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Statement on industrial action at Lindsey Refinery Business Secretary Lord Mandelson

DEPARTMENT FOR BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2009/18) issued by COI News Distribution Service. 2 February 2009

Your Lordships, with permission I would like to make a statement about the current industrial action at the Lindsey refinery and elsewhere in the country.

On Thursday and Friday last week, contract workers at the Lindsey refinery in North Lincolnshire and elsewhere took part in unofficial industrial action. This has been followed today with further such action at Sellafield power station and other sites around the UK.

The stated reason for such action is said to be because a contract awarded at the Lindsey site to an Italian contractor, IREM, has resulted in discrimination against British workers through the exclusive employment of Italian and Portuguese workers.

On the Lindsey site, the great majority of the workers are British.

All the striking workers, I understand, are from maintenance or enhancement projects on the sites; and as of this afternoon there is no disruption of production at any of the sites where this unofficial industrial action is taking place.

On Friday my Department asked ACAS, the independent arbitration service, to meet the employers and the unions to examine the various accusations being aired and to establish the facts. We expect their report very quickly.

ACAS were in touch with the parties over the weekend and I understand the first meeting is taking place today. ACAS's first responsibility is to report to us on whether laws have been broken. If they have we will take action.

We are determined to see robust enforcement of the employment rights legislated for by this Parliament, and fair and proper application of the European rules which govern the operation of companies throughout the EU and the mobility of labour which has always been an intrinsic part of membership of the EU and supported by successive British Governments.

In a statement issued yesterday, the energy company Total which runs the Lindsey site said that, "It has never been, and never will be, the policy of Total to discriminate against British companies or British workers." It went on to say that it sub-contracts on a fair and non-discriminatory basis and that the wage rates are the same as for equivalent jobs on the site.

Two key accusations have been made in recent days. The first is that the use of labour from overseas leads to an erosion of wages and conditions for all concerned because these workers are paid less than UK workers.
The second is that there is discrimination in recruitment practice against British workers.

The statement issued by Total last night confirmed that workers from overseas are paid at the same rate as other workers on site.

And it further confirmed that they do not operate any policy of discrimination with regard to tendering or recruitment. The same rules apply here as they do with UK companies bidding for work overseas - and I would remind the House that there are 300,000 UK companies operating elsewhere in Europe.

Sub-contracts can be bid for by UK or overseas based companies. Of course, if an overseas company wins a contract they can use their permanent employees to carry out the work, but Total has confirmed that where new vacancies are advertised, they will work with sub-contractors to ensure that UK workers are considered in the same way as anyone else.
The workers coming here from Italy and Portugal are protected by the EU Posting of Workers Directive, which the UK has implemented fully. This guarantees these workers minimum standards, for example, on pay and health and safety. The Directive facilitates the free movement of services within the European Union, a vital market for British companies.

In the case of the Lindsey refinery, we have been informed that all sub-contractors adhere to the National Agreement for the Engineering Construction Industry which governs terms and conditions, working hours and pay.

Membership of the European Union, and taking advantage of the opportunities for trade presented by the EU, are firmly in the UK's national interest. Free movement of labour and the ability to work across the EU has been a condition of membership for decades.

It is important that we respect and guarantee that principle; not least because it guarantees the right of hundreds of thousands of British workers and companies to operate elsewhere in Europe. To illustrate the importance of Europe to the UK:

- half of our 370 billion pounds of exports per year go to the EU
- half of our 315 billion pounds inward investment comes from the EU
- and between 3 and 3.5 million UK jobs are linked both directly and indirectly with our trade with the EU

At a difficult economic time, we fully understand the anxieties people have about their jobs. That is why we have been taking the measures we have been to support people through these difficult times.

We strongly believe in fair opportunities for everyone in this country and in ensuring that British people have access to advertised job vacancies.

It would be quite wrong and indeed against the law for companies to advertise vacancies and exclude British people from them. Equally, it would run contrary to the principles of the single market and indeed harm British people working abroad for us to exclude foreign workers from employment in the UK.

Of course, we understand the concerns of workers at a time of economic difficulty, and we have now established a mechanism through the ACAS process to examine those concerns. It is through this strong and independent process that we should proceed, not through the continuation of the unofficial industrial action which has been taking place.

Our aim is to get through the economic difficulties we face with Britain continuing as a great trading nation, with our companies able to operate worldwide, and our workers equipped for the jobs and industries of the future.

I commend this Statement to the House.