Good Industrial Relations in the Oil Industry in the United Kingdom
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WP.230 SECTORAL ACTIVITIES PROGRAMME Working Paper Good industrial relations in the oil industry in the United Kingdom Dr. Chris Forde Dr. Rob MacKenzie Dr. Mark Stuart Dr. Rob Perrett International Labour Office Geneva 2005 Copyright International Labour Organization 2005 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to the ILO Publications Bureau (Rights and Permissions), International Labour Office, CH-1211 Geneva 22, Switzerland. The International Labour Office welcomes such applications. Libraries, institutions and other users registered in the United Kingdom with the Copyright Licensing Agency, 90 Tottenham Court Road, London WIT 4LP [Fax: (+44) (0) 207631 5500; e-mail: [email protected]], in the United States with the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923 [Fax: (+ 1) (978) 7504470; e-mail: [email protected]] or in other countries with associated Reproduction Rights Organizations, may make photocopies in accordance with the licences issued to them for this purpose. ISBN: 92-2-117254-6 (print) ISBN: 92-2-117255-4 (web pdf) First published 2005 The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International Labour Office of the opinions expressed in them. Reference to names of Firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ILO publications can be obtained through major booksellers or ILO local offices in many countries, or direct from ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland. Catalogues or lists of new publications are available free of charge from the above address. Printed by the International Labour Office, Geneva, Switzerland Preface Oil and gas are essential components of modern, industrialized civilization, and as societies and economies grow, so does their oil and gas industry. The oil and gas industry has revolutionized human lives, improving our standard of living. The industry’s products constitute building blocks at every level of production and consumption in such key sectors of economic life as petrochemicals, chemicals, agriculture, construction, manufacturing, and service industries. At present, a stable supply of oil and gas is needed to sustain continued development of our economies. The oil and gas industry is a highly capitalized industry. Much of the manual work has been replaced by automation. However, important parts of the operation still rely on human input. Stable employer-employee relations are, therefore, critical to stable production and supply of oil and gas. The aim of this paper is to explore in-depth some good practices in industrial relations and social dialogue in the oil production sector. The paper will outline essential elements for good industrial relations in the industry, including how social dialogue can contribute to healthy employer-employee relations. Among its subjects, the paper addresses positive contributions social dialogue can make towards promoting mutual respect, trust and confidence among social partners and governments in the oil industry. In its analysis, this paper focuses on how ILO standards can contribute to better industrial relations, using a good practices approach. This paper was prepared by a project team established by the Work and Employment Relations Division, Leeds University Business School, Leeds, United Kingdom. The team comprised Dr. Chris Forde, Dr. Robert MacKenzie, Dr Mark Stuart, and Dr Rob Perrett (now at Bradford University). The paper is brought out under the supervision of the ILO specialist in the oil and gas sector, Mr. Yasuhiko Kamakura. The project team is to be congratulated for its work and contributions to the improvement of industrial relations in the oil and gas industry through this very timely paper. The ILO hopes that this paper will provide an opportunity to consider how industrial relations in the industry can be improved in the interests of both decent work and greater productivity. Norman S. Jennings, Acting Director, Sectoral Activities Department WP-External-2005-10-0030-1-En.doc iii Contents Page Preface............................................................................................................................................... iii Executive summary ........................................................................................................................... vii Introduction ....................................................................................................................................... 1 1. Overall situation in the oil industry in the UK ........................................................................ 3 1.1. Introduction ................................................................................................................. 3 1.2. General situation.......................................................................................................... 3 1.3. Employment in the oil industry in the UK................................................................... 4 1.3.1. Measuring employment in the UK oil industry.................................................. 4 1.3.2. Employment trends............................................................................................. 4 1.3.3. Female workers .................................................................................................. 6 1.3.4. Union density...................................................................................................... 8 1.4. Employer and employee organizations in the UK oil industry.................................... 8 1.5. Conclusion................................................................................................................... 9 2. Conditions of work in the UK oil industry.............................................................................. 10 2.1. Introduction ................................................................................................................. 10 2.2. Wages .......................................................................................................................... 10 2.3. Working time............................................................................................................... 11 2.4. Working time in the offshore sector ............................................................................ 13 2.5. Conclusion................................................................................................................... 14 3. Industrial relations in the UK oil industry............................................................................... 15 3.1. Introduction ................................................................................................................. 15 3.2. Industrial relations in the oil refinery sector................................................................ 15 3.3. Industrial relations in the offshore oil sector ............................................................... 16 3.4. Developments in industrial relations over the past five years ..................................... 18 3.4.1. “Partnership” arrangements between unions and employers.............................. 18 3.5. Conclusion................................................................................................................... 23 4. ILO standards in the UK oil industry ...................................................................................... 24 4.1. Introduction ................................................................................................................. 24 4.2. Freedom of association................................................................................................ 24 4.3. Industrial action and the “right to strike” in the oil industry ....................................... 26 4.3.1. The right to strike in the oil sector...................................................................... 26 4.3.2. Labour disputes .................................................................................................. 26 WP-External-2005-10-0030-1-En.doc v 4.4. Collective bargaining in the oil sector ......................................................................... 27 4.5. Consultation and communication ................................................................................ 29 4.6. Conclusion................................................................................................................... 30 5. Corporate structural change and its impact upon employment and conditions of work.......... 31 5.1. Introduction.................................................................................................................