Offshore workers and their holiday rights are a hot topic in the oil and gas industries. Those of you who read our firm's employment e-bulletin updates will be aware that the Aberdeen employment tribunal is currently dealing with a case concerning the holiday rights of offshore workers. Offshore employers have recently announced that they are to appeal the employment tribunal's preliminary decision issued in July this year, which held that the Working Time Regulations could be applied to offshore workers.
The Working Time Regulations, which implement the Working Time Directive in the UK, came into force in 1998 and provide UK workers with the right to 4 weeks' paid annual leave as well as other rights in respect of working hours and rest breaks.
In June 2004, a challenge was made by Trade Unions on behalf of nearly 300 offshore workers, who typically work two weeks on / two weeks off, arguing that they were entitled to receive 4 weeks' paid leave under Regulation 13 in addition to their rostered time off.
The oil and gas companies involved contend that the Regulations do not apply throughout the North Sea and that, in any event, the current shift pattern already meets the requirement of the Regulations, as workers can take their holidays during their time at home. Trade unions representing the workers argue that the two week blocks are essential rest periods and that the situation is akin to asking someone working a standard 9-5 week to take all their holidays at weekends.
The preliminary hearing, related only to the issue of jurisdiction. The tribunal had to consider whether or not the Regulations apply to those employed outwith UK "territorial waters" (i.e. installations that are more than 12 miles offshore). Despite arguments to the contrary by employers in the oil and gas sector, the Aberdeen tribunal ruled the Regulations do apply to installations outside British territorial waters and apply to offshore work performed in the UK sector of the continental shelf (UKCS). The claims should now proceed to a full hearing to determine whether the holiday arrangements in place comply with the Regulations.
Oil companies involved are now appealing the Tribunal's decision on eight different grounds, including the argument that the Regulations do not apply to offshore work on the UKCS.
Offshore employers argue that the ramifications of giving workers an extra four weeks holiday could have serious adverse effects on the industry, with additional direct costs of approximately £200million a year and requiring an additional 1500 staff. Given the forecasted skills shortage in the UK's oil and gas sector, this could be cause for even greater concern within the industry. However, the Unions strongly reject these claims and say that Talisman Energy, which has put in place new shift patterns which accommodate employees' statutory holiday entitlement, maintains that the changes required are "cost neutral" overall.
The ruling and its appeal represent only the first hurdle in relation to the employees' claim with their full case still to be heard. With the dispute still in its preliminary stage there is still a long road ahead for both sides, before any final decision will be made on the matter.