Total intervenes in Lindsey strike row as costs spiral

As its bill soars to Eu100m, Total is now encouraging its contractors to hold talks with the unions...

Last Updated: 31 Aug 2010

French group Total appears to be bowing to pressure from striking workers at its Lindsey oil refinery – it’s now ‘actively encouraging’ talks between its contractors and the union representatives of the 650 workers sacked last week. It’s obvious why: Total said in a statement that the long-running dispute at Lindsey has already cost the company €100m and left it six months behind schedule. And with more and more workers joining wildcat strikes in support of their brethren, the problem seems to be getting worse rather than better. But this does leave Total in a pretty weak negotiating position…

This row has been rumbling on since January, when workers walked out on strike in protest at the use of foreign labour. Since then, unions have been agitating for strike action if local workers didn’t get first dibs on jobs (thanks partly to Gordon Brown’s daft/ illegal ‘British jobs for British workers’ slogan). The latest flashpoint came when 51 workers were made redundant but not allowed to apply for vacant jobs with another subcontractor; when workers walked out in protest, 647 of them promptly got the sack. But this just made things worse: the workers have refused to budge, and some 3,000 of their brethren have now gone on strike in their support across the UK.

All in all, Total said, the delays, underperformance and low productivity on the Lindsey £200m hydro-desulphurisation project have already cost it a whopping €100m. And the problem isn’t going away: yesterday the sacked workers were burning their dismissal letters outside the refinery, and wildcat strikes were spreading across the country. So you can see why the French group has ‘changed its position’ (according to union Unite) and started pressing for a solution. Technically Total doesn’t employ these people – they work for the nine subcontractors that ituses to deliver the work on site – but its intervention will clearly carry a lot of weight.

The problem will be that the unions now have Total over a barrel (so to speak). The likes of Unite and GMB – which hadn’t supported the unofficial strikes, until the workers got the boot – are now on the offensive, insisting that the dispute won’t be resolved until all 647 workers are given their jobs back. That will be a fairly humiliating climb-down for the refinery bosses.

And the longer-term worry is whether this will affect the UK’s reputation as a place to do business. Total muttered darkly today that ‘further cost overruns will jeopardise the future viability of this important inward investment into the UK’. Of course it would say that - but it's true that this has proved to be a very expensive headache, and you wouldn’t be surprised if in future, Total decides to avoid running projects in the UK wherever possible. The unions appear to have won this battle, but they might yet lose the war...

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