The Press and Journal (Aberdeen and Aberdeenshire)
Wood Group plans to cut contractor rates
Aberdeen- based energy service giant Wood Group incurred the wrath of trade unions yesterday when it announced plans to cut UK contractor rates again.
The firm’s brownfield service business, Wood Group PSN, said about a third of its 600 UK-based contractors would be affected by the average 9% reduction.
It follows on from Wood Group PSN’s decision to reduce onshore contractor rates by 10% in May 2014, before crude prices started to plummet.
A further 10% cut to UK contractor rates was announced in December 2014.
The latest round of cuts prompted the Offshore Coordinating Group (OCG) to warn that workers’ safety was being put at risk.
OCG is an alliance of five trade unions that was formed to “lead the fightback” on job losses, pay cuts, safety, and terms and conditions for workers.
A spokesman for the OCGsaid yesterday:“When we launched the group we made it clear that ongoing cuts are having a bearing on jobs, on terms and conditions, and, more importantly on safety.”
In a separate statement, Unite – which is a member of OCG, alongside RMT, GMB, Balpa and Nautilus – said the rate cuts will accelerate the “race to the bottom” in North Sea working conditions.
Unite regional officer John Boland said: “This is another blow for our members in Wood Group who have already suffered cuts to their rates of up to 20%, in the worst case examples, over the last two years.
“Our big fear is that this latest cut will spark another domino effect across offshore contractor firms, intensifying the pace of a race to the bottom on jobs, pay, skills and workingtime.
“The consequences for employment standards in the offshore sector could be dire where the future outlook is fewer employees working longer and harder for increasingly less.”
Unite was embroiled in a year-long dispute with employers, including Wood Group PSN, over changes to offshore rotas.
At one point strike action appeared to be on the cards, but an agreement was eventually hammered out.
James Crawford, managing director of Wood Group PSN in the UK and Africa, said the decision had not been taken lightly, but that sustained low oil prices had made it unavoidable.
Mr Crawford said: “Our focus and commitment remains on contributing to the industry’s long-term sustainability.
“This adjustment to the rates we pay our UK contractors ensures we continue to be competitive within the marketplace.
“We highly value our contractors and this measure will allow us to sustain our relationship with these talented people, whilst taking appropriate measures to improve efficiency and reduce cost for our customers.”