The Offshore Contractors Association and the oil and gas industry breathed a sigh of relief on Friday, when the long awaited outcome of the trade union ballot on the latest and what was reported to be final offer on terms and conditions of employment for offshore workers, was finally approved.
This result which now meets the approval of the OCA and both unions, Unite and GMB means that the immediate threat of strike action has been removed and potentially long term damaging impact to an industry which is facing pressures from many sides.
Intense discussions and negotiations have been going on for over a year.
It has been a huge challenge to find a breakthrough which was going to meet the expectations of oil and gas companies, OCA members, trade unions, their members and all offshore workers.
The economic backdrop impacting on these negotiations also changed dramatically. In 2014, when the oil price was in excess of $100, there were indications that the industry was facing economic challenges with a spiralling cost base and the prospect of negative cash flow.
Those concerns have multiplied following a dramatic collapse in the oil price spiralling to 12 year lows.
This cocktail of pressures have put pressure on the industry to not only achieve cost savings but also efficiencies and longer term changes to working methods, all with a view to extending the life of the industry for the mutual benefit of business and workers.
A stalemate was reached in July when a unanimous vote from unions to approve the new terms failed.
The proposals maintained base rates of pay, increased aspects of holiday, standby and sick pay and, most controversially a move to equal time rotas typically 3 on/3 off.
From an industry perspective, moving to an equal time rotation achieves much needed cost efficiency by reducing the overall number of helicopter flights.
From the union and workforce side however this meant a change to the existing arrangements whereby offshore workers can insist upon 28 days of annual leave being taken from offshore time.
In addition there were genuine concerns regarding health and safety and work life balance.
A joint working party was set up to look at all of these issues facilitated by ACAS. Following upon that, the unions confirmed that their members’ concerns had been addressed and recommended they vote to accept the offer with important clarifications.
These included thorough risk assessments on all shift changes, monitoring the effects on health and safety and work life balance and allowing offshore workers to request 14 days holiday from offshore time.
This is also against a backdrop of equal time rotas being the norm in many parts of the world and indeed throughout the whole mobile drilling sector.
The consultation ballot was open until 8 January and has now been finally approved by union members.
The outcome is significant as the OCA negotiations set the tone for the industry as a whole.
Whilst these negotiations have been protracted and experienced many ups and downs, the outcome shows that meaningful dialogue involving all stakeholders is vital.
2016 is predicted to be equally as challenging for the industry but it is in everyone’s interests to work together and achieve efficiencies which ensure its longevity and attractiveness for the future.
Sean Saluja is a partner at Burness Paull and head of the firm’s employment and division
Recommended for you
