Legal expert warns UK's North Sea industry risks suffering a "brain drain"


The North Sea has been pummeled by low oil prices (Source: Getty)

A legal expert warned employment law has left the UK's already embattled North Sea oil and gas sector at risk of a "brain drain".

Katie Williams, employment specialist and partner at Pinsent Masons, blamed the widespread use of contracts which stop individuals joining a potential competitor for anything up to 12 months after leaving a job.

"The net effect is that highly skilled workers could be forced out of the oil and gas industry and into another sector where it is easier to find a suitable job."

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"In the case of entrepreneurial individuals, it could deter them from starting-up a new business and stifle innovation, which is not something the oil and gas industry can afford at the current time," she added.

The Department of Business, Innovation and Skills has issued a ‘call for evidence’ on post-termination restrictions.

The legal rule is particularly troublesome for individuals who have lost their jobs as a result of the downturn in the oil and gas industry. Trade body Oil & Gas UK said in September that Britain's offshore oil sector has lost 65,000 jobs since oil prices started falling.

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“I’ve had cases where people who have been made redundant who are under a restrictive covenant, and have been prevented from taking on a similar job for 12 months," she said.

"This is clearly unfair as they find themselves in this position through no fault of their own and have a huge amount to offer a new employer, but they can’t do so because they fear it will be in breach of their employment contract."

Brent crude, the global benchmark, fell from over $110 per barrel in the middle of 2014, to multi-year lows of $28 in January. It's since recovered to hover around $49, as supply outages across the globe draw down the oversupply.

Tags: Oil prices