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Shell outsourcing at heart of pay squabble

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Outsourcing terms at heart of pay squabble

By Andrew Taylor

Published: June 14 2008 04:26 | Last updated: June 14 2008 04:26

Striking tanker drivers claim their pay has stagnated since 1992 and that the oil company is at fault. The haulage companies that actually employ them say wages have risen by 27 per cent in the past four years – twice the rate of inflation.

So who is right? Confusingly, both parties can justify their claims.

At the heart of the matter is Shell’s decision in the 1990s to outsource its tanker driver operations. The contract has changed hands several times since then, with the work currently handled by just two haulage companies: Hoyer UK and Suckling Transport.

Under employment protection rules, former Shell drivers transferring to new suppliers were entitled to keep the same pay and conditions. New drivers could be employed at different rates.

Unite, the union, says that Shell drivers in 1992 earned an average of £32,000 ($62,384) a year – the same as the current basic wage paid by Hoyer and Suckling. On that basis, the union would appear to be correct to claim that pay has stagnated.

But only one or two of the original drivers are still employed on the Shell contract.

Hoyer says that its pay rates, which last year provided average annual earnings of £36,500, are competitive with the rest of the industry and that it has no problem recruiting new drivers.

The latest two-year offer from Hoyer and Suckling would lift drivers’ average annual earnings to about £41,500. Critics say that this would be well above wages paid to firemen and other emergency service workers.

Unite says Shell’s tight lid on outsourcing contract terms has curbed drivers’ wages. However it is also easier to justify a 13 per cent pay claim by comparing this with the big bonuses won by oil company executives at a time when energy companies are being criticised for profiteering and petrol prices are rocketing.

EDITOR’S CHOICE

Shell tanker drivers’ strike begins – Jun-13

 

Copyright The Financial Times Limited 2008

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