The changing nature of labour regulation: the distinctiveness of the National Agreement for the Engineering Construction Industry

• Author: Linda Clarke,Ian Fitzgerald
• DOI: http://doi.org/10.1111/irj.12280
• Date: 01 March 2020
• Published date: 01 March 2020

The changing nature of labour regulation:

the distinctiveness of the National

Agreement for the Engineering

Construction Industry

Linda Clarke*and Ian Fitzgerald

ABSTRACT

The article addresses the changing nature of labour regulation through analysis of the

National Agreement for the Engineering Construction Industry, originating in 1981.

It shows how multiple spatial regulatory scales, the changing coalitions of actors in-

volved, employer and client engagement and labour agency have been critical to Na-

tional Agreement for the Engineering Construction Industry’s survival.

1 INTRODUCTION

Much is written on the transformation of industrial relations and the regulation of la-

bour under a neoliberal imperative, leading to decentralisation and the erosion of co-

ordinated sectoral bargaining (e.g. Baccaro and Howell, 2011; Marginson, 2015;

OECD, 2019). Despite this, there are policy initiatives in Britain to reconstruct collec-

tive agreements, for which one of the few surviving agreements, the National Agree-

ment for the Engineering Construction Industry (NAECI), serves as a blueprint

(Ewing and Hendy, 2013). The question this raises is how and why has NAECI sur-

vived in the face of the disappearance of multiemployer collective bargaining and

what significance does this have for labour regulation?

In the role accorded to NAECI, the engineering construction industry in the United

Kingdom (UK), characterised by large, often state-sponsored, infrastructure plant

projects, flies against the wind of decentralisation and deregulation. The industry em-

ploys 188,000 workers and its ‘in scope’activities include design, engineering, pro-

curement, project management, construction, maintenance, repair, replacement,

testing or decommissioning of any chemical, electrical or mechanical apparatus, ma-

chinery or plant, to be used on or installed on a process site, whether in the oil and

gas, renewables, nuclear, petrochemicals, pharmaceuticals, food and drink, waste

and water sectors [Engineering Construction Industry Training Board (ECITB),

2019a]. As described by Brookes (2012, p. 603), it is

❒Linda Clarke, Westminster Business School, University of Westminster, London, UK and Ian

Fitzgerald, Newcastle Business School, Northumbria University, Newcastle upon Tyne, UK.

Correspondence to: Linda Clarke, Professor of European Industrial Relations, Westminster Business

School, University of Westminster, London, UK.

Email: clarkel@wmin.ac.uk

Industrial Relations Journal 51:1–2, 58–74

ISSN 0019-8692

© 2020 The Authors. Industrial Relations Journal published by Brian Towers (BRITOW) and John Wiley & Sons Ltd

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribu-

tion and reproduction in any medium, provided the original work is properly cited.

…a truly global endeavour. Multinational and multicultural projects are the norm encompassing a

wide range of disciplines in addition to civil and structural engineering, such as mechanical engineering,

electrical engineering, control and system engineering, structural and pipe fabricators, contractor ser-

vices and logistics.

Not all clients and contractors choose for their projects to be ‘in scope’, so NAECI

covers only part of the industry. Indeed, official figures for 2017–19 show only about

10,235 workers employed directly under the agreement, although 36,000 were re-

corded in 2008 [Business, Innovation & Skills (BIS), 2009; National Joint Council

for the Engineering Construction Industry (NJCECI), 2019a].

National Agreement for the Engineering Construction Industry registered projects

are nevertheless some of the largest and most prestigious in Britain, including the

£650 million Teeside Biomass project employing over 1,300 site workers, the £350

million Siemens’Keadby project employing 490 and the £500 million Fawley project

employing 450 (NJCECI, 2019b). These set a standard for the industry with respect to

terms and conditions of employment, including direct employment, working hours,

pay and benefits, pensions, disciplinary and grievance procedures, training and skills

(NJCECI, 2018). Above all, NAECI is founded on the principle of direct employ-

ment, so that sites contrast strongly with those in building and civil engineering,

where labour and wage relations are individualised through extensive subcontracting

and self-employment (representing in 2019 nearly one million in a workforce of 2.3

million), union membership is low, and regulation weak, with only nominal reference

to the National Working Rule Agreement (Clarke et al., 2012; Office for National

Statistics, 2019). Critical to regulatory change in engineering construction has been

the interaction with the wider construction industry and the contradictions inherent

in sustaining a highly complex labour process within a neoliberal capitalist system.

Through the example of NAECI, this article shows how labour regulation has

changed significantly since Flanders’(1964) postwar notion, referring to the proce-

dural and substantive nature of collective bargaining and the range of actors and

levels where rules are introduced. This change is reflected in debates surrounding

the French Régulation School, faced with the challenges of loss of autonomy of in-

dustrial relations institutions and the need to reconstruct the rapport salarial or wage

relation at the heart of the mode of regulation in the face of internationalisation,

financialisation and sharpening external constraints on national models of develop-

ment (Grahl and Teague, 2000). It is also reflected in literature on the ‘colonisation’

of regulatory space, which emphasises worker agency (Shibata, 2016) and multiple

spatial regulatory scales or the polymorphic nature of regulation (MacKenzie and

Martinez-Lucio, 2014; Pernicka et al., 2016). The colonisation of regulatory space

is no longer confined within national boundaries but has extended in scope and scale

and become more complex. As highlighted by Inversi et al. (2017, p. 294) too, regu-

latory space can be both ‘occupied’and ‘contested’over time by actors concerned,

so introducing a historical or polyrhythmic dimension to regulatory change and the

coalition of actors involved.

In this article regulatory change in engineering construction is explored through

key themes—the mode of regulation, regulatory space, labour agency and coalitions

of actors. Given the diversity of the construction sector, account needs also to be

taken of the variegated, uneven nature of capitalist development and the significance

of different product and labour markets (e.g. Brown, 2008; Lane and Wood, 2009;

Peck and Theodore, 2007). The article shows how the regulatory space inhabited by

59Changing labour regulation: NAECI

© 2020 The Authors. Industrial Relations Journal published by Brian Towers (BRITOW) and John Wiley & Sons Ltd