreements is the substitution of periodical pay with hourly pay. Hourly wages are paid by the work done, making the formulation of the pay easier to understand. New collective labour agreements make it possible to take competence and performance into account in wage formulation. All businesses also agreed on added flexibility to shift arrangements and the use of working time.

Business-specific solutions to increase productivity

UPM Pulp agreed on switching to uninterrupted 365-day running of the pulp mills and more flexible use of workforce during the long maintenance shutdowns. Restrictions on the use of fixed-term employees were removed. Going forward, wage formulation supports learning and competence, and the development of workplace practices.

UPM Communication Papers, our graphic paper business, agreed on additional hours and flexible use of working time, which are essential for smooth operation. Depending on the working time format, working hours will increase by 24-32 hours per year, except for day work, where the working hours remain unchanged. With the changeover to hourly pay, the extra hours increase earnings accordingly. On a weekly level, the increase of working hours is about half an hour per week. In addition, an encouraging pay system was agreed on, which improves particularly the earnings of maintenance and day work. The agreement includes a wage payment guarantee for the first two years of the contract period.

UPM Specialty Papers agreed on terms that improve competitiveness and reliability of deliveries. The new collective labour agreement widens the scope of local bargaining also at mill level and improves operational profitability during public holidays. The formulation of pay rewards good performance better than previously.

UPM Raflatac’s collective labour agreement makes it possible to build more flexible working hour arrangements and resourcing of Tampere factory. Thus, the new agreement paves the way for an increase in capacity utilisation, that improves production efficiency and opens opportunities for employment.

UPM Biofuels, ie the Lappeenranta biorefinery, agreed on flexible use of shifts and training in shift work. Pay structure supports personal development and good performance better than before. In addition, the parties agreed on arrangements, which enable the refinery to be kept in production-ready state, instead of complete ramp-down, also under possible work stoppages.

“In Finland, we have excellent mills and highly skilled employees. It is good that we get to start the work at mills again. Now it’s time to move on together,” said UPM HR VP Riitta Savonlahti.

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