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

 

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

In the UK engineering construction sector, this often becomes a choice between a NAECI-aligned model and a non-NAECI approach. While the discussion is frequently framed in terms of labour cost, the reality is usually far more nuanced.

From an Industrial Relations perspective, the chosen model can significantly influence workforce stability, productivity, mobilisation timelines, industrial relations risk, and ultimately overall project certainty.

Understanding the Context

The National Agreement for the Engineering Construction Industry (NAECI) (aka 'The Blue Book') remains the dominant collective agreement across much of the UK engineering construction sector, particularly on large-scale energy, petrochemical, nuclear, and infrastructure projects, as well as long term repair & maintenance sites.

In heavily unionised environments, NAECI provides a recognised and established framework covering areas such as:

  • rates of pay,

  • allowances,

  • grading structures,

  • working hours,

  • dispute resolution procedures,

  • welfare arrangements,

  • and workforce engagement mechanisms.

However, not all projects choose to operate directly under NAECI. Some clients, and principal contractors instead pursue alternative workforce engagement arrangements, often through:

  • bespoke Working Rule Agreements (WRAs),

  • Staff Partnership Agreements (SPAs),

  • or non-union direct engagement models.

These approaches can sometimes offer greater flexibility, but they also require careful consideration and planning.

The Importance of Early IR Strategy

In my experience, one of the most common mistakes is treating workforce engagement strategy as a procurement or commercial issue only.

In reality, labour engagement models should be considered as a core project risk management issue from the earliest mobilisation stages.

Questions that should be considered include:

  • What are the prevailing labour market expectations within the region?

  • Is the local labour market predominantly NAECI-orientated?

  • What are competitors on nearby projects paying?

  • How unionised is the local workforce?

  • Will the project require large numbers of travelling workers?

  • How will agency labour be managed?

  • What workforce engagement structures will be required?

  • What is the likely industrial relations temperature of the surrounding area?

The answers to these questions can materially affect both project delivery and workforce stability.

Cost vs Certainty

A common assumption is that moving away from NAECI will automatically reduce labour costs. In practice, this is not always the case.

While non-NAECI models may initially appear commercially attractive, they can sometimes introduce uncertainty regarding:

  • labour attraction and retention,

  • market competitiveness,

  • workforce mobilisation speed,

  • industrial relations stability,

  • and pay alignment pressures during delivery.

Conversely, NAECI-aligned approaches can provide a more predictable and stable framework from the outset, particularly in highly unionised regions or sectors with established labour expectations.

This is especially relevant on projects competing for limited numbers of skilled trades and supervisors within an already constrained labour market.

Workforce Engagement and Industrial Stability

Whichever route is selected, workforce engagement remains critical.

Even within non-union environments, there is increasing value in establishing credible workforce engagement mechanisms, including:

  • workforce forums,

  • consultation arrangements,

  • transparent communications,

  • and clearly defined dispute resolution procedures.

Where workforce concerns are not addressed early and credibly, project mobilisation can quickly become vulnerable to:

  • labour turnover,

  • recruitment difficulties,

  • unofficial industrial action,

  • productivity challenges,

  • and reputational issues.

The workforce itself will often determine whether an engagement model is perceived as fair, competitive, and sustainable.

Conclusion

There is no universally correct answer to the NAECI vs non-NAECI question. Much depends on the nature of the project, the labour market, the client’s objectives, and the wider industrial relations environment.

However, what is clear is that workforce engagement strategy should never be treated as an afterthought.

Projects that invest early in a realistic and well-considered Industrial Relations strategy are typically far better positioned to achieve stable mobilisation, workforce continuity, and operational certainty throughout delivery.

 

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