Unions examine industrial relations in petroleum products industry

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In February 2001, Greek trade unions held a seminar on "industrial relations, restructuring and mergers in the petroleum products marketing industry". Here we summarise the findings of a series of studies on new technologies, flexible forms of employment and changes in work organisation in the industry, presented at the seminar, along with the positions and proposals of the industry's unions.

On 22 February 2001, a seminar was held on the subject of "industrial relations, restructuring and mergers in the petroleum products marketing industry". The seminar was organised by the sectoral Institute of Labour (INE) for the oil and chemicals Industries, the Greek General Confederation of Labour (GSEE) and the Panhellenic Federation of Petroleum Products Refineries and Chemical Industries Workers (POEPDXV) (GR0003166F). At the event, the results of a series of studies on new technologies, flexible forms of employment and changes in work organisation in the petroleum industry were presented, as were the positions and proposals of the industry's unions on this issue. The research and the unions' views are summarised below

Developments in the industry

A series of studies carried out by the sectoral INE for the oil and chemicals industries, in collaboration with Panteion University, has found that the petroleumn industry has experienced very rapid technological development, new corporate policies and new systems of management, accompanied by flexible forms of employment. Through such forms of employment, it is claimed, enterprises have ensured:

• the ability to adapt the number of workers to fluctuations in demand, not subject to legal limits (numerical flexibility);

• the ability to circumvent the institutional arrangements regulating pay and social insurance rights (pay and labour cost flexibility); and

• relative ease of adaptation of workers' occupational skills to the tasks imposed by the changing volume of production, methods of protection and technology (operational flexibility).

For workers, however, the companies' new practices have caused job insecurity, a reduction in wage and social insurance rights, a greater workload and worsening conditions of employment, according to the research.

The result is that a permanent "core" of workers has come into being in the large enterprises in the industry, which is strong but increasingly small numerically. On the other hand, there is a tendency towards the formation of a large workforce employed in the "broad periphery" of the industry, whose numbers appear to be increasing significantly. This peripheral group includes people employed under part-time or fixed-term contracts, as well as workers formally not a part of companies' workforces, such as subcontractors' personnel or temporary workers employed under "loan contracts" (through the system of hiring through third parties). Although they may work for Shell or BP, such workers usually receive lower pay than that provided for in the relevant sectoral collective agreement, and have fewer rights than those enjoyed by the permanent core of workers employed as full subordinate employees of the companies under open-ended contracts.

Industrial relations

The INE/Panteion University studies claim that multinational companies in the petroleum industry promote cooperation with their own core employees on open-ended contracts, rather than "blatant coercion and repression". Permanent staff are obliged consistently to implement the instructions of management and accept any changes in working methods aimed at increasing their productivity, along with changes in duties and jobs. According to surveys of the workers concerned, in exchange for accepting this approach, they receive a share of the "profits" gained from productivity - in the form of relatively good pay, full social insurance coverage, productivity bonuses, additional medical care plans, life and accident insurance, and pre-retirement and retirement plans. They also have the possibility of career advancement within the enterprise. The researchers claim that subcontracting and the system of hiring through third parties operate as additional elements in the "coercion" of the "permanent" core of workers, resulting in full acceptance of changes in the content of work, additional workloads and work intensification.

The development of subcontracting in large sections of the petroleum products industry has not only resulted in fewer employees in the main companies but has also had adverse consequences for workers, it is claimed. In this way, enterprises succeed in doing away with the institutional arrangements regulating the terms and conditions of employment. Although workers transferred to new employers through subcontracting manage in the initial stages to safeguard their labour rights, say the studies, they have no guarantee that this will continue in the future, since initial agreements are often violated through the practice of successive transfers. This is mainly due to the fact that workers being shifted to contractors cannot as a rule defend themselves, because of adverse conditions (high levels of unemployment), and are forced to remain in undeclared employment. On the one hand, they cannot join the petroleum products trade unions, since these organisations do not have the right to accept members from outside the industry. On the other hand, it is claimed, out of fear of dismissals these same workers fail to create their own unions.

With regard to the hiring-out of labour, in the current period the "peripheral army of workers" is increasing at a faster and faster rate, in the framework of flexibility in enterprises, according to the research. This is due to the usual practice of petroleum products companies that engage staff through third parties or through the "hiring-out of labour". In this way, the companies can employ staff at a relatively lower cost, for as long as they want, without being subject to any legal restrictions with regard to the conditions and length of employment. They can do so provided that employees who are hired out are not covered by the terms of the collective agreement for the petroleum industry but by those of the intersectoral National General Collective Labour Agreement (GR0006175N)(or possibly by another general occupation-based agreement) and fall under a different social insurance carrier, as far as supplementary insurance is concerned.

Therefore, it is stated, the increasing tendency to assign work to third parties associated with occupations that are not very strong within the organisational hierarchy, together with new corporate hiring policies (ie hiring-out of labour), are contributing to the creation of a growing peripheral group of workers. These are workers who are transferred to and employed by contractors, and workers employed under loan contracts. They constitute a lower-paid workforce that appears to be constantly at risk of exclusion from the labour market, the researchers found.

This new order is helping to disrupt industrial relations, claim the researchers. For the multinationals, the benefits are said to be numerous: a reduction in the cost of renewing the workforce; adaptation of the labour force to fluctuations in demand; elimination of the institutional constraints governing employment, and particularly the issues of dismissals and payment of compensation; and a decline in trade union protection for a segment of the workforce.

The researchers conclude, therefore, that it is clear that the new policies of the multinational groups in the petroleum sector promote flexible employment schemes (such as hiring out of labour and the assignment of the work of whole departments to third parties). This achieves flexibility in wages and labour costs as well as in the rate of employment.

The trade unions' position

POEPDXV, along with the Association of Petroleum Products and Liquid Gas Company Employees (SYEPY), believes that workers in the petroleum industry are now confronted with a multiplicity of complex problems arising from restructuring, mergers, acquisitions and organisational changes in companies. The unions are of the opinion that these changes lack a dimension of growth and positive future prospects; rather they effectively restrict competition and operate counter to the interests of society. This has adverse effects on employment and industrial relations, a belief supported by the findings of the studies outlined above.

Although Greece's legislative framework (Law 2469/1997 regarding the "limitation and improvement of the effectiveness of state spending and other provisions" and Presidential Decree 572/1988 regarding "protection of workers' rights in the case of transfer of enterprises, their installations or parts thereof") provides for the safeguarding of workers' rights in company restructuring, the unions believe that in practice this framework is a tool for facilitating anti-labour practices. They believe that the trade union movement must first discover the real causes and effects of such business decisions and then draw up a strategy to identify what are seen as very serious legislative shortcomings at the national and EU levels. This should involve demanding and enforcing measures which:

• guarantee sustainable economic development and the ability to react to changes in a flexible manner.

• safeguard jobs in all organisational changes in companies; and

• guarantee the implementation without discrimination of labour and social insurance legislation.

Social insurance and labour law should be examined, after consultation with workers' representative organisations, in order to determine whether:

• workers' jobs and proper working conditions are safeguarded;

• the necessary measures are taken for social protection of all workers; and

• full, productive and freely chosen employment is promoted.

The unions believe that measures should be adopted, following consultation, to create and develop a corporate culture favouring: initiative; productivity; awareness of environmental issues; health and safety at work; quality of life; social protection; equality between men and women; building skills through education and training; and good professional relations. Improved conditions and quality of work should be promoted, contributing to increased productivity and a better quality of life. Finally, innovation, technological development and modernisation should be promoted, along with training and human resource management and good relations between employers and workers.

In the view of POEPDXV, the positions of the trade unions in the petroleum sector are clear, and have been stated in seminars dealing with the subject, as well as in bilateral meetings with employers. The union regards the long-standing trade union call for a social protocol on protection of trade union and social rights to be made an integral part of the Energy Charter Treaty (agreed in 1991 by 49 countries from Europe and the former Soviet Union), as a key demand of the international trade union movement in the energy sector, which would safeguard workers from the consequences of rampant privatisations, restructuring and mergers.

Commentary

The petroleum products sector is of particular interest in terms of the content of industrial relations. The growing phenomenon of mergers and acquisitions in the sector, plus the strong presence of multinational companies which have introduced new work organisation systems focused on flexibility, have created new conditions in the labour market. Moreover, the growth of flexibility, and especially internal flexibility, is creating serious problems in the content of industrial relations, mainly expressed through the growth of the phenomenon of a "multi-speed" workforce (divided between core and periphery). (Giannis Kouzis, INE/GSEE-ADEDY)