An “expectation gap” between workers and employers mean offshore strikes – a feature of the North Sea of late – are likely to linger for some time.
Fiona Herrell, a partner in the employment team at Brodies, says the legal firm has “seen a significant increase” in disputes between companies and trade unions in recent months.
And she “strongly suspects” that to continue unless a gap can be bridged between workers, concerned about inflation, and employers, worried about rising costs.
Various sectors of the UK economy have been subject to industrial action in recent months, as workers demand higher wages to ease the cost-of-living bite.
Rail, refuse collection and the postal service are among those to have been impacted by strikes as unions flex their muscles.
‘Summer of discontent’
Partner at law firm Burness Paull, Tricia Walker, said: “Some commentators have suggested recently that the unions are looking to unite workers in encouraging strike action across various different sectors, often referring to it as a ‘summer of discontent’.
“Some believe that the only way to achieve the level of pay rises desired is to take action and down tools.”
Energy companies reporting bumper profits for the first half of the year has simply served to fuel the fire of indignation felt by many workers.
Ms Walker said: “Rishi Sunak warned against employers imposing large pay increases, for fear it would fuel greater inflation.
“However, when employees are feeling the pinch, and in Aberdeen particularly where energy businesses are often reported to be making large profits, it is perhaps inevitable that the demands for pay rises will increase.”
Unions pushing for wealth distribution
Ms Herrell said: “In the longer term, as output prices in the energy sector increase and some companies in the sector report increased profits, we anticipate workers in the offshore energy sector and their trade unions pushing hard for more of that wealth to be distributed to workers.”
Much of Europe is suffering from an energy shortage currently, leading to higher commodity prices and spiralling household bills.
And there are fears that the issue could worsen if strikes hamper the flow of North Sea oil and gas.
Ms Herrel said: “If industrial action within the offshore energy sector continues, and the number of workers participating grows, then depending on the roles of the workers involved, it could impact on North Sea production levels.”
More wildcat strikes rumoured
Rumours are currently circulating that some contractors are preparing to stage a wildcat walkout next week in opposition to the current Energy Services Agreement (ESA) settlement.
The collective bargaining agreement sets base terms and conditions for thousands of employees working offshore in the UK, taking into account inflation and average oil and gas prices.
Workers engaged in wildcat strikes earlier this year, and Ms Walker says those who take part it unofficial action play a dangerous game.
She said: “Employees who engage in ‘wildcat’ strikes take the risk that they may be disciplined or dismissed for doing so as legal protection is only afforded to striking employees who are doing so with the backing of a trade union.”
Skills shortage gives workers more bargaining power
With the beast of inflation stalking the UK, and little sign it will retreat any time soon, North Sea companies should settle in for a rocky ride.
Moreover, widespread predictions about an upcoming skills shortage could exacerbate unrest further.
It “will mean that workers do have more bargaining power”, said Ms Herrell, adding, “how they use that power is an important question.”
She says firms with “strong communication channels” between their workforce and trade unions have a “better chance of avoiding any disagreements escalating into industrial action”.
Ms Herrell added: “But, the right to withhold labour is clearly set out in UK law and, for most employers, it is not possible to prevent strike action from occurring if the necessary legal requirements are met.
“The offshore energy sector is heavily regulated and it is important that employers in this sector consider that regulatory framework as part of any response to a threat of strike action.”
Time to plan
One silver lining for companies is that, in most situations, they have good visibility of strikes coming down the road.
That gives employers a chance to engage with workers ahead of them downing tools, and to plan if an agreement can’t be reached.
Ms Walker said: “One of the advantages of having advance notice of proposed strike action is that it allows an employer to engage with its staff. Not all staff will agree with strike action, and staff are not compelled to participate in the strike if they do not wish to.
“Wise employers carefully engage with staff prior to any ballot, and continue to engage and communicate with staff and unions about the matters in dispute, to explain the company’s position, throughout.
“Time also allows for contingency planning. The government recently changed the law to allow business impacted by industrial action to fill the roles occupied by striking staff with agency workers.
“This is a big change, and ought to make it much easier for employers to plan ahead to minimise disruption caused by industrial action.”
Tips for employers
While it may often seem like the only option for workers, Ms Walker says that strikes “inevitably negatively impacts everyone in some way”.
One one side, staff lose out on wages; on the other, employers and customers suffer disruption.
Ms Walker said: “Ultimately, employers who listen to their staff and understand why employees are unhappy, empathise, and do what they can to ameliorate the position – where they can – will be better placed in finding or agreeing a resolution. Acrimonious disputes can lead to parties becoming entrenched, with employees and employers unwilling to compromise.”