Deal struck in Lindsey oil refinery dispute

Contractor settles dispute after pressure brought by wider oil industry

Construction contractors at Total's Lindsey oil refinery have settled their labour dispute by agreeing to reinstate 700 sacked workers, amid concerns that the sackings had led to wildcat sympathy strikes across the country.

The deal – brokered at a meeting between the managing contractor, Jacobs, the Engineering and Construction Industry Association (ECIA) and the GMB and Unite trade unions in the early hours of yesterday – will be put to staff working on Lindsey's hydro-desulphurisation unit building site on Monday. The proposal is expected to be accepted.

Les Bayliss, assistant general secretary of Unite, said: "We're pleased we were able to thrash out a deal. Following hours of detailed negotiations, there has been a significant breakthrough. The proposals will be recommended to the workforce by the union's shop stewards at Lindsey on Monday morning."

However, the redundancy programme is not over at Lindsey. The dispute started because 51 workers were laid off by one of Jacobs' subcontractors on the site, at the same time as another was hiring. But the project is nearly finished, so staff will still have to be cut. Once all workers, including the original 51 redundancies, are back at work on Monday a new formal redundancy programme will start.

The reinstatement deal includes an assurance of a minimum of four weeks employment, and guarantees both efforts to co-ordinate new work and normal severance payments in the event of redundancy.

There were disruptions at nine engineering building sites in response to the problems at Lindsey, including the South Hook liquefied natural gas terminal and the Sellafield nuclear plant.

The Lindsey deal is a stark volte-face from the employers' earlier hardball tactics of immediate dismissal. Sources close to the dispute credit the change in attitude to demands from Total that the completion of its building project take priority over subcontractors' industrial relations issues. Pressure from other companies affected by the problems was also a factor.

"There will have been pressure from many different directions, including the other companies affected by the strikes," a source close to the talks said. "The fact that things weren't resolved by the original uncompromising approach led the managing contractor, Jacobs, and the client, Total, to decide to get around the table and work constructively."

Michael Hockey, the managing director of the ECIA, which represents the employers on the site, said: "We welcome the resolution and call on all operators to pull together to finish this very important project in a timely and orderly fashion. We recognise how vital it is, for the good of the industry as a whole, that there is a return to normal working at the earliest opportunity."

Total was represented at the meeting as an observer only. The French group has no formal role in the talks because it does not employ the construction workers at its site.

A spokeswoman said: "Total is pleased the contractor companies and the unions have been able to reach a positive conclusion."