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Fearing a flight of workers after tax change

SAR operator Lufttransport predicts some of the staff will find other jobs due to the tax rules changes in Svalbard from next year. FOTO: Eirik Palm

Fearing a flight of workers after tax change

Several employers believe employees will quit because of tax changes in Svalbard. Lufttransport believes there is great risk for the quality of emergency services.



13.09.2014 kl 12:10

Tightened tax practices in Svalbard effective as of the beginning of next year means employees who work shifts will lose their Svalbard tax rate of 16.2 per cent if they continue in shifts of 14 days of work and 14 days off. That has consequences for several companies with employees who commute between Svalbard and mainland.

Lufttransport AS fears more search and rescue staff may choose to quit and it will become more difficult to recruit competent personnel for rescues because there is greater turnover.

"One thing is the economics," said Næsh Hendriksen, administrative director of Lufttransport and chairman of LT Tech AS, the technical side of the company. "Another thing is that the governor is going to find it challenging to ensure its readiness in the future because it will find it difficult to maintain expertise and there will be difficulty with recruitment."

A letter from the companies to Norwegian Finance Minister Siv Jensen (Progress Party) makes it clear that a tightening of tax policy will lead to an "increased risk for major changes than is desirable" and "a significant risk for obtaining sufficiently skilled labor for SAR operations."

Different rules
The operator of the rescue services company in Svalbard points out there are several conflicting rules: On the one hand, the requirement for a state of readiness in the contract with the governor and the Department of Justice; on the other, a tax rule mandating employees must be in Svalbard at least 30 days to be eligible for Svalbard's tax rate.

The requirement for readiness allows employees of the SAR service are on a 24-hour emergency alert and should be ready for call-outs, respective, of one and two hours on each of the governor's rescue helicopters. How long such shifts are allowed to go on are also regulated by the government.

"Now we are finding that we have two sets of rules," Hendriksen said. "We want a dialogue."

Svalbardposten failed to get a response from the Ministry of Finance before the newspaper went to press on Wednesday night, but knows of several large companies expressing fears employees will quit.

One of them is LNS Spitsbergen, where 26 employees work in a 14/14 rotation. Director Frank Jakobsen emphasized employees who commute must cover that cost themselves, but that he expects more will reconsider staying in Svalbard.

"We have received indications from several that they will then consider a work-time arrangement and we will have a meeting in the near future to see if it is feasible to make a change," he said.

Is he fearing people will quit?

"Yes in the highest degree. So we can lose competence with this," Jakobsen said, continuing:

"That will obviously have to do with what the living situation each individual is in and is a calculation each individual must make."
Jakobsen said parties must see if it is possible to find plans that satisfy the requirements and at the same time be something LNSS can live with.

Large sums
The changes have long been forecast and come as no surprise to any of the companies. AF Arctic has between 60 and 65 employees at Svea, where the company is responsible for all coal transportation and infrastructure for Store Norske.

"It is certain a portion of our people are going to stop and begin on the mainland," said Project Manager Sven Jørgen Bertelsen. "We need to hire new people, but it is not easy these days because it's the very atmosphere of the industry and we can find it a little challenging."

Svalbardposten did not reach union representatives with Store Norske by press time Wednesday, but understands the organization estimates the economic impact on affected members will be between 80,000 and 110,000 kroner per year.

Ingrid Dahl, a human resources officer for Store Norske, said she believes the change may cause people to quit because they will have to pay taxes at mainland rates, but thinks the coal company will survive in the competition for labor.

"I think basically that Store Norske is going to be an attractive employer anyway," she said. "Most of them are used to paying more than 16.2 percent and we basically have good salaries as well."

Is not necessarily equally simple for a company engaged in search-and-rescues with helicopters.

Lufttransport is therefore asking the Ministry of Finance about whether the rules can be changed so the regulations currently in effect will continue. The alternative is an exemption for companies engaged in SAR services in Svalbard, where working hours are governed by the requirements of work- and rest-time regulations from the authorities' side.

"We must protect the people we have here and know that there are people who have applied for other jobs," said Hans-Arne Jensen, Lufttransport's regional director in Svalbard.


Se bildet større

CEO Stig Næsh Hendriksen has written a letter to the Finance departement where he tells he is worried about the tax changes. FOTO: Eirik Palm

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