ABSTRACT
While the oil and chemicals plants’ productivity objectives are a distinct, well-documented feature in the various oil refinery studies, any mention of contractors is only in passing and without any coherent theme (Flanders, 1964; Oldfield 1966; Gallie, 1978; Young, 1986; Ahlstrand, 1990), the problems of management by the clients of the contracted work are seldom mentioned in the literature despite the prevalence of contracting out of maintenance in UK industry. This chapter uncovers the employee relations implications for contractors in the engineering construction industry engaged in the repair and maintenance operations of a large UK oil refinery.
This process of contracting-out was controlled by means of a change in the industrial relations arrangements. The contracting firms benefited from their client’s strategy of increasing productivity through ‘numerical flexibility’, which culminated in the transfer of more work and of many of the client’s maintenance workers to the contractor firms.
To increase managerial control of this work, a ‘single union agreement’ (SUA) was devised for the contractors’ workforces, by which route the other unions were derecognised. This agreement was imported from other industries, re-written by the client management and then imposed on the contractors in an attempt to change the endemic culture on the refinery site. The National Agreement for Engineering Construction (NAECI) was considered and rejected, as it did not serve this purpose. The client refinery thus created a controversial industry ‘first’, which was copied by two other refiners, and which indirectly led to changes in the NAECI.
This change is analysed under the frameworks of transaction cost economics (TCE), and institutional theory, with its notions of ‘isomorphism’ or ‘industry recipes’.
The critical discourse of efficiency, it will be argued, is based in the first instance on managerial ideology, followed by, where possible, measurable data. In its absence, under conditions of uncertainty and complexity, firms259 seek to copy the strategies of others, creating ‘isomorphism’ or ‘industry recipes’.
Implications for the wider construction industry are then discussed.
