Assignment 2 – Case Study

Fife Oil is a European Oil company with its HO situated in Scotland and other key subsidiary sites based in Norway and Hong Kong. Due to a downturn in the North Sea Oil Sector (connected to global oil prices and high extraction costs), the company has been increasingly turning its attention to production in Asian oil fields.

Pressure has been on the company to cut costs while increasing production in Asia, but at the same time, there is a real need to retain skilled staff in order to resource valuable and profitable drilling, production and support projects. Fife Oil offer workers representation through an Enterprise Union. Relations between the company and union representatives have been good in the past, but up until now the union has only negotiated on non-substantive issues, not pay.

Local staff in Hong Kong have informally complained to union reps that senior managers show ‘favoritism’ to key staff, offering the best shifts and opportunities for overtime. However, these complaints rarely progress to formal grievances, as this is not encouraged within the company.

One member of staff (engineer) reported: “I ask for daytime shifts as I have a young family and my wife works as well, but they keep allocating me night shifts, I don’t know what to do, or who to speak to, I hate complaining as I don’t want to be seen as a trouble maker but I also hate night shift.

And some people get offered night shift as overtime and that’s a higher rate of pay, but I only get it as part of my standard hours, standard pay. I don’t think this is fair. The night shift is anti-social hours”. Additionally one of the key issues in the workplace surrounds the use of temporary contractors.

Whilst the use of contractors is increasingly commonplace in the industry, there are large differences in rates of pay, day rates are negotiated [by agencies] on a job by job basis – there is no negotiated standard rate of pay for contractors and little opportunity for job security or guaranteed hours.

Again favored staff is given the best contracts. Tensions in the workplace are running high and the most recent engagement survey conducted by the HRM team reveals low levels of job satisfaction and high levels of intention to quit amongst staff.

Write a report to the Managing Director of Fife Oil focussing on the following key issues:

1. How can the company improve its policies and procedures so that all staff feels they can adequately voice their concerns and get a resolution to problems?

2. What approach could the company take to resolve perceptions of unfairness relating to rates of pay, allocation of shifts, use of contractors, and overtime?