A dispute over the transfer of offshore jobs has important implications for employment rights, says NICOLA GRAY
An employment tribunal case centred on the oil and gas sector which has recently risen in prominence has shone a light on the complexities around UK employment law as it relates to offshore workers and, depending on the outcome, could have important repercussions for both companies and employees in that sector.
UK and Norwegian unions, RMT and IE respectively, are taking Stena Drilling to a tribunal in a case which relates to substantial redundancies on a North Sea rig back in 2018.
In short, the Stena Don platform was originally situated in Norway. However, following negotiations with another company, Total, it was moved to the West of Scotland. Just recently it entered into a contract with Petrofac with a view to situating it near Shetland.
On moving from Norway to the West of Scotland, Stena dismissed the crew, with some remaining to work with Total. The remaining workforce, 38 out of 180, were put on new contracts with Stena Drilling UK division. The consequence of this is that when they were later dismissed they were not entitled to the same level of redundancy payment or notice as they would have been had their previous contracts transferred from one Stena division to another.
The trade unions argue that the change of employment contract amounted to a transfer protected by TUPE (The Transfer of Undertakings (Protection of Employment) Regulations 2006) so that they should have had continuity of employment.
The CEO of Stena Drilling has rejected the claims made by the unions and Stena is defending the actions, saying it believes it has acted in accordance with both UK and Norwegian legislation.
The outcome of this case is of critical importance for the sector, particularly as it will likely set a precedent relating to the employment rights of offshore workers. It is also worth noting that, despite the decades of oil and gas production in the North Sea, this is the first time the RMT and IE have formally joined forces.
As it stands, there is currently very little case law on issues around offshore working and TUPE so any judgement will be extremely useful in providing clarity on the legal position in what remains a significant and important industry for Scotland and the UK.
TUPE applies if an undertaking is situated in the UK immediately before the transfer, even if the staff ordinarily work offshore. The UKCS is not the UK for TUPE purposes (beyond the 12 mile territorial limit).
There is no escaping the fact that employment law can be an exceptionally complex area for businesses to navigate and given we are not just dealing with supply chains or machines, but people’s lives, great care and sensitivity needs to form a critical part of any decision making process.
Ultimately, employers need to seriously consider the legal implications before terminating contracts of employment, especially those which involve TUPE considerations.
Specifically, employers must refrain from ending or changing employees’ contracts of employment when TUPE applies.
Given the current difficult environment for businesses, with government support beginning to tail off, it is expected that we will see more examples of firms looking to reduce costs, in many cases through changing contracts or redundancies or both. TUPE or not TUPE might well be the biggest question of all.
Nicola Gray is a partner in employment law at Aberdein Considine