Page last updated at 15:45 GMT, Wednesday, 4 February 2009

Q&A: What is the dispute about?

Unions recommend that workers protesting over foreign labour at the Lindsey Oil Refinery in North Lincolnshire go back to work, after an improved offer to recruit British workers was tabled. So what is the new deal and what is the background to the dispute?

How does the new deal help British workers?

Protestors outside Aberthaw
Protests have been held across the UK

The deal, in which the arbitration service Acas appears to have been a major player, offers 101 jobs for British workers out of a disputed 198, for a "minimum of nine weeks".

Unite puts the figure at 102, for work ongoing until 31 May, and says new workers will be recruited immediately.

The GMB union wants confirmation that a precise offer will be put in writing.

Either way, these jobs will be newly created, and no foreign workers will be forced out.

As a result of the emerging deal, unions are now recommending that the workers currently striking in protest at the use of foreign labour go back to their jobs.

It is also important that no foreign workers called up to work on the site will lose out, since that would have led to a row about protectionism and may also have breached EU employment law.

What is the dispute about?

The current row first flared up on 28 January and two days later had escalated into mass sympathy protests across the UK.

It centred on a contract to extend the diesel refining capacity at a refinery owned by oil giant Total in North Lincolnshire.

That contract was awarded to the California-based engineering group Jacobs in June 2006 with a completion date of 2009.

Jacobs, in turn, subcontracted to an Italian firm, IREM, after a tender process in which five UK and two European contractors responded.

The terms of the contract specified that IREM would be using its existing permanent Italian and Portuguese workforce for the job.

British workers and their unions were unhappy.

They felt this was the latest development in a chain of key infrastructure projects, at power stations and oil refineries across the UK, being subcontracted to foreign workers.

They are concerned that UK workers are being denied the right to carry out the work.

During a recession the sight of foreign workers carrying out such work is proving inflammatory to some, especially when they believe that suitably qualified unemployed UK contractors are available.

Have any UK workers lost their jobs at Lindsey?

Total has said that there will be no direct redundancies as a result of this contract being awarded to IREM.

It has also said that all IREM staff will be paid the same as the existing contractors working on the project.

There are around 100 Italians and Portuguese on the new project, with a further 300 to come.

In its defence, Total explained last Friday that up to 1,000 workers employed from the local community had already been working on the project for 18 months.

And the deal brokered by the unions on Wednesday creates an opportunity for British workers to also be involved in the expansion process.

Why were the jobs given to foreign workers?

We cannot be sure without seeing the contracts, which are confidential.

In a similar case involving the construction of the Staythorpe power station in Nottinghamshire, the main contractor, Alsthom, has brought in Spanish sub-contractors to carry out key work involved in installing the boiler and turbine.

It is believed one of these subcontractors has its own labour force for the work, which is specialised. In such a case, the subcontractor prefers to use its own staff.

Do the unions have a legal case for challenging the recruitment of foreign workers?

A core principle of EU law is that the UK broadly accepts the right of nationals of other member states automatically to live and work in Britain.

So it is difficult to see how anyone can challenge the right of a foreign company to bring in people from overseas to work here.

Furthermore, a legal verdict in 2007 appeared to sanction the right of a company using foreign labour for work in another EU country not to observe local pay rates.

In 2004, a Latvian company building a school in Sweden brought in workers from its own country to do the job and paid them what they would have got if the project was in Latvia.

Swedish unions said this discriminated against Swedish workers and forced the project's closure.

But the EU's highest court found against the unions, concluding their actions violated the "public interest" of workers.

However, the Unite union believes it could be illegal for companies to exclude UK workers from even being considered for job vacancies, which it claims has happened during this dispute.

What are the broader implications?

The dispute has rapidly assumed a political dimension because the behaviour of the contractors appears to fly in the face of Gordon Brown's stated aim from 2007 to create "British jobs for British workers".

A government spokesman said that, while the PM did not regret making that statement, the government would be speaking to the industry to ensure it does all it can to support the UK economy.

The issue has also assumed wider significance because the UK's ageing power stations system is in urgent need of an overhaul.

Unite estimates that 60% of our power stations will have to be replaced in the next few years. It wants to take steps now to prevent future work being awarded to firms which will bring in foreign workers.

How many EU nationals work in the UK and vice-versa?

The number of EU nationals working in the UK substantially outnumbers those British citizens earning their livelihoods abroad.

In the final quarter of 2008, there were 1.1 million EU nationals working in the UK, compared with 290,000 UK citizens working across the EU.

However, the European Commission maintains there is not a "one-way street" when it comes to employment patterns.

It points out that, in 2006, the number of UK staff posted to the continent by their employers outnumbered those moving in the opposite direction by about 10,000.

Are the protests legal?

Any strikes called without a ballot and proper notification are counter to employment law and hence illegal.

However, the unions say these walk-outs have been spontaneous and unofficial. So they stress that while they sympathise with the strikes, they cannot support the stoppages.

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