Page last updated at 17:26 GMT, Thursday, 5 February 2009

The refinery dispute's lasting effects

Protesters at Lindsey oil refinery, 2 Feb

By John Moylan
Business correspondent, BBC News

The dispute over the use of foreign workers at the Lindsey oil refinery may be over.

But its resolution has raised concerns over the rules on employing foreign staff and has led some to warn of more troubles ahead.

For the owner of the refinery, French oil giant Total, it means work can now resume on the extension to its existing refining capacity.

The company will not put a figure on the cost of the dispute, but work was held up for more than a week. The project is due to be completed by the end of the year.

Under the terms of the deal, brokered between Total, its subcontractors and the main unions, 102 new jobs will be created and advertised locally through a subcontractor.

Total expects that the vast majority of the jobs will go to local people.

New principle?

The main unions believe the Total dispute has established the principle of fair access for UK workers to jobs on UK building projects.

They regard the sector as a key battleground, aware that the UK is embarking on several major projects, not least a new generation of nuclear power plants.

That is why on Thursday they stepped up their campaign and switched attention to the French construction giant Alstom, which is currently building three new power plants in the UK.

Meanwhile, the construction industry, which has been at the centre of the dispute, this week revised its guidance to employers.

The Engineering Construction Industry Association has updated its advice, recommending that both UK and foreign workers be given equal opportunities when it comes to advertised jobs.

Legal matters

But the resolution has left some wondering where this leaves European Union law.

Under the EU's Posted Workers Directive, foreign workers can be brought in on a temporary basis, as long as they enjoy the same rights and pay as their local counterparts.

Total and its sub-contractors were therefore working well within the law when it gave a contract to an Italian company who intended to bring in some Italian and Spanish staff to carry out the work.

Unions argue, however, these rules have long been abused, with foreign staff undercutting the pay rates of UK workers.

But it is the fact that such contracts deny UK workers the right to apply for jobs that sparked the recent protest.

There are signs that the disputes in the UK, combined with unrest seen elsewhere in Europe, may be forcing politicians and policymakers to look again at how the regulation works.

The European Commission on Wednesday night confirmed that it had commissioned studies "to better understand the impact of the directive on the ground and the consequences of European Court rulings".

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