Employment relations on major construction projects: the London 2012 Olympic construction site

• Published date: 01 November 2013
• DOI: http://doi.org/10.1111/irj.12038
• Author: Geoffrey White,Janet Druker
• Date: 01 November 2013

Employment relations on major

construction projects: the London 2012

Olympic construction site

Janet Druker and Geoffrey White

ABSTRACT

The construction of the London 2012 Olympic Park provided a model of employee

relations that crossed organisational boundaries. This model was countercultural,

contrasting with the unregulated approaches that are commonplace in construction

and contrasting too with collaborative models that have been developed on other

major projects.

1 INTRODUCTION AND AIMS

This article is concerned with the management of employment relations in a complex,

multi-employer environment. The focus is on one iconic project—the London 2012

Olympic site—but the article draws on research and publications about other major

projects in order to illustrate the distinctive and important features of London 2012.

This evaluation is important for two reasons: first, because investment in successful

major infrastructural projects is significant for economic regeneration, for job crea-

tion and for the terms on which work is delivered; second, major projects involve

multiple stakeholders and raise challenging questions concerned with management

across organisational boundaries.

The establishment of a principled and consistent approach to employment by

project leaders in a multi-organisational environment may seem to be counter-

intuitive in the construction industry, where subcontracting, self-employment, bogus

self-employment and use of agency-type labour are commonplace (Wright and

Brown, 2013). Our research asks why such an approach was initiated and how it was

implemented in practice.

The London 2012 Olympic Park is the focus for our study, as it exemplifies the

importance of a complex network of organisations engaged on a high-profile, multi-

employer project attracting international attention. The internal differences in

approach within the project are of interest because the Olympic Park was constructed

via a non-departmental public body, the Olympic Delivery Authority (ODA),

❒Janet Druker is Professor of HRM, University of Westminster Business School, University of Westmin-

ster, and Geoffrey White is Professor of HRM, University of Greenwich Business School, University of

Greenwich. Correspondence should be addressed to Janet Druker, University of Westminster Business

School, University of Westminster, 35 Marylebone Road, London NW1 LS; email: drukerj@westminster.

ac.uk

Industrial Relations Journal 44:5–6, 566–583

ISSN 0019-8692

© 2013 Brian Towers (BRITOW) and John Wiley & Sons Ltd

working with a joint venture delivery partner to establish the ‘ethos’ and practices of

direct employment, requiring the supply chain to implement terms and conditions set

through collective agreements as a minimum. The Athletes’ Village, the other com-

ponent in the Olympic project, was established in the expectation that it would be

delivered by developers, Lend Lease, who would retain ownership post-Games. This

expectation proved, in time, to be impractical, but it meant that conditions on the

Athletes’ Village differed from the Park. A third adjoining construction site

at Stratford—the Westfield shopping complex—was outside the Olympic Park

arrangements.

We seek to understand how the governance of employment relations on this

project—and in particular the relations among the ODA, the delivery partner, Tier 1

contractors and trade unions—impacted on work and employment. We explore the

implications for trade unions and for the management of employment relations and

comment on the management of risk. The study invokes comparisons with other

major prestige projects, most notably the Sydney Olympics in 2000 and the construc-

tion of London Heathrow Terminal 5.

The challenges and successes of the construction of the London 2012 Olympic Park

have been explored in relation to timely project completion and high standards of

health and safety (Lucy et al., 2011), but employment and the framework for employ-

ment relations have a bearing on other critical factors in project performance. We

argue here that the initiatives taken in respect to the framework for employment

relations were distinctive and significant, informed by but differing from approaches

adopted on other comparable construction projects.

The article draws on agreements and codes of practice set up for the Olympic site

and on published research data about other major projects, including research

about the 2012 Olympic project and its forerunners. Our approach draws on semi-

structured interviews with a range of stakeholders, including representatives from

the ODA, the joint venture (made up of CH2M Hill, Laing O’Rourke and Mace;

known and referred to hereafter as CLM), Tier 1 and Tier 2 contractors, and trade

union representatives. Interviews were conducted mostly between March and

December 2012, after the site had been completed but spanning the period of the

Games themselves.

First, we consider the London Olympic site and review previous research concerned

with major projects and employment relations, particularly where this connects with

management across organisational boundaries. We comment on the survival of multi-

employer collective agreements in the UK construction sector and their relevance for

major projects. We point to the legacies of earlier Olympic sites. We go on to explain

our research process and methodology and report on findings that are then discussed.

Finally we draw conclusions.

2 LARGE PROJECTS AND EMPLOYMENT RELATIONS

The London 2012 Olympic Park, like previous Olympic sites, was a complex series of

interconnecting projects and venues that were to be delivered according to a tight time

schedule under the spotlight of media attention. At its peak the Olympic Park engaged

about 40 prime Tier 1 contractors (with a total of 1,433 Tier 1 contracts (Raco, 2013:

13), plus around 3,000 significant subcontractors (figures from senior interviewee)

with a total of 7,500 Tier 2 contracts (Raco, 2013: 13). The site was twice the size of

Heathrow Airport’s Terminal 5, one of the UK’s largest infrastructure projects

567Major construction projects: London 2012

© 2013 Brian Towers (BRITOW) and John Wiley & Sons Ltd