Union accepts new working conditions at petrochemicals plant

In October 2013, a high-profile industrial dispute affected the Grangemouth petrochemicals plant in Scotland. The dispute, which initially centred on the treatment of the Unite union convener at the plant, was notable for its political and energy policy dimensions, as well as the controversial tactics used by site’s owners, Ineos, and the trade union, Unite. A review has been developed by the government, covering unacceptable industrial practices by both employers and unions.

Origins of the dispute

In October 2013, a high-profile industrial dispute affected the Grangemouth oil refinery and petrochemicals plant in Scotland, which is owned by the Swiss-based company, Ineos. The site employs 1,370 permanent workers and 2,000 contractors and is of considerable importance to the UK’s energy network. The dispute was notable for its political and energy policy dimensions, as well as the controversial tactics used by both the company and the union involved, Unite.

The dispute initially centred on the treatment of the Unite Union Convener at the plant. Stephen Deans was suspended by the company following claims that he had used company time for political campaigning work on behalf of a Labour Party parliamentary candidate in Falkirk, where he was Chair of the local branch of the party. In late September 2013, Unite members at the plant voted in a ballot to take industrial action over his treatment by the company. The union began a work-to-rule and overtime ban on 30 September.

On 9 October, the union met the The Minister of State for Energy, Michael Fallon, and the Deputy First Minister of Scotland, Nicola Sturgeon, to discuss the dispute. According to Unite, Ineos rejected the union’s proposal to use the Acas conciliation service and refused local union representatives time off to meet the UK energy minister. The union accused Ineos of deliberately seeking to provoke strike action.

Escalation of the dispute

On 11 October, the union gave notice of a planned 48-hour strike to be held on 20 and 21 October. On 14 October, the Grangemouth facility began shutting down ahead of the strike. The parties to the dispute finally met for talks with Acas but these ended on 16 October, with the company saying it would keep the plant shut and put its proposals to the workforce the following day. The union announced it would call off all industrial action with immediate effect, to enable the plant to return to full production.

On 17 October, the company presented the workforce with a ‘survival plan’ including significant changes to pension arrangements and other terms and conditions, indicating that, unless the employees accepted these changes by October 21, the petrochemicals plant would close permanently. The company had reportedly been trying to change employees’ working conditions since it bought the plant from British Petroleum seven years previously.

The changes sought by the company included:

  • a three-year pay freeze;
  • no strikes for three years;
  • replacing the company’s final salary pension scheme;
  • changes to union agreements on the site, including abolishing full-time union conveners.

On the advice of Unite, half of Grangemouth’s permanent employees rejected these changes by the deadline. On 23 October, to widespread consternation within the UK energy industry, and particularly in Scotland, the company announced the plant’s permanent closure.

Closure move reversed

On 24 October, following last-ditch talks involving the Unite General Secretary, Len McCluskey, the union agreed to ‘embrace’ the company’s proposals ‘warts and all’ and the move to close the plant was reversed. Mr McCluskey said that ‘the priority is to keep the plant open’. Both UK and Scottish ministers had also been involved in discussions with the company over the previous days aimed at preventing the closure of the plant.

On 25 October, Ineos Chair Jim Ratcliffe said that, following ‘assurances’ from the union, the Grangemouth facility would now reopen. He confirmed Ineos would press ahead with plans to invest GBP 300 million (€362,977,000 as at 2 December 2013) in a new gas terminal at the site.

Resignation of convenor

On 28 October, it emerged that Stephen Deans had resigned as an Ineos employee. The announcement of the outcome of Ineos’s disciplinary case against him had been expected the following day. A Unite statement said that ‘the decision of Ineos to leak details of private emails to the Sunday Times’ had been ‘the final straw’.

Review of dispute tactics

In November, Prime Minister David Cameron announced a review of the law relating to ‘inappropriate or intimidatory’ tactics used by Unite during the dispute. The intended focus of the review was union-organised protests outside the homes of senior Ineos executives, designed to provide ‘leverage’ for the union.

This led to criticism that the review was a ‘union-bashing’ exercise initiated by the Conservatives for party political reasons. Unite argued that it was the company that had resorted to intimidation and bullying by threatening to close the plant. Coalition ministers subsequently presented the review as a more balanced exercise, covering unacceptable industrial practices by both employers and unions, with the ‘blacklisting’ of union activists by employers (UK1210019I) reportedly being included in the review.

Mark Hall, IRRU, Warwick Business School

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