ODIA Response to Pay and Conditions Claim

ODIA RESPONSE TO PAY AND CONDITIONS CLAIM.

RMT Claim 1. A substantial pay award – recognising increased cost of living.

ODIA response; Signatories' objective is sustainability - of work and jobs. Can keep busy in the UKCS, but only if we manage things properly. We need to • Align divers’ pay rises more closely with other parts of our workforces • Manage the challenges of skills supply and labour cost control in a fair way across our workforces • Support a cost regime in the UKCS which promotes investment in new and continuing production, recognising the economic reality of the supply chain • Manage our companies in ways which recognise European and global economic uncertainty • Ensure the ODIA is, and is seen to be, a forum which gives value for the industry Some disagreement over the statistics produced at meeting on 23 Nov - The ODIA’s comparator data:

14.17% ahead of RPI 20.57% ahead of AWE (KAC3) 12.27% ahead of average O&G pay rises

The RMT rejected the OG pay rise figures, but accept the RPI and AWE below:

8.30% ahead of RPI 16.64% ahead of AWE (KAC3) 12.27% ahead of average O&G pay rises

RMT’s position that the ‘playing field was levelled’ in 2006 and even the RMT’s figures show the divers’ rises way ahead of everyone else. We want to rebalance things, bringing divers' pay rises more closely into line with others/the 'level playing field'. Accordingly, the ODIA feels the following pay offer is reasonable: Year 1 - Pay Freeze; Year 2 - 2%; Year 3 - average of RPI and AWE (KAC3) with floor and ceiling protection

RMT; don't accept the comparisons with average Oil & Gas pay. RMT say pay freeze in year 1 is not acceptable and wish clarification on the justification for the 2% offer in Year 2, and on how the floor and ceiling would work in Year 3. (See attached Appendix A for further clarification)

RMT Claim 2. Standby payment – introduce a scheme to compensate for delayed mobilisations.

1 ODIA response; No offer to be made on this Item or Item 3, on grounds of the comprehensive feasibility study conducted 2010. Reasons are (1) Standby - scheme has particular problems viz unpredictable nature of the costs, as well as the scale; (2) Extension - scheme is hugely costly to manage properly, and concerns about 'economic' decision to always pay; (3) the 'domino effect' for others; (4) Commercial - overheads already squeezed, variation clauses subject to scrutiny and challenge, clients demand a 'say'. Nothing has changed since then. Signatories' 'compromise' and current practice of 'proactively seeking of standby' is reasonable in all circumstances. Seems to be working as no negative feedback.

RMT; Disappointed but will consult members and feedback. Note that OCA increased their Standby provision this year, and all other offshore Agreements have one, so it is standard practice.

RMT Claim 3. Overcycle payment – introduce a scheme to compensate for unscheduled extensions to tours.

ODIA response; see 2 above

RMT; Same as above. We feel strongly that overcycle events can be managed with regular crew changes written into contracts, just as occurs with marine crew.

RMT Claim 4. Mobilisation (Clause 6(f)) – extend the threshold from 8am to 10am, and reword the Clause.

ODIA response; Agree to sort out ambiguities through rewording, but not prepared to move to10am. Logic leads inexorably to paying for every previous day (on basis that some people will never be able to arrive on same day as mobilisation) which is not the point of the Clause.

RMT; seeks draft of new wording on Clause 6(f) re 'between' and the alternative mobilisation point. (See attached Appendix B for further clarification)

RMT Claim 5. Next Day Payment – introduce payment when worker can’t travel home on demob day.

ODIA response; No offer to be made on this item, on basis that clients will not agree to pay, difficulties of managing claims, dealing with disagreements, explaining reasons etc. RMT; disappointed, will consult with members and feedback.

2 RMT Claim 6. Compensation for over 28 days’ Saturation (permitted only in ‘unusual and exceptional’ circumstances)

ODIA response; No offer to be made on this Item as ODIA signatory companies comply with Para 82 of the DAW Regs ACoP limiting continuous saturation exposure to 28 days, including decompression, under normal circumstances. In very exceptional circumstances, this may be extended but only subject to strict protocols for requests and approvals. Paying compensation as some kind of 'penalty' or preventative measure, is considered inappropriate.

RMT; as regards ‘Strict protocols' - our understanding is that HSE will soon have to be included in these ‘protocols’, therefore it may be the case that over 28 day events could be brought to an end. We suggest the ODIA find out more about this, we will be.

RMT Claim 7. Minimum onshore subsistence allowance (eg: when attending training) where no food is provided.

ODIA response; Signatories wish to make an offer of a minimum onshore subsistence allowance where no food is provided, in line with the HMRC 'Benchmark scale rates' scheme. The 'Two meal' (or 10 hours away from normal workplace) is £10, and would be subject to the qualifying conditions set out in the Revenue and Customs Brief 24/09

RMT; believes the HMRC guidance doesn’t reflect reality and seek a minimum of £25 per diem and an assurance that there will be no detriment for people currently receiving more with individual employers.

RMT Claim 8. Consideration of some kind of payment for attending training - a ‘Training’ day rate

ODIA response; Signatories wish to make an offer of a minimum 'training day rate' where a worker is requested by a signatory company to undertake training to meet a particular project/client requirement for a specialist skill or certificate. The minimum rate shall be 50% of normal basic day rate, excluding allowances. The payment shall not be made for training which is 'mandatory', a standard company entry requirement for the role, or is viewed as personal skills development or CPD making the worker more marketable.

RMT; need to discuss this in more detail. Val offers to share her work on categorisation. RMT will feed back on receipt. (See attached Appendix C for further details)

3 RMT Claim 9. Short Notice payment – where instructed to mobilise with fewer than 12 hours’ notice.

ODIA response; No offer to be made on this. Enquiries have not suggested any specific problems with this - it is a general point. Where this occurs, it is a genuine short-notice job, which the worker is free to accept or not. Sometimes the client may agree to pick up additional costs (and so additonal payment might be made) but ODIA cannot make this a minimum entitlement across the board.

RMT; disappointed, will consult and feedback.

RMT Claim 10. Review of ODIA job roles to evaluate significant pay differentials.

ODIA response; signatories are interested in discussing this further, but out with the 2012-15 pay negotiations, as viewed as a long-term project. The RMT claim describes a 'job evaluation' exercise ('internal comparability') which tends to produce 60/20/20 result and so any joint exercise (JE) would need to have clear terms of reference, include all ODIA roles and have the support of the broad workforce. Another option (not mutually exclusive) could be an external comparability review looking at broadly comparable roles in other disciplines. ODIA happy to discuss this further, in good faith, within the Stakeholder Forum (as an ongoing IR issue)

RMT; prepared to get involved in the JE but want to see it progressed sooner rather than later.

RMT Claim 11. Extend period of existing disablement cover for from 9-weeks to 12-weeks, plus other enhancements to insured benefits.

ODIA response; signatories keen to improve the value of the existing insured benefits package, and wish to meet the claim item in full (TTDB to increase to 84 days, over the 3 year period) AND offer to increase the level of life cover in both policies by £10k each year to £130k. Both expensive and valuable. Option of web-portal with preferred rates for optional purchase/add-ons (not connected to ODIA)

RMT; accept this as a proactive move.

RMT Claim 12. Nightshift Allowance – introduce payment for hours worked between 2300 and 0600.

ODIA response; No offer to be made on this Item. Signatories do not believe this merits additional payment in the context of the ODIA Agreement. If there are issues relating to nightshift within individual contractors, signatories wish for these to be raised with the companies direct.

4 RMT; disappointed, will consult and feedback.

RMT Claim 13. Mandatory First Aid training – incorporate attendance into annual leave entitlement.

ODIA response; Signatories wish to meet this Item in full.

RMT; accept this as a proactive change.

RMT Claim 14. 100% uplift for Queen’s Jubilee 2012 (and any additional public holidays grated subsequently).

ODIA response; No offer to be made on this item, for same reasons as for the Royal Wedding last year. Genuine difficulties with managing the granting of individual countries' public holidays to international workforce, and with the consequentials of granting for some and not others. ODIA signatories need the flexibility to adopt a company-by-company approach. Do not wish to prescribe this as an across-the-board minimum.

RMT; We propose that being within jurisdiction on the day would be the eligibility criterion.

RMT Claim 15. Passport Allowance – to cover the cost of holding second valid passport.

ODIA response; No offer to be made in respect of a first passport as signatories view this as part of essential documentation required of a day rate worker. Payment in respect of a second passport (for travel abroad) is out with ODIA geographical jurisdiction.

RMT; Signatories argument re 'essential documentation' does not stand up as we currently pay allowances for other 'essential' documentation.

RMT Claim 16. Logbook Allowance – to cover the cost of purchasing the logbook which some disciplines are obliged to maintain.

ODIA response; No offer to be made in context of ODIA Agreement and national pay negotiations, as different practices adopted by different contractors. CF the PPE Allowance - still paid although most contractors provide boots? Signatories interested in discussing how workers currently not supplied with a log book might otherwise be provided with one eg: on registering for an ODIA Competence Assessment Scheme? Wish to discuss out with pay negotiations.

5 RMT; accept proposal for ongoing discussion, though wish to progress sooner rather than later.

RMT Claim 17. PAYE – the signatory companies requested to support or not, expressly, the RMT’s campaign for bringing divers and supervisors within Schedule E.

ODIA response; This practice dates back to 1970’s when diving personnel were all truly 'nomadic'. They'd be mobilised to a vessel for a job, which would finish and they would go somewhere else. They'd be engaged on a contract by contract basis, and were genuinely 'self-employed'. Contractors did not want the burden of having to complete the formailities required of Schedule E status - endless P45s over a year etc. The industry has changed but some ODIA signatory companies still crew jobs in this way because of their particular operational needs. It is also important to note that the signatory companies don't tend to engage their workforce direct. Because of this, the signatory companies - as UK contractors - have no real locus in the PAYE debate. They will neither support nor stand in the way of change (although the labour supply companies may take a view). We wouldn't want to over-speculate about the view that they may take, but we imagine that the views would fall into 2 camps - those which supply personnel on a series of ad-hoc contracts for different jobs will struggle with PAYE; while those which supply personnel on a less discontinuous basis would be more supportive. Difficult to see how the genuine differences between operational requirements and crewing arrangements can be harmonised in order to support the RMT's reference as set out in the Claim.

RMT; Signatories history is incorrect. Practice dates back to 1976 and political decision to put Divers and Supervisors on Schedule D. Signatories concern is that ODIA personnel will be viewed as 'employees' which RMT say they already are, as set out in the cases - Sheppard v Comex, and MacIntyre v Stena.

RMT Claim 18. Tenders – concern about ALST/Tender role overlap.

ODIA response; Signatories willing to discuss concerns about the role of Tender, out with the pay negotiations. Many of these are expected to be resolved with the publication of the revised IMCA competence tables for diving job functions, which clarify that ALST tasks are not part of a Tender's role.

RMT; accept this as an ongoing exercise, want to see it progressed sooner rather than later.

6 RMT Claim 19. Concerns about the impact of Bell Diving Supervisors doing LSS duties when undertaking training in Life Support competences, and LST’s doing Gasman duties.

ODIA response; Signatories willing to discuss concerns about Trainee Bell Supervisors undertaking ALST and LST tasks as part of their training; Bell Supervisors undertaking LSS tasks, and LSTs undertaking Gasman tasks. Some concerns may be alleviated with revised IMCA tables, but also issues of practice, more appropriately considered in Stakeholder Forum (ongoing IR)

RMT; prepared to accept as an ongoing issue and want to see it progressed sooner rather than later.

RMT Claim 20. Dispute Resolution Clause – introduce one into the Agreement.

ODIA response; Signatories happy to discuss ways of supporting the integrity of the Agreement, but in ways which reflect our wish for disputes with individual contractors in general to be handled within that contractor. We acknowledge the possibility that some disputes may impact on the integrity of the Agreement itself, and so happy to discuss wording which balances these 2 aspirations. Propose side discussions as for other 'wording' changes. Signatories also wish to reconsider the RPA - in particular how we support all the new reps - clarifying roles, training etc. . RMT; members expect to see all member companies adhere to each Clause of the scheme, and where non-compliance, we expect the signatories to pull the non-complying ones into line. RMT to come back with proposed wording.

7 APPENDIX A

Rationale for 2% for Year 2

This is based on the fact that ODIA pay rises since 2006 (when the RMT agreed that the pay settlement had ‘levelled the playing field’) have been so far ahead of average earnings in the economy and even within the oil and gas industry (16.6% and 12.3%).

Our oil and gas pay statistics were taken from the 2011 Fraser of Allendar Report, and the Average Weekly Earnings (AWE) data agreed with Derek Moore. The signatories honoured the 2009-12 pay settlement, even in the most difficult of circumstances in the last 2 years when clients have raised serious objections, and when other groups of personnel within our companies perceive real unfairness. Managing the consequences of the pay settlement is our responsibility, and there is a real prospect that the industry loses respect for the work we do and the value we have within the industry.

We were open that one of our aims this time was to more closely align ODIA pay rises with those received by the rest of the industry. Hence, the pay freeze for 2012/13. There were views within the signatories that a pay freeze should be adopted for year 2 also, but the majority felt that a modest pay rise provision to acknowledge that prices and average earnings are forecast to rise into 2013. This settlement will still see ODIA pay outstripping RPI, AWE and oil and gas earnings by 2013/14, and the formula for Year 3 protects your position for the final year of the settlement.

How the proposed ‘floor’ and ‘ceiling’ might work in year 3

In the 2009-12 settlement, a ‘floor’ protected the RMT from extremes in low Retail Price Index (RPI) levels, so that you received 1.5% even when RPI was in negative figures. The signatories did not seek a ‘ceiling’ which would have had the equivalent effect – protect ODIA from extremes at the higher end of the scale. As we all know, this caused significant difficulties for us, and is why we feel that a form of protection is fair for both ‘sides’, at least while economic conditions remain so unpredictable. We have no particular view on how we do this – ultimately it might just be agreeing upper and lower settlement parameters, but we are sure there are formulae we might consider which would produce a fair solution. Your thoughts on this would be welcomed.

8 APPENDIX B

Proposed wording for Clause 6(f) Early Mobilisations

Current Wording “Where the worker is required to mobilise between midnight and 8 a.m. at a worksite (i.e. a DSV, rig, barge, etc) that is moored inshore or alongside a harbour, then he will also be paid at 100% of his normal rate of pay for the immediately preceding day.”

Proposed new wording “Where a worker is required to mobilise between midnight and 8am at the port, heliport or other place on the UK mainland, designated by a signatory company then he will be paid at 100% of his normal rate of pay for the immediately preceding day. Only mobilisations at or later than 0000 hrs and at or before 0759 hrs are included.”

9 APPENDIX C

Claim Item 8 (Training Day Rate); RMT agreed to do some more work on this, and revert. ODIA offered to share the work done on categorising the different types of ‘training’, in the hope it might help The table below sets this out (you will see that the report covers the 2 issues of ‘time to be calculated for annual leave’ and ‘types of training which could receive a minimum day rate’. ODIA suggest 4 categories of training, and the signatories feel that the third type (below) was potentially eligible for a minimum training day rate – some companies may already pay for this, but many don’t.

CATEGORIES OF TRAINING AND WORKING TIME ETC

‘Mandatory’ Company entry Company CPD / personal training – requirement for project / client skills required by law role requirement development / ACoP for specialist skill or certificate

All roles, prior Initial Subsea UK CIF to starting BOSIET / work MIST Offshore medical

Discipline- specific initial training

All roles, once BOSIET / Various in labour pool MIST refresher possibilities (3 years) 3rd party costs of attending Offshore reimbursed via medical (2 Medical, MIST years) and Offshore Survival, and Dental Certificates’ Allowances

Time not paid.

10 Time factored-in to calculation of annual leave entitlement for BOSIET, MIST and annual medical only (But proposed to include First Aid wef Nov 2012)

Divers / DATA First Aid initial Various, Various Various, ‘essential’ only training including: possibilities including:

3rd party costs of First Aid Rigging and IOSH attending refresher Lifting Managing training NORSOK Safely reimbursed via Annual Leadership IT skills DATA medical People Learning to be Management a Competence Time not paid Dental Skills’ Assessor (equivalent of 3 certificate CSWIP 3.1u training days plus one 2-hr medical per year)

Time factored-in to calculation of annual leave entitlement for BOSIET, MIST and annual medical only (But proposed to include First Aid wef Nov 2012)

CONCLUSIONS: ADDING FIRST AID TO CALCULATING HOLIDAY ENTITLEMENT

1. First Aid training probably the only other ‘mandatory training’ element to be factored into holiday element. However, this is ‘mandatory’ only for diving roles (not even Supervisors) 2. We don’t want to introduce a two-level holiday element (one for divers, and one for everyone else) so signatory companies decided to add this time to the additional holiday element of all ODIA disciplines.

11 3. Existing annual time is 8.33. Plus First Aid refresher training attendance (8 * 8 hours over 12 year period) / 12 = 5.33 hours per year. Plus 8.33 = 11.66 hours per year to be included in annual leave calculations. 4. This means 12.07% * 0.97 (11.66 / 12) * the day rate for each discipline, is the total additional rolled-up holiday pay for the year. Ie: We pro-rate that to the daily ‘additional holiday element’ based on a notional 96.6 days working figure. (Current multiplier is .69) 5. Eg: Surface Supplied Diver Basic Day Rate £283.53. Holiday element 12.07% (£34.22) Additional Holiday element (old calc) 0.69 * £283.53 = £195.64 * 12.07% = £23.61 / 96.6 = .25 per day. Additional holiday element (new calc) 0.97 * £285.53 = £325.5 * 12.07% = £33.43 / 96.6 = 0.35 per day.

CONCLUSIONS: INTRODUCING A ‘TRAINING’ DAY RATE

1. ODIA decided to make this offer for training which a Company requires a worker to undertake to meet a particular project/client requirement for specialist skill or certificate, but NOT for training which is ‘mandatory’, a standard company entry requirement for the role, or is viewed as personal skills development or CPD making the worker more marketable. 2. ODIA signatory companies agree to offer to provide a minimum of 50% of day rate, excluding allowances for such training.