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The end of the affair?


When the Major Projects Agreement was drawn up in October 2003, it promised a new era in industrial relations.But as tensions between BAA and M&E workers at Heathrow's T5 threaten to end in strike action, the future of the agreement is uncertain. Grant Prior reports

WATCHING a relationship fall apart is always painful. And the people really suffering in this break-up are BAA and the electrical contractors at Heathrow's T5 as the Major Projects Agreement disintegrates around them.

Things were so different back in October 2003 when the deal was drawn up and trumpeted as a revolution in the way industrial relations should operate on the mechanical and electrical side of the country's biggest projects.

The idea was a simple one.M&E workers would be paid more for working on prestigious jobs and in return they would drop arcane working practices and improve productivity as strikes became a thing of the past.

Both sides seemed happy as the airport operator became the first client to introduce the deal at Britain's biggest building site.

Construction director Andrew Wolstenholme said: 'A programme of the size and complexity of T5 can really benefit from this and we recognise the huge advantages that working in an integrated environment can bring.'

Union leaders joined the love-in and Amicus national officer Paul Corby said: 'This agreement is the way forward for the industry.'

But fast forward to the present and the warm glow of partnership has been replaced by an all-too-familiar fall-out with the sparks threatening to strike while BAA stands there aghast like a cheated spouse.

So where did it all go wrong? Was any attempt to transform the M&E sector doomed to failure from the very beginning?

The answer lies in the very people the agreement was supposed to change - the M&E workers.

Electricians are traditionally the most militant trade in the construction sector.They arrive on site in ever-increasing numbers as projects draw to a close and know they hold the key to a job finishing on time.

One industry consultant said: 'It's a fairly standard pattern on most big jobs - the civils side of things goes off easily and the problems only really start with the M&E side.

'The sparks know that without them the job won't get finished on time and that gives them a lot of power when it comes to making demands.'

But surely the MPA was designed to stop all those problems by offering M&E workers better conditions and an extra £3 an hour which boosted their pay to as much as £50,000 a year?

Well that was the plan, but BAA and the contractors at Heathrow underestimated the determination of the sparks to screw as much as possible out of their employers.

Work at the site has been progressing smoothly until now with Laing O'Rourke charging ahead on the civils side of the job.The crisis only erupted once the electricians reached a critical mass on the site, encouraging them to flex their muscles.

One Amicus source said: 'At the start there was only a handful of sparks on the job, so there was never really going to be any trouble. But now there are about 400 of them they know they can do something.'

The electricians were looking for an issue to go to war on - and ironically it was BAA's generosity that provided them with the ammunition.

The airport giant's deal with Laing O'Rourke included a travel allowance of up to £25 a day for workers on the civils side.

That was more than the sparks were getting under the MPA and was enough to ignite a major row.

The Amicus source said: 'There is no way our lads would stand for worse terms than the civils people so they demanded something was done about it.'

To be fair, the sparks had some legitimate gripes because travelling to and from the site has become a real headache.

One electrician said: 'T5 is in the most congested part of the country and having to travel on the M25 and M4 is a nightmare.

'There is no car parking for us next to the job and we have to get bussed in from the outside car parks, which takes at least 30 minutes.

'Some of the lads can be stuck getting out of the car parks for 40 minutes at night, so it all adds up when you're not getting paid anything for it.'

Reasons for the first fight were now in place and it was just a question of how the battle panned out.And that was where things took a strange turn.

The MPA contains a three-stage disputes procedure that clicked into action once the electricians put forward their travelling grievances.

The first two hearings failed to reach an agreement, so everything rested on the decision of the Stage Three panel at a west London hotel in the middle of last month.

Equal numbers of employers and union representatives make up the panel, with the contractors' representatives taken from independent firms that are not working at T5.

Because of the balance of the panel, BAA was confident the workers'claims would never be accepted.

But the decision came back that they agreed in principle with the operatives' claims and put forward an offer of a £7 a day travelling allowance, rather than the £25 demanded.

The Amicus source said: 'No one could believe it when they came down in our favour.We were sure they would chuck it out or stall it somehow.

'The word we heard was that the representative from the Electrical Contractors Association was pushing in our favour.They are the main backers of the agreement so it makes sense for them to want a resolution.

'I know BAA went ballistic when they heard the decision - they were totally stunned.'

The negotiating machinery has now been exhausted and the M&E workers have rejected the £7 offer by a majority of 256 to nine.

Amicus official Frank Westerman said: 'The situation is now pretty clear.

We are organising a strike ballot and, unless they make a better offer in the meantime, that will go ahead.'

BAA is still clinging on to the hope of reaching an agreement. A spokeswoman said: 'We have been told nothing will be happening for at least five weeks and we are seeking more information from the MPA forum about the decision they made.

'We disagree over a number of points on the travelling issue but are still signatories to the MPA.'

How long that remains the case is the real issue.

One industrial relations expert said: 'If a strike does break out at T5 it is difficult to see how the MPA can remain in force.

'I mean, what's in it for the client and the contractors? They are forking out all this extra cash but getting nothing in return. It seems like a very one-sided deal at the moment.

'BAA's main hope must be that Amicus does something at a national level to stop a strike.They have been outmanoeuvred locally but could put pressure on the union executive to step in and sort this whole mess out without resorting to industrial action.

'That would be one way of preserving the MPA, which would be a good thing because it is the way industrial relations should be going in a modern construction industry.'

The problems at T5 are threatening the whole future of the agreement because other clients and contractors are sitting back to see how it works in practice.

MPA Forum chairman Sir Michael Latham said: 'There are problems at T5 but it is not a case of that putting other people off the agreement.'

But Sir Michael will have a tough job selling the deal while the row at Heathrow rumbles on.

One source at a major contractor said: 'They have been pushing us to use this deal on the M&E side of our biggest jobs but no one is going to get involved at the moment.

'Fair enough if it all works out well at T5, but that doesn't look like the case at the moment so people are steering well clear.' It wasn't supposed to be like this.