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ER 25,6

The uncertain road to partnership

An action research perspective on new industrial relations in the UK offshore oil industry
Graeme Martin
Edinburgh Business School, Heriot Watt University, Edinburgh, UK

594
Received June 2003 Revised July 2003 Accepted July 2003

Judy Pate
Dundee Business School, University of Abertay Dundee, Dundee, UK

Phil Beaumont
School of Management, University of Glasgow, Glasgow, UK, and

Alan Murdoch
Dundee Business School, University of Abertay Dundee, Dundee, UK
Keywords Partnership, Labour, Industrial relations, Oil industry, United Kingdom Abstract This paper examines the problems involved in developing collective bargaining in the traditionally non-union environment of the strategically important UK offshore oil industry. In doing so it provides evidence on the success of the new, stakeholder industrial relations environment established by the present UK government. Drawing on an in-depth insight into management and union strategies gained from action research, the paper documents the attempt to establish a collective agreement and a partnership approach to industrial relations in the drilling sector of the North Sea offshore oil industry, a sector which has had no previous history of unionisation. In doing the research provides evidence partnership policy, the literature on union recognition and the process of negotiation in international organisations.

Employee Relations Vol. 25 No. 6, 2003 pp. 594-612 q MCB UP Limited 0142-5455 DOI 10.1108/01425450310501324

Introduction The new industrial relations, union recognition and partnership agreements During the 1990s, developments in industrial/labour relations received increasing attention in the USA and UK, following earlier commentary on the US mutual commitment models (Kochan and Osterman, 1994) and more recent discussion of partnership agreements by the UK New Labour government as a key element of their stakeholder ethos on industrial policy. Thus there was a strand of powerful and ofcial rhetoric in the UK of collaboration between employers and new model unions (Mitchell, 1998; Martinez Lucio and Stuart, 2002). Such developments towards partnership, however, rest on one of the classic pluralist nostrums of having independent partners to an agreement, and that has increasingly not been the case in the UK private sector since the highpoint of union density in the late 1970s. Thus

recognition (or re-recognition) of unions in many organisations was seen to be the rst step to partnership, which, in turn, was thought would lead to a climate of new industrial relations (IR), bringing direct benet to employers in the form of increased morale and productivity, and benets to employees in being given a voice in how they should be managed (Incomes Data Service, 1998). As an essential step along this road to new IR and as part payment to the unions for their help in gaining power, the UK Labour government passed the 1999 Employment Relations Act. It was based on the US model (Adams, 1999) and gave unions new rights to recognition. Such legislation was also associated with European Union requirements to consult on issues such as redundancy and to set up works councils in larger and international organisations. The ideas discussed in the UK Government White Paper, Fairness at Work (DTI, 1998), which set out the basis for the 1999 Act, discussed the promotion of a new culture of co-operation and partnership at work. For those employers who had no history of dealing with unions in the UK, many of which were multinational enterprises with headquarters in the USA, union recognition was seen as a doubtful benet. However, the UK union movement generally welcomed the legislation since membership, especially in the private sector, was at an all time low. As some commentators have argued, however, the legislation was infused with values and policy that attempted to cast unionism in a different light from that which it had previously been seen (Smith and Morton, 2001). These researchers quote Gordon Brown, the UK Treasury Minister and one of the principal architects of the legislation:
The government is encouraging unions to develop the opportunity of being invited to the negotiating table, rather than to develop the collective strength with which to force entry to it. In this spirit, recognition will to a considerable degree not just depend on what employers choose to offer, but also upon what unions can earn for themselves, by means of nurturing a relationship of trust with management (Brown, 1999, pp 168-9, quoted in Smith and Morton, 2001).

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Thus union recognition and the legislation brought in to assist unions in this process was seen by government as a means by which unions would change their previous behaviour of opposition and control to one of enterprise-based partnership with employers to promote a business agenda. As we have already alluded, however, there was a signicant minority of unions and academics which were also worried about the potential for incorporation of unions into employers aims (Hayes and Allen, 2001) and about the hidden agendas of employers in developing sophisticated human resource (HR) strategies (Martinez Lucio and Stuart, 2002). Such scepticism has long been a feature of the literature on unions and the development of human resource management (HRM) in the UK (Hyman, 1975; Legge, 1995) for, as Adams (1999) has argued, statutory recognition may have led to the decline of robust unionism and collective bargaining in the USA since the 1950s.

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Regardless of such scepticism, a considerable number of union recognition agreements have been signed since the legislation was introduced and partnership agreements have been concluded where unions already had some level of recognition (ACAS, 2001). There is also emerging evidence on the effectiveness of union recognition and of partnership agreements, much of it quite positive from the perspective of the parties involved. For example, following in the wake of earlier sector specic studies (e.g. Marks et al.s, (1998) work on the Scottish spirits industry), Gall (2001) examined the UK banking industry, concluding that there was an uneveness in the moves towards partnership in the sector and that while partnership did promote job security it did not exclude redundancies. Examinations of more large-scale cross-sector studies include Guest and Peccei (2001), who examined data based on 54 partnership agreements and concluded that partnership or mutual gains agreements did lead to positive benets for the key partners, but that the balance of advantages lay with management, which reected the relatively low management trust of employee representatives. Most recently, Oxenbridge and Brown (2002) assessed partnership agreements through 11 case studies across a range of sectors, nding that unions had achieved greater rights when they were involved in informal relationships, sometimes re-branded as partnerships, supported by high levels of union membership. Perspectives on the new IR One way to evaluate union recognition and the process of partnership is to draw on Guests (1995, 2001) combination of IR and HRM typologies (see Figure 1). In these papers, he pointed to four perspectives for considering the relationship between HRM philosophy and practices and IR philosophy and practices. As Guest (2001) suggests, IR activity may be thought of as high when unions and their representatives are recognised for local collective bargaining and consultation. In some cases, unions and management may have negotiated an attempt at a partnership or mutual gains agreement and there may be some kind of sophisticated works council arrangements in larger rms, while the other end of the scale is dened by no form of collective representation involving independent trade unions. On the HRM axis, HR can be thought of as high or sophisticated when there is evidence of a large number of progressive HR practices being, at least partly, integrated into the organisations business strategy, while the other end of the axis is dened by few HR policies and practices and little or no integration into organisational thinking. Organisations can thus be categorised as falling into one of the four categories of bleak houses, individualists, traditional pluralists or partners. Evidence from recent large-scale surveys (Cully et al., 1999; Millward et al., 2000), has pointed to the bulk of UK private sector companies falling into the bleak house quadrant, with little in the way of sophisticated HR and almost no

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Figure 1. Industrial relations and human resource management

union representation. Furthermore, there is also little evidence of companies falling into the partnership category (probably no more than 4 per cent of workplaces in the survey), which leads some to question the benets of partnership arrangements. Such a concern, however, is predicated on what we mean by partnership strategies, and as Guest (2001) and others (e.g. Hayes and Allen, 2001; Oxenbridge and Brown, 2002) have pointed out, it is usually associated with four commitments: (1) A recognition of some degree of employment security or work protection for employees, although this does not imply no redundancy clauses. (2) Sharing nancial and non-nancial success. (3) Widespread communications and consultation at all levels in the organisation. (4) Provision of effective and independent representation (usually, although not exclusively, through local trade union representatives). These principles, however, can be combined and enacted according to different sets of values and policy prescriptions. As Guest and Peccei (2001) have pointed out, there are at least three approaches to partnership (and by implication to union recognition), which lead employers and unions to different understandings on these issues. The rst is the pluralist perspective, which has close links to workers participation and co-determination along the lines of the legislation on the EU Social Chapter and European Works Council Directive. The second is the explicitly unitarist perspective that attempts to integrate employee interests into those of the employer through employee involvement and commitment strategies, for example, through nancial partnership policies

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and through involvement in day-to-day work activities. This perspective is strongly linked to the high commitment, high performance work systems approach of sophisticated HRM. Finally, there is a hybrid model, which combines elements of both the pluralist and unitarist perspectives, best exemplied by the mutual gains models of Kochan and Osterman (1994), in which formal union representation is seen as necessary to secure the benets of partnership and probably comes closest to what the UK government had in mind in passing the union recognition provisions in the 1999 legislation. The research questions A rst key question, then, concerns the future for the majority of UK private sector companies in the bleak house category identied by Guest (2001). Put simply, what is the future for partnership if the majority of employers fail to see the benets of union recognition as a rst step to partnership? Our case study provides some much-needed evidence of the thinking of employers in this bleak house category and how the 1999 Employment Relations Act may have affected their approaches to managing people. At the same time, it also provides evidence on how one major union in the UK has attempted to travel down the uncertain road to recognition by holding out a partnership model as a vision for the future and as a way of persuading employers of the virtues of union recognition. A second line of questioning not substantially addressed by the existing literature concerns the process of achieving partnership and the kinds of intervention necessary in assisting this process. This relates specically to the important problems of division between bargainers in IR and their constituents (Heckscher and Hall, 1994). Much of the literature on the new IR is predicated on the notion of employers and unions working together to create lasting agreements. Yet, as much of the earlier research in the eld of IR bargaining behaviour has reminded us (Walton and McKersie, 1965), employers and unions are not homogeneous bodies and often the bargainers have little power but much responsibility thrust upon them to conclude deals with ghosts at the bargaining table. This is particularly so when dealing with industry-wide problems, where no single employer has the power to dictate terms, or in situations where involving multinational companies, where power often lies outside of the country in which agreements are made. Following in the tradition of Walton and McKersies seminal work, Heckscher and Hall (1994) have analysed these issues in terms of different orders of problems inherent in the bargaining process that require different intervention strategies. They distinguished between a lower level I problem/intervention, which is best dealt with by the training of bargainers and facilitating the actual bargaining process itself, from a higher level II problem/ intervention, which requires a transformation of the, often complex, internal relationships between bargainers and their constituents. On the basis of case study evidence, developed through

action research, they formulated two relevant hypotheses, which we have adapted for our study. The rst hypothesis is that a level I intervention, whether in the form of labour relations and negotiating skills training or active facilitation of the bargaining process that aims to improve trust relations between bargainers, will tend to degenerate over time, since it does not challenge the fundamental politics of stakeholder interests. The second hypothesis is that level II changes, which effectively incorporate aims and commitment of all stakeholders, are essential for the long- term success of partnership agreements. Our case study provides a qualitative assessment of these two hypotheses in the form of an action research intervention situated in the often frustrating process of bringing about IR change in the complex environment of multi-employer bargaining where most of the employers were wholly-owned subsidiaries of non-union US multinational enterprises (MNEs). The case study The action research methodology The case study was part of a two-year action research process, which has involved the authors in facilitating managers in the offshore drilling industry in the UK North Sea oil and gas sector to achieve a recognition agreement with the Amalgamated Engineering Union (AEEU), now Amicus, one of the UKs largest industrial unions. This recognition agreement increasingly came to be seen as the rst step to a partnership model for the industry. Since 1999, two of the authors were involved as consultant researchers in the collective bargaining process with most of companies who make up the offshore drilling industry, while the other two authors conducted independent research on the project. This research comprised two phases. First, we conducted ten sets of in-depth interviews, often lasting many hours, with HR managers in the drilling companies together with ten of their senior managers, in order to: . learn about the industry; . determine the degree of sophistication of HR among the rms; and . gauge the freedom for local managers to take action in setting labour relations policy. In addition, we interviewed certain head ofce senior HR managers, mostly by telephone to get a more complete picture of the relationships between the management stakeholders. Second, we conducted an industry-wide survey of employees of the drilling companies to learn about HR problems in the industry, the state of employee perceptions of their psychological contracts, and to gauge their feelings on unionisation and representation. This survey achieved a 61 per cent average response rate from the approximately 6,000 employees of the drilling companies, ranging from 25 per cent in some of the smaller rms to 80 per cent

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in the largest organisations. Such a response rate gave the consultant researchers a high degree of condence in the results. Action research differs from conventional research in that it is intended to contribute to existing knowledge and to social action through the active involvement of the researchers and participants in the social system (Reason and Bradbury, 2001). Our approach has been one of the purest forms of case research (Gummesson, 2000; Coghlan and Brannick, 2001) in that we have involved key participants in the system in the data collection process which is aimed at understanding themselves with a view to taking developmental action, in this case negotiating their way to union recognition and the rst steps to partnership. Following the conventions of the action research cycle (Coghlan and Brannick, 2001), the rest of the paper tells the story and the outcomes as at May, 2002, reecting on the research as action researchers, reection in the light of theory, and extrapolation to a broader context for practitioners. The offshore drilling industry and its features In 1999, when our intervention and research began, the industry comprised 14 companies employing some 6,000 men and women in onshore and offshore operations. The work of the offshore drilling employees is hazardous involving working long hours in shifts and away from home. The majority of employees on the drilling rigs are semi-skilled roustabouts, supervisors and drilling technicians, most of who have worked in the industry for a number of years. Despite the contracting nature of employment conditions, some employers and many employees tend to treat the industry as a source of a traditional relational career (Rousseau, 1995) rather than as a purely transactional exchange relationship with limited job security and little career progression. Though mobility between companies was indeed a feature of employment in the industry because of the contract nature of work, many of the employers had an implicit policy of retaining good employees to benet from their tacit knowledge of particular drilling rigs (Brown, 2000). Consequently, it was common practice in the industry to offer a degree of security during slack times by standing down men for a period on limited pay until new contracts became available. Such work protection practices, however, were not common to all companies, and this became a source of differentiation among employers, from the perspective of both employees and clients, the latter of whom would sometimes foot the bill to keep good workers in the employ of drilling contractors, especially if a new contract was imminent. Traditionally these workers have also been highly compensated in relation to comparable jobs onshore, though through time the differentials had been eroded to a point where recruitment had become difcult in 2000. The UK offshore oil and gas industry as a whole has been traditionally hostile to unions and union representatives. As a consequence, among the drilling contractors, unionisation was actively discouraged and none gave any

form of recognition to the unions that had members in the industry. Following, a major disaster on the Piper Alpha oil rig in 1988, legislation for safety representation was introduced (Wright and Spaven, 1999), although this was not linked to union inuence. The system of non-union safety representation was grudgingly welcomed by the unions as a way of gaining inuence by the back door, though as Wright and Spaven (1999) have shown, they were unable to capitalise on this opportunity. In 1998, the present UK Governments White Paper Fairness at Work (DTI, 1998) was introduced with provisions to re-introduce the rights of unions to pursue recognition claims if they could be justied in terms of union membership. The drilling contractors, which operate drilling rigs on behalf of the oil and gas majors in the North Sea oil and gas elds, immediately perceived themselves to be at risk to predatory unions. This group of employers is strategically and politically important to the UK economy and has been the subject of major attention over issues such as safety following the Piper Alpha disaster. These companies have also been the object of previous union attention, principally by OILC, a non-TUC afliated union, which had slowly been recruiting members prior to the introduction of the 1998 White Paper. According to the HR managers in the industry, OILC had traditionally taken a hardline stance on IR to the employers. As such, when the employers became aware of the union recognition provisions of the White Paper, they perceived the potential threat of OILC for disruption as mission critical, especially if they were able to recruit sufcient members and gain recognition under the legislation. In essence, it was this coercive aspect of the legislation and the threat of a non-co-operative stance by OILC that provided the major impetus to change in the employers strategy on IR in the industry. Two points became clear to the consultant researchers at the beginning of the project. The rst was that none of the managers in the consortium had any experience of dealing with unions and held stereotypes of unions and their leaders largely derived from the 1970s and from the popular press. The second point concerned the nature of HRM among the companies operating in the UK North Sea. From our interviews with the HR managers and their senior colleagues, we found that practices varied, but our general view of the nature of HR was of unsophisticated paternalism. Although most companies paid signicant attention to safety, largely forced on them by their clients and government legislation, and a number employed techniques such as appraisal and performance-related pay, they could not be described as employing leading edge HR techniques. This impression of a Bleak House was supported by the evidence on backgrounds of the people employed in HR, most of whom had limited formal or professional qualications for the job and also had limited experience in HR outside of the industry. HR departments in most of the rms appeared to be run on a shoestring budget, which reected their relatively low-level status in the organization. Essentially these departments had

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traditionally performed clerk of works roles, which focused on personnel, safety and salaries administration (Tyson and Fell, 1986). US ownership of many of these companies also proved to be a signicant feature in the process of determining IR strategy. The power to make decisions on HR/IR and to bargain was heavily circumscribed in the majority of companies by head ofce senior managers and their HR superiors. Our interview phase led us to conclude that most of the US-owned companies were relatively centralised in terms of HR decision-making and were either fearful of, or hostile to, unionisation in their own country and in their UK operations. Indeed it was a frequent feature of our meetings with some of the HR staff that they had to phone back to the US for guidance or permission to make commitments, and there was little doubt that these managers had limited discretion in bargaining over union recognition. These initial positions, however, were to change throughout the process of the intervention in sometimes contradictory ways. The formation of an employers association. Although the intervention had begun during early meetings with the loose network of HR managers in the industry, the consultants actively began to help shape action rst, by recommending that they form themselves into a more formal employers association and, second, by using the data from the survey phase to advise the organisations on a collective approach to union recognition. From the interview phase, it became clear that some of the companies were much more inclined to take a collective stance on labour relations by forming an industry employers association. This was preferred so that they gained from strength in numbers and so they could present a united front in dealings with any labour union. On this last issue of control, leading members of the HR network pointed out that a small number of rms in their federation had a reputation for taking independent action on labour matters and for lack of participation in informal IR networks and understandings. Consequently, one of the rst stages in the intervention process was to establish memorandums of association to form what became known as the United Kingdom Drilling Contractors Association (UKDCA). This association delegated powers of negotiation to a bargaining group, advised and facilitated by the consultant researchers. The tension between headquarters control of individual member rms and the need to act as a cooperative unit, however, soon became apparent and highlighted the complex problems of union recognition and the development of partnership in this industry. For example, Texas Drilling[1], one of the rms thought likely by the leading HR managers to break the collective stance, adopted a stance of fear and panic (interview with senior UKDCA manager) and were seen to be under the direct control of US headquarters in Texas on all important IR matters. Along with US Drilling, another US-based company, Texas Drillings senior US managers took the issue of unionisation so seriously that the described it as destroying the company and being bad for business.

Yet both companies saw themselves faced with a dilemma. In spite of their anti-union stance and their records of independent action, they perceived a need to join the UKDCA because of the need for strength in numbers. At the same time, Texas Drilling, at least, felt they were unable to subscribe to decisions made by the UKDCA that involved recognising unions. Texass position during the rst six months of frequent meetings in 2000 was to ght a rear guard action and send over a senior US lawyer to guide the local management team and their UK labour lawyers. They also tried very hard to persuade the rest of the UKDCA members against union recognition. The consultants were asked for private consultations with the US management of Texas Drilling and during a series of conference calls linking managers and lawyers in both countries, the senior managers attempted to get from the consultants different answers to the same questions concerning the merits of union recognition. It became quite clear to the consultants and to the rest of the UKDCA members that Texas were always going to nd it near impossible to accept a union recognition and partnership strategy, which by the March of 2000 seemed to be the preferred position of the association. The employee survey phase as a means of intervention. The survey data provided a wealth of information on employee perceptions, which is beyond the scope of this paper to address in full. Tables I and II provide a selection of these data, which were presented to the Associations HR managers. Based on this data and other ndings from the survey, the headline conclusions from the study, which were reported to the HR managers and their senior managers, were as follows: (1) The standard predictors of why employees in non-union companies show little interest in joining unions are: . high levels of job satisfaction;
Mean response of all employees on a ve-point Likert scale 2.55 3.06 2.94 2.54 2.67 3.14 2.33 2.43

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Question As far as could be expected the company has provided me with a reasonably secure job The company has provided me with fair pay for the work I do The company has provided me with good career opportunities The company has provided me with interesting work The company has ensured my fair treatment by managers and supervisors The company has helped me with the problems I have encountered outside work The company always provides me with a safe working environment The company provides me with good training for the job Note: Scale: 1 strongly agree; 3 neutral; 5 strongly disagree

Table I. Selected data from the employee survey on key elements of the psychological contract (n 3,660)

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Question Employee relations in this company would be improved by having an employee representative who could speak to management on our behalf Management in this company usually consults employees on issues that affect them Management in this company usually gives employees plenty of opportunity to comment on proposed changes at work Having an employee representative would generally be benecial in securing fairer terms and conditions of employment There is denite need for better representation in this company to give voice to employee wishes and grievances Note: Scale: 1 strongly agree; 3 neutral; 5 strongly disagree

Mean response of all employees on a ve-point Likert scale 2.20 3.01 3.16 2.31 2.18

604

Table II. Selected data from the employee survey on the need for union representation (n 3,660)

(2)

(3)

(4)

(5)

positive beliefs about existing communications, consultation and grievance handling procedures; and . negative instrumental beliefs about the ability of unions to improve pay and conditions. From Tables I and II, it can be seen that job satisfaction was not signicantly high and that positive beliefs about existing communications were not high. Furthermore, unions were seen positively as a means of providing voice on key issues and, of lesser signicance, in improving terms and conditions of employment. Employees did not perceive that they were well-managed, which was particularly the case in relation to supervisors treating people poorly and to perceptions of a lack of trust in supervisors to work in employees best interests. Employees were particularly interested in future employability and the perception of a lack of career development by employees was strongly associated with positive attitudes to unions as a means of representation and participation in decision making. The lack of interactional justice (perceptions of fair treatment by the company and the lack of trust in managers) and the lack of affective commitment (towards the companies) were associated with positive attitudes to unions as a means of representation and participation in decision making. Expectations of job security were relatively low and, at the time of the survey, were worsening.
.

Based on these ndings the consultants advised the UKDCA that they should consider an active stance in setting up a union recognition agreement with an

appropriate union rather than adopt a defensive strategy. During the months of working with the HR group, the consultants had been involved in a long process of formal and informal education, in which they sought to point out to the HR managers the benets of an active partnership with a single union, but only if union recognition was to be the preferred strategy and if employees were likely to vote for union recognition. These data were interpreted as demonstrating that employees were likely to vote for unionisation, if given the opportunity during a ballot. They also indicated that employees were generally dissatised with their jobs and their employers, even among those companies in the industry that were recognised as having a more enlightened policy on employee voice and communications. Action on union recognition. Anticipating union recognition was to be a likely outcome of the UKDCA discussions, the consultants advised the association to consider the type of union they might wish to recognise before the results of the employee survey were announced. From the perspective of the UKDCA representatives, the worst possible outcome was that OILC would seek an immediate application for recognition and secure sufcient votes in the ballot to become a dominant force in the industry. Based on the consultants previous contacts with national UK union ofcials, two informal approaches were made to separate unions to ascertain the likely stance with both indicating a strong willingness to move towards a partnership agreement with the companies. The national ofcials of the AEEU, who had just signed a recognition agreement in another sector of the North Sea Oil industry, presented a particularly positive case and a decision was taken to offer recognition to the AEEU. Following a presentation by national ofcials to the UKDCA all members of the association left with a strong impression that the union had a positive approach to new IR and would be able to deliver on any agreements made. As a consequence, the AEEU were invited by the association to negotiate a recognition agreement in time for the June deadline. Despite advice from the consultants, however, the offer of recognition fell short of embracing the principles of partnership over issues such as job security and nancial participation. This turned out to be less of an issue than the bargaining team had anticipated. Following two, amicable meetings with national and local ofcials, a recognition agreement was signed between the association and the AEEU. As is the case with most friendly negotiations of this kind, the preparatory work by the bargaining team was critical in ensuring that the formal negotiations were characterised by a lack of surprises for both parties. Thus, after the meetings the bargaining team were able take back an agreement to the Association for its ratication, which was sold to the member companies in large part by these positive experiences with union ofcials. As a result, US Drilling, which had initially taken a stance that unionism could not be good for business, began to see recognition as the lesser of two evils and eventually came to see it in a much more positive light.

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Part of the process of recognition was the understanding by both sides that for the union recognition agreement to work effectively, the AEEU had to be given the maximum opportunity to recruit members. It was also felt that the AEEU should be given assistance to recruit to counter the potential threat of other unions such as OILC gaining members and submitting a recognition claim. Consequently, the AEEU was provided with assistance to recruit at the Aberdeen Heliport and given open access to visit the rigs for the purposes of recruitment. Despite this assistance, however, the unions found it more difcult than anticipated to recruit new members and employee representatives, a point to which we shall return. Wage negotiations and the beginnings of partnership. Following the signing of the recognition agreement between the UKDCA and the AEEU in June of 2000, there was period of eight months during which the AEEU were given time to establish a presence in the industry and to recruit members. Both sides, however, had committed themselves to conclude a substantive agreement on wages, holidays and working times by June of 2001. The negotiation process was delayed, in part, by the unions ability to recruit new members but, following a short period of bargaining, an agreement was concluded that enabled both sides to claim signicant wins. The bargaining process was particularly notable for four reasons. The rst was that both sides, with the exception of Texas Drilling, recognised that it was in the interests of both sides if they could claim some early wins. The UKDCA recognised that the AEEU would need to gain from the collective bargaining process, not only for immediate instrumental reasons but for longer term reasons connected with recruitment and in developing an atmosphere of co-operation and of partnership. From their part, the AEEU, were aware of the UKDCA position with respect to local managers relationships with their headquarters superiors, but also needed to secure a deal which placed them in a good light or at least one which could be sold in such a fashion. Consequently both parties to the bargaining process began to understand more fully the position of the other side, both had begun to work together on these issues and both had begun the process of building trust in each other so that partnership could characterise the relationship. The second feature of the negotiations was the inability of Texas Drilling to reconcile themselves to grant concessions on wider issues to the union side and they withdrew from the UKDCA before the bargaining process began. Their withdrawal underscored the fragility of this new model of employee relations in the North Sea and may have important consequences for the future of union recognition and for partnership in the industry. The third aspect of the negotiations was the manner in which the AEEU used the agreement to their advantage to present a positive image to their constituents and to the wider labour movement. As we have noted, other unions, principally OILC, had an interest in the North Sea and had mounted a

sustained campaign, often through the local and national news media, denouncing the recognition agreement as a sweetheart deal. This campaign was seen by the AEEU as potentially damaging to recruitment, to their ability to secure other, similar arrangements, and to their standing in the UK labour movement. Consequently, the AEEU took positive action, including the use of sophisticated public relations advice, to present the deal in the local and national news media as a win for responsible unionism.

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The immediate outcomes Our assessment of the outcomes following a process of two years of action research have positive and negative implications for the future of such an arrangement in the industry. First, the 2001 agreement, which was concluded in the summer of that year with the senior ofcial of the AEEU, was conducted in a win-win atmosphere and allowed both sides to claim private and public success through the local and national news media. Such an agreement provides the basis for enhancing trust relations between the UKDCA and the AEEU, especially in concluding a partnership deal that takes the relationship to a new level of co-operation. The AEEU have indicated that they are sincere about a partnership with the drilling companies and have taken a number of actions that support this view. At a national level, they have indicated they will oppose an energy windfall tax, a measure that is detrimental to the oil companies and the drilling contractors. They have also indicated they will act as a supporter of the oil companies in their lobbying role in government circles and have offered to put 50,000 into shop steward and membership training into learning centres established within the industry as part of their lifelong learning initiatives. Finally, they have indicated a willingness to partner with the UKDCA to provide facilities for joint manager-shop steward training and to work with local ofcials and local managers to quell unreasonable claims during disciplinary hearings and procedures. Second, despite the assistance of the UKDCA, the AEEU has found recruiting new members and union representatives difcult. Estimates of recruitment are difcult to gauge accurately, since we have to rely on union gures. Their estimates point out that from a potential membership of 7,000 employees in the industry, less than 2,000 had signed up by late 2001. Of that number, only 170 paid dues directly through the company to the union on the basis of a check-off agreement. Finally, it was estimated that some 200 union representatives would be needed to service the expected membership in the circumstances of geographical dispersion. By the time of completing the research, only around ten representatives had been recruited. These gures on the pace of recruitment and particularly on the appointment of union representatives were slower than anticipated by the AEEU and the employers. We turn to the possible reasons for this in the discussion, but they cannot be

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divorced from the issues of lack of union resources and of a fear factor among employees in the industry. Third, the underlying fragility of the association has been recently exposed by the Texas Drillings withdrawal from the UKDCA. This withdrawal has been made more signicant because of a recent merger between themselves and Alamis Oil, a company that is an active member of the association. As yet, it is unclear whether that merger will effect the position of Alamis Oil, since there has been no strong direction on this issue from the senior management, which is under the control of an ex Texas CEO. These uncertainties have led the local HR managers to speculate on possibility of further withdrawals from the association and a questioning of the process of partnership. Fourth, on a more positive note, the member rms in the association have subscribed to a series of training and development programmes for HR managers and line managers on labour relations. These programmes have been designed to provide managers with an understanding of the role of unions in labour relations and to structure their attitudes to collective bargaining as well as skills in areas such as grievance handling and dealing with union representatives. It is intended to operate joint manager-union training with a view to cementing trust relations within the industry in the not-too-distant future. Discussion and conclusion In the spirit of action research, we wish to reect on what we have learned from working on and researching into the project. There are three points worth noting in this regard: (1) Although it was anticipated that there would be problems in dealing with the some of ghosts at the bargaining table, steering a course through the complexities of the internal negotiations and the divisions in policy and attitudes among the member companies of the UKDCA proved to be a much bigger problem than dealing with the AEEU. Our experience on this issue speaks to the importance of the two sub-processes of bargaining intra-organisational bargaining and attitudinal structuring identied by Walton and McKersie (1965). There has been a wide range of responses from the different companies in the association, even among those US-owned companies that do not recognise unions in their home country ranging from outright hostility to pragmatism. (2) These variations in attitudes and policy on labour relations may reect the extent to which local HR managers have been able to manage the relationship with their headquarters executives, and also the extent to which local HR managers saw it as part of their personal career interests to recognise unions. As consultant/researchers we sensed a much greater willingness on behalf of certain of the local HR managers than others to

recognise and deal with unions. We are inclined to believe that certain of these managers perceived that their own careers would be advanced by taking on board a higher level, contracts manager role associated with IR negotiations, rather than fullling the clerk of works role to which they were originally consigned (Tyson and Fell, 1986). (3) Although it was anticipated that dealing with unions in the current climate of low union density and difculties in recruitment might have been different from a decade or so ago, it came as a surprise to see just how far a union like the AEEU had pursued the agendas of partnership and co-operation with employers. The willingness and actions of the AEEU to co-operate was indicative of their acceptance of the new IR and new realism described by Guest (2001) and others. As a consequence, moving union ofcials from a traditionally distributive to integrative bargaining position was not difcult to achieve as, in this case, it was the union ofcials who provided much of the leadership for change through powerful persuasion and conciliatory actions. These personal reections are intimately connected to the research questions highlighted in the introduction and we address these in turn. First, our data provide support for Guest and Pecceis (2001) generally positive outlook for partnership and for the usefulness of Guests (2001) perspectives on IR set out in the introduction. Despite the problems encountered, we feel that partnership models can emerge from the bleak house of British IR. The 1999 legislation in this respect provided a necessary but not sufcient condition by giving unions a modest degree of leverage. A further necessary condition has been the signicant change in attitudes and strategy to IR on the part of major unions such as the AEEU, as exemplied by this case study. Nearly three decades ago, Hyman (1975) rather pessimistically pointed out that unions in advanced capitalist countries were only able to reect the contours of capitalism. Our case study shows that, in thinking at least, a union such as the AEEU is attempting to do more than simply reect new realities and is attempting to change the rules of the game by holding out a vision of partnership to employers as a way of solving labour problems. There is little doubt from our experience in consulting and researching this project, that employers who nd or position themselves in the bleak house category of HR/IR have been attracted to by the initiatives and responses of new unions. However, there are issues for unions such as the AEEU that have to be taken into account. First, they may will the ends but may not have the means to realise their rhetoric due to a lack of resources and a history of apathy towards unionism and/ or fear in contexts similar to the North Sea Oil and Gas Industry. The lower than anticipated recruitment by the unions and their inability to secure representation speaks to these three issues, points to which we shall return. Furthermore, as we have discussed in the previous section, there is a danger for unions following and promoting partnership strategies is that they

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risk endangering their independence and alienating sections of the membership who have joined them to provide representation and opposition rather than because they were a business partner. Herein lies a danger for managers in seeking to incorporate unions into strategies of joint control in so far as the employers run the risk of helping to make unions unrepresentative of the members they are supposed to serve. In this sense, as Guest (2001) has pointed out, there still remains some questions concerning whether robust unionism can survive in situations where managers pursue sophisticated HR policies aimed at incorporating unions and employees. Thus, as researchers and consultants, we too question just how much a version of partnership, which is based on unitarist principles, (Guest and Peccei, 2001) serves the longer term interests of unions and employees, since the perceptions and fact of independence are critical in any form of representative democracy, of which a partnership model is just one variant. Second, our cases study provides evidence to support the level II hypothesis of Heckscher and Hall (1994) that for partnership agreements to develop and change the politics of local working arrangements, bargaining must involve all stakeholders, no matter how far removed in distance and time, to incorporate successfully these ghosts at the bargaining table. This is especially the case when dealing with complex international organisations, many of which have no coherent strategy on HR/IR or, as in this case, are forced to consider approaches that they are naturally inclined to reject. The case provided ample illustration of the complicated and often-frustrating process of attitudinal structuring and the intra-organisation bargaining between the consultants and local HR managers on the one hand and the senior managers in the USA on the other hand. It also provided evidence that unions such as the AEEU have begun to become more astute in dealing with their own constituents in using public relations techniques to manage expectations and attitudes among potential union recruits and other sections of the labour movement. Third, the case shows the positive and negative sides of using survey data collection methods in attempting to bring about labour relations changes. In the case study the survey was intended to ascertain the state of health of employment relations in the industry and among individual rms as well as gauge the likely interest in unionisation among employees. As such the survey was intended to provide objective data on these issues that could then be used as information to develop an HR/IR strategy consistent with employee feelings. From the perspective of the consultants, there is little doubt that such data was necessary in persuading local managers and, more particularly, head ofce managers of the case for unionisation. To the extent that this was objective evidence of the kind in line with US expectations of rational knowledge, the survey provided a key input into intra-organisational bargaining. However, there has been much criticism of relatively blunt instruments such as surveys in predicting how generalised attitudes and

statements of intentions come to be translated into behaviour in specic contexts and at particular time periods. There is little need to dig deep into such criticisms: surveys are often seen as snapshot and static techniques, which say more about the values of the surveyor than the surveyed and are incapable of sensitising people to issues of process and change in specic situations. Moreover, there is a whole body of literature that questions the relationship and direction of causality between attitudes and specic behaviours, such as joining unions. In this case study, the data and how we interpreted them, pointed in the direction of relatively high latent demand for unionisation. At this stage, we can only speculate on the reasons why our survey and anticipated recruitment rate of new union members has fallen below expectations. These reasons might include the absence of traditional facilitating factors that assist union growth, such as geographical proximity which makes recruitment and collective identity easier to achieve, and relational psychological contracts, despite the attempts of companies to provide some degree of job security. And, as we have already speculated, they might include a strong element of a fear factor. In the context of this case, our further research must be to identify why we got it wrong in this case.
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