Eight of the country's largest m&e employers are making long-awaited changes to employment conditions and industrial relations procedures.
The M&E sector is entering a new phase of employment relations as large employers seek to organise their workforces in a way that, they say, better suits the nature of modern contracting.

Eight of the industry's largest employers are consulting with their workers and the main trade union to set aside the existing five separate working rule agreements, which have been developed since the 1960s, in favour of a single, harmonised agreement. They believe that existing arrangements no longer reflect the more integrated and multi-skilled nature of modern building engineering services projects.

Each of the existing agreements has to be negotiated separately and, according to the employers, this reinforces divisions between the traditional 'trades' that no longer apply. Projects are no longer broken down into such strict disciplines and the industry needs a modern integrated framework in order to remain competitive.

Developed by the HVCA

The Building Engineering Services National Agreement (BESNA), which has been developed on behalf of the companies by the HVCA, is designed to harmonise operatives' pay and terms and conditions of employment across all three disciplines - for those companies that adopt it. The eight firms are in the process of proposing it to their collective workforce of around 6,000 mechanical, electrical and plumbing operatives.

Currently, NG Bailey, Balfour Beatty Engineering Services, T Clarke, Crown House Technologies, Gratte Brothers, MJN Colston, Shepherd Engineering Services and SPIE Matthew Hall are adopting the new terms, but others are expected to adopt the agreement in due course.

'We desperately need a modern, integrated workforce agreement that reflects today's working practices,' said John Moore, managing director of Balfour Beatty Engineering Services. 'We have waited a long time for this and firmly believe it is in everyone's best interests.

'There will be no pay cuts and most of our employees will benefit from the changes. None of them will be out of work - in fact, we see the new agreement as crucial to our attempts to maintain current levels of direct employment across the m&e industry.'

Pay rates of electrical operatives will be unchanged, but mechanical and plumbing rates will be standardised in line with these rates to create a more integrated and fair system, say the eight firms. Under the BESNA, operatives will continue to be directly employed; rates of pay will be standardised across the workforce; there are no planned redundancies as a direct result of the agreement; many operatives will enjoy improved terms and conditions; and existing pensions and welfare benefits will be maintained.

The existing agreements will remain in place for those employers wishing to use them although it is expected that, over time, as more building engineering services contractors develop multi-disciplined workforces, they will adopt the new BESNA.

The major contractors are concerned that without a streamlined agreement it will be hard for UK employers to remain competitive with the long-term result that more projects will have to be completed by agency labour.

However, the trade union Unite has accused the employers of trying to cut rates of pay and put semi-skilled workers into skilled jobs to reduce costs. It has also accused the firms of trying to bully their workers into accepting the new terms by threatening to dismiss them if they refuse to sign.

'Absolutely untrue,' said Blane Judd, chief executive of the HVCA. 'The companies currently employ 6,000 workers between them and they need 6,000 to help them deliver current and future projects - potentially more. There are no planned redundancies as a direct result of the introduction of the agreement.

'Also, no existing roles will be downgraded through this process,' he added. 'The industry is trying to develop a multi-skilled and flexible workforce able to cope with the new technical challenges we all face - using semi-skilled workers couldn't be further from their thoughts.'

The contractors have issued notifications of potential dismissal, but this is a legal requirement due to their intention to change contract conditions of workers. An 'installer grade' is included in the new agreement, but this already exists in the HVCA working rule agreement and the employers deny it is, in any way, a semi-skilled role.

The eight firms have also guaranteed that all pensions and welfare benefits will be maintained at their current levels. However, because they are attempting to create a more multi-skilled workforce, they recognise that further training and career development will be needed for many of the existing operatives so a complementary training and apprenticeship programme is being developed alongside the agreement.

'It is impossible to guarantee that the same 6,000 workers will emerge out of the process at the end,' said Mr Judd. 'The eight need 6,000 skilled operatives and their intention is that those they currently employ will remain, but it could be that in the process of modernising and upskilling some will decide to move on. That would be their decision.

No reduction in job numbers

'There will no reduction in job numbers as a direct result of this agreement,' said Mr Judd. 'Every worker is being offered their current job under the new terms. The industry needs all the operatives it has now, but we also need those jobs to be under the new terms for those operatives' employers to be competitive and for us to meet our quality and sustainability goals as an industry.'

The major contractors and the HVCA started discussions with Unite in March and formal negotiations began in April, but Unite walked out of negotiations at the beginning of the second meeting.

The eight firms decided, however, to go ahead as planned and launched a formal consultation process with their workers and the union in early September. They aim to have the new agreement in place by March 2012.

'The Government's Construction Strategy calls for greater use of integrated teams able to provide a complete design/manufacture/install service that speeds up the delivery of projects, cuts costs and improves sustainability,' said Mr Judd. 'The BESNA is a vital component of the strategy for creating a workforce capable of meeting these demands.'

The contractors were, at least partly, inspired by the aspirations of Chief Construction Adviser Paul Morrell, who called on the industry to modernise its methods of working and the way its trade operatives are organised. As a result of Mr Morrell's work, the Government's planned Construction Strategy includes the requirement for integrated teams to become mandatory on all public sector projects. Many m&e firms recognise that they will have to re-organise if they want to remain on tender lists.

'Our clients now increasingly expect us to provide flexible, integrated teams capable of working on a 'design/manufacture/install' approach,' said Mr Moore. 'They are looking to speed up delivery and dramatically improve value for money. We are proactively responding to their requirements because to do otherwise would be economic suicide.'

Some instances of industrial unrest around projects being undertaken by the eight firms have been reported. However, the numbers involved have been small and the eight remain undaunted.

'We have always kept Unite informed of our plans,' said Mr Judd. 'And the employers' door remains open to them - we hope to see them back around the negotiating table soon. But we cannot allow this process to be derailed - modernising is critical to the future prosperity of everyone in our industry. That is non-negotiable...some of the details we can work on.'

Mr Judd confirmed that the HVCA was continually seeking talks with Unite, but asserted that change was inevitable.

'It is, frankly, crazy in this day and age that three operatives could be travelling in the same van, to the same site, to carry out work on the same job, but all be on different hourly rates; different travel allowances; plus different holiday and sick pay entitlements,' he said.

'In line with the necessity of providing properly integrated teams, as highlighted by the Government's Construction Strategy, the industry needs a modern, integrated employment framework with common criteria for engagement. We, as employers and the employers' trade body, simply have to deliver it.'

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