Wood Group to cut North Sea pay rates for contractors
Oil services giant the Wood Group have said they plan to cut rates paid to a third of its contractors by 9%.
Oil services giant the Wood Group have said they plan to cut rates paid to a third of its contractors by 9%.
The move will affect around 200 contractors and is the third cut since 2014.
The Aberdeen-based firm said in a statement the reduction is down to continuing cost and efficiency challenges in the North Sea oil and gas sector''.
James Crawford, managing director of Wood Group PSN in the UK and Africa, said: This is not a decision we have taken lightly, but we believe it is the right one to proactively meet the continuing cost and resourcing challenges affecting the UK North Sea oil and gas sector.
Our focus and commitment remains on contributing to the industry's long-term sustainability.
This adjustment to the rates we pay our UK contractors ensures we continue to be competitive within the marketplace. We highly value our contractors and this measure will allow us to sustain our relationship with these talented people, whilst taking appropriate measures to improve efficiency and reduce cost for our customers.''
This latest adjustment to contractors' rates follows a 10% cut in May, 2014 and a further decrease made by Wood Group PSN seven months later.
More than 7500 people work for the group in the UK, including around 600 contractors.
Unite, the UK's biggest offshore trade union, warned the rate cuts will deepen a race to the bottom'' on North Sea employment standards.
Unite regional officer John Boland said: This is another blow for our members in the Wood Group who have already suffered cuts to their rates of up to 20%, in the worst case examples, over the last two years.
Our big fear is that this latest cut will spark another domino effect across offshore contractor firms, intensifying the pace of a race to the bottom on jobs, pay, skills and working-time.
The consequences for employment standards in the offshore sector could be dire where the future outlook is fewer employees working longer and harder for increasingly less.
Time and again we have warned government about the seriousness of what is happening in our oil and gas sector but the responses so far have amounted to sticking a plaster on a gaping wound. Unite has previously called for emergency tax breaks to alleviate pressure on the industry and release finance to sustain existing jobs, skills and standards.