Government refers foreign workers dispute to mediators

The Government today asked mediators to intervene in a bitter dispute over the use of foreign workers on construction projects in an attempt to halt an explosion of wildcat strikes across the country.

The move followed sympathy protests yesterday over a decision to bring in hundreds of Italian and Portuguese contractors to work on a new £200 million plant at the giant Lindsey Oil Refinery at North Killingholme, North Lincolnshire.

It comes amid threats of mass industrial action in support of jobs for British workers.

Union leaders and representatives of engineering construction firms and contractors are expected to meet in London next week in a bid to find a way of resolving the row.

The so-called National Joint Council will meet on Wednesday. This will be followed by a meeting of union shop stewards a few days later.

Employment Minister Pat McFadden last night said he had asked the Advisory, Conciliation and Arbitration Service (Acas) to examine claims that British workers were being illegally excluded from some major engineering and construction projects.

Meanwhile, a Labour MP launched his own inquiry into whether European laws had been broken, while the union at the centre of the dispute announced plans for a huge demonstration in Westminster.

Mr McFadden said: "I understand people's concern about employment issues.

"Jobs are a concern in every community in the country because of impacts of the global downturn. But we can't and don't support unofficial strike action.

"We do, however, want to establish the facts. So many allegations have been flying about today.

"I have asked Acas to establish an independent examination of the facts around these cases - allegations of hiring practices and so on. It is a sensitive matter, tempers are running high. We must take an independent and dispassionate look at the facts.

"Acas will report to Government, to employers and to the trade unions. They will be involved. We expect this to proceed quickly. We must establish what is going on."

Unite joint leader Derek Simpson welcomed the involvement of Acas as a "step in the right direction", adding: "We need urgent action from the Government to insist that employers in engineering and construction who exclude UK workers, end this practice.

"We need a level playing field for all workers in construction."

Yesterday, as thousands of workers at sites including power stations and oil refineries took unofficial strike action, Prime Minister Gordon Brown was told his phrase about creating British jobs for British workers had come back to "haunt him".

There was speculation the dispute will escalate on Monday and spread "like wildfire" across the country if the deadlock is not broken.

Up to 1,000 demonstrators staged a protest for the third day in a row at a new £200 million plant at the giant Lindsey Oil Refinery at North Killingholme, North Lincolnshire, where the row started.

There were sympathy strikes at the giant Grangemouth oil refinery in Scotland, the Aberthaw power station near Barry in South Wales, a refinery in Wilton, Teesside, Kilroot power station in Carrickfergus, Northern Ireland, the Marchwood Power Station in Southampton, a gas terminal at Milford Haven, West Wales, the Fiddlers Ferry power station near Warrington and a number of other smaller sites.

Around 100 Italian and Portuguese workers are on the North Killingholme site, accommodated in large, grey barges moored in Grimsby docks, and are expected to be joined by 300 more next month.

Cleethorpes MP Shona McIsaac (Labour) said the decision to hire foreign workers was like a "red rag to a bull" to local unemployed people.

Total said the Irem contract involved no anticipated redundancies from the existing contractor workforce and stressed that local companies would be providing additional support services to the project.

Labour MP Nigel Griffiths (Edinburgh South), a former construction minister, said he will launch an inquiry to see if the Italian contractor involved in the dispute had broken European law by excluding British workers.

"If they have been telling the unions that under no circumstances will they recruit UK workers, that is a breach of European law."

Tim Finch of the Institute for Public Policy Research said: "British jobs for British workers was a careless slogan that is coming back to haunt the Prime Minister.

"With free movement of labour inside the European Union, jobs cannot be ringfenced for UK-born workers, and in just the same way, Italian companies are free to hire UK firms and our workers to fulfil contracts in their country. The free market in the EU has been a source of greater trade and prosperity and protectionist measures would be disastrous in the current climate."

Asked if the Prime Minister now regretted his "British jobs for British workers" slogan, a Downing Street spokesman said: "I do not see a reason for regret in that the action we have taken has meant that we are now putting in place measures to ensure that British workers can have access to the vacancies that exist in the system."

The contract being filled by foreign workers at the centre of the dispute had been agreed "some time ago when there was a shortage of skilled labour in the construction sector in the UK.

"That obviously is not now the case and we will be speaking to the industry in the next few days to ensure that they are doing all they can to support UK economy."

TUC general secretary Brendan Barber said: "With big job losses announced every day, workers are fearful for their jobs. Refinery workers are understandably and rightly angry at employers who have not given British-based workers the opportunity to apply for new jobs. The employer will be in breach of the law if they restrict any future vacancies to workers of a particular nationality or location.

"But unions are also clear that the anger should be directed at employers, not the Italian workers. No doubt some of the more distasteful elements in our towns and cities will try to use the fears of workers to stir up hatred and xenophobia, but I am confident that union members will direct their anger at the employers who have caused this dispute with their apparent attempt to undercut the wages, conditions and union representation of existing staff."