NAECI vs Non-NAECI Engagement Models — IR Considerations During Project Mobilisation

Industrial Relations Considerations During Project Mobilisation

One of the earliest and most strategically important decisions on any major engineering construction project is determining the workforce engagement model that will underpin mobilisation and project delivery.

Within the UK engineering construction industry, this often becomes a choice between operating under the National Agreement for the Engineering Construction Industry (NAECI), commonly known as the 'Blue Book', or adopting an alternative engagement model. Whilst discussions frequently focus on labour cost, the reality is usually far more complex.

From an Industrial Relations perspective, the chosen approach can have a significant influence on workforce stability, productivity, mobilisation timescales, industrial relations risk and, ultimately, overall project certainty.

Understanding the Options

NAECI remains the predominant collective agreement across much of the UK engineering construction sector, particularly on major energy, petrochemical, nuclear and infrastructure projects, as well as long-term repair and maintenance sites.

Within heavily unionised environments it provides a well-established framework governing pay, grading structures, working hours, allowances, welfare arrangements, dispute resolution procedures and workforce engagement. Its familiarity gives both employers and trade unions a common reference point from which projects can mobilise.

Not every project, however, chooses to operate directly under NAECI. Some clients and principal contractors adopt alternative arrangements through bespoke Working Rule Agreements (WRAs), Staff Partnership Agreements (SPAs) or non-union direct engagement models. These approaches can offer greater flexibility and may better suit the commercial objectives of a particular project, but they also require careful planning and a clear understanding of the Industrial Relations environment in which they will operate.

Industrial Relations Begins Before Mobilisation

One of the most common mistakes I have encountered is treating the workforce engagement model as primarily a commercial or procurement decision.

In practice, it should be regarded as a fundamental element of project risk management from the earliest stages of mobilisation. The choice of engagement model should be informed by a thorough understanding of the labour market rather than simply the terms and conditions an employer wishes to offer.

Questions such as the prevailing expectations of the local workforce, the level of unionisation within the region, the availability of skilled labour, competition from neighbouring projects and the likely reliance on travelling workers all influence whether a proposed engagement model is likely to succeed. Equally important is understanding how agency labour will be managed, what workforce engagement structures will be established and the overall Industrial Relations climate surrounding the project.

These are not simply Human Resources considerations; they are factors that can materially affect mobilisation, productivity and project delivery.

Cost Versus Certainty

It is often assumed that moving away from NAECI will automatically reduce labour costs. My experience suggests the reality is rather different.

Whilst non-NAECI arrangements may initially appear commercially attractive, they can introduce uncertainty around labour attraction and retention, recruitment, workforce mobilisation and longer-term pay alignment pressures. Where projects are competing for limited numbers of skilled tradespeople and supervisors, the perceived attractiveness of the overall employment package frequently becomes just as important as the headline rate of pay.

Conversely, operating within an established collective agreement can provide greater certainty from the outset, particularly where workforce expectations have already been shaped by longstanding industry practice.

Workforce Engagement Matters

Whichever engagement model is adopted, meaningful workforce engagement remains essential.

Even where projects operate outside formal collective bargaining arrangements, employees still expect to be listened to, consulted and treated fairly. Establishing credible mechanisms for communication, consultation and resolving concerns at an early stage can make a significant contribution to workforce confidence and project stability.

Where these arrangements are absent, relatively small issues can quickly develop into recruitment difficulties, increased labour turnover, unofficial industrial action or declining productivity. Ultimately, the workforce itself determines whether an engagement model is viewed as fair, competitive and sustainable.

There Is No Universal Solution

There is no universally correct answer to the NAECI versus non-NAECI debate. Every project has its own commercial objectives, client requirements and workforce challenges.

What is clear, however, is that workforce engagement strategy should never be treated as an afterthought. Projects that invest time in understanding their Industrial Relations environment and develop a realistic engagement strategy from the outset are typically far better placed to achieve stable mobilisation, workforce continuity and greater certainty throughout project delivery.

 

For further information regarding Industrial Relations strategy, Working Rule Agreements, workforce engagement, or project mobilisation support, please contact Halbonisa IR Solutions.