Reederei Foroohari and its management arm BF Shipmanagement has won compensation from the German union Ver.di over the boycotting of one of its ships for not signing up to an International Transport Workers’ Federation (ITF) approved pay agreement. The admission of fault by Ver.di, which acted as an affiliate of the ITF, could have a significant impact on its willingness to boycott ITF ships in Germany.

The dispute dates back to the boycotting of the 10,700-dwt multipurpose ship BF Timaru (built 2007) by ITF inspectors in Bremen in November 2015 when it was claimed the vessel had not signed up to an ITF-approved pay agreement.

Foroohari owner Bijan Foroohari did not, as many owners do, sign up to the ITF wage agreements and instead challenged the three-day boycott in a Bremen industrial tribunal claiming back lost charter hire and other associated costs. Last week, Ver.di chose to pay out EUR 64,000 ($66,770) in compensation by “consent decree” rather than take on the owner in ligation. The payout and costs are set to be shared by Ver.di and the ITF. In a statement Foroohari’s legal representation, Bremen-based law firm Ahlers & Vogel, said the payout was viewed by the tribunal as a “judgment by confession”.

According to TradeWinds sources, in preliminary hearings the Bremen judge leaned towards the owner’s position highlighting Ver.di’s failure to notify the owner in sufficient time and the failure of the ITF inspector to inform the owner. He informed the ship’s manager in error. The judge was also critical of the ITF, asking the owner to sign a wage agreement with which he was unfamiliar.

A Ver.di official pointed out that the failings are “formal mistakes” of procedure by the inspector rather than a decision against the principle of ITF boycotting. However, TradeWinds understands the Bremen judge also took issue with the ITF’s demand that the crew become members of the ITF as part of joining an ITF-approved wage agreement and the owner pay union dues, raising questions over the legitimacy of ITF boycotts.

Each year the ITF and its maritime union affiliates boycott dozens of ships around the world if it feels crew are not employed based on its minimum wage and working condition agreement or if wage agreements are not being adhered to. The move also comes as an indication of the increasingly fractious relationship between owners and the ITF over wages while the industry is stuck in recession.

Last month, TradeWinds exclusively reported how the ITF had rejected a call by the Joint Negotiating Group – shipowners’ representative in shipping’s largest collective bargaining agreement the IBF – to defer a 3.5% wage hike due next year because of the current market downturn.