Collective Bargaining in the Offshore Catering Industry
| DOI | https://doi.org/10.1108/eb055043 |
| Pages | 8-9 |
| Published date | 01 January 1985 |
| Date | 01 January 1985 |
| Author | James M. Buchan |
| Subject Matter | HR & organizational behaviour |
Collective
Bargaining in
the Offshore
Catering
Industry*
by James M. Buchan
Research Officer,
Royal College of Nursing
Introduction
The North Sea offshore catering industry is based on the
supply of contract labour to exploration and drilling com-
panies; the employees of offshore catering companies func-
tion in a catering, stewarding, laundry and janitorial capacity
on offshore gas and oil installations. The aim of this article
is to outline the factors underlying the adoption of collec-
tive bargaining in an oil-related industry—traditionally viewed
as "anti-union"—and to examine how communications and
negotiations are conducted in an industry in which the
workforce is geographically scattered. (The use of a
"14-days-on,
14-days-off" shift system creates a situation
"The research for this article was undertaken whilst the author was a
research student at the Robert Gordon's Institute of Technology, Aberdeen.
I would like to thank Douglas Gourlay of the RGIT Business School and
William Brown for their assistance with this research.
in which, at any one time, half the employees of a catering
company are working in isolated offshore installations and
the other half are at homes dispersed throughout the United
Kingdom[1].) The data utilised were obtained as part of a
survey of industrial relations in the Grampian Region.
The Catering Companies
Five of the nine offshore catering companies operating in
the Northern sector of the North Sea were examined in the
survey which was conducted in 1982. Senior management
in each company were interviewed, utilising a structured
questionnaire, and additional information was obtained from
trade union officials. The offices of all five companies were
located in Aberdeen; the number of workers employed in
the companies varied from 295 to 400.
The Adoption of Collective Bargaining
Initially, the Aberdeen-based offshore catering companies
were opposed to trade union recognition and did not
negotiate with their employees, but within the space of a
few years in the late 1970s seven of the companies granted
recognition and negotiating rights to the Transport and
General Workers Union (TGWU) and the National Union of
Seamen (NUS). (Five of the seven companies were covered
by the survey.)
The underlying reason for the adoption of collective bargain-
ing in the offshore catering industry was the recognition,
by management in the companies, of the need to regulate
and stabilise wage rates and reduce labour turnover in a
highly competitive contract labour market in which the ratio
of labour costs to overall costs was
high.
(All five companies
included in the survey indicated that labour costs amounted
to over half of total costs.) The recognition of trade unions
and the adoption of collective bargaining as a means of
achieving stability of labour force and wage rates is a noted
characteristic of some labour-intensive industries[2].
Long hours of work in unpleasant conditions for poor pay
had created extremely high rates of labour turnover in the
offshore catering industry in the early years of North Sea
oil exploration. Two of the managers interviewed in the
course of the survey stated that labour turnover had reach-
ed levels of 150 per cent and 300 per cent per annum in
the early 1970s. However, by the time of the survey, labour
turnover had markedly decreased (to a reported level of bet-
ween 8.5 per cent and 30 per cent per annum in the five
companies), pay had increased and wage rates had
stan-
dardised.
There was general consensus amongst manage-
ment interviewees that the introduction of collective bargain-
ing had been a major factor in creating these changes. As
one manager stated: "It (the introduction of bargaining) has
unified pay scales... there's more bargaining power for the
workforce, but the situation has been cleaned up."
A factor of particular significance in causing the offshore
catering companies to adopt collective bargaining was the
pressure exerted on them by the major oil exploration and
drilling companies to standardise wage rates and, hence,
standardise contract fees. This pressure led to the founding
of the Catering Offshore Trade Association, the employers
association of the Aberdeen-based offshore catering com-
panies. (One trade union official commented that the for-
mation of COTA had been "forced" on the catering com-
8 ER 7,1 • 1985
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