Blacklisting in employment

Written evidence submitted by Carillion


1. Carillion plc welcomes the opportunity to provide a written submission to the Scottish Affairs Committee enquiry into blacklisting in Scotland. Carillion plc does not condone or engage in blacklisting and takes such accusations very seriously.

2. In order to put our comments into context, it may be helpful to outline briefly our role across the UK.

3. Carillion plc was created in 1999 by a demerger from Tarmac plc. Headquartered in Wolverhampton, Carillion operates internationally, employing 45,000 people globally and 20,000 in the UK.

4. We provide:

a. All the facilities management, maintenance and other services needed to keep buildings, particularly large, complex property estates, fully operational for public and private sector customers.

b. Energy efficiency services for domestic, commercial and public sector customers. We provide asset management and maintenance services for road and railway infrastructure and for utilities, including telecommunications, water, electricity and gas.

c. Public Private Partnership projects (PPP) for schools, hospitals, prisons, defence and other Government accommodation, and also for roads and railways.

d. A strong and selective construction services capability, which plays a key role in providing integrated solutions for PPP projects and for our support services customers.

e. Carillion is the largest employer of apprentices in the construction sector, and one of the largest in the UK, with over 2,000 apprentices being trained at any one time. With a UK network of 13 construction apprentice training centres, we are also one of the largest training providers, and provide courses not only to employees but to the wider community.

f. Since 2008, Carillion Training Services has worked in partnership with TIGERS (Training Initiatives Generating Effective Results in Scotland) to create more than 400 modern apprenticeships for young people in the construction industry. In the past year, Carillion has also worked on a major capital project to design and re-build a new prison (HMP Low-Moss), with the Carillion Craft Centre in Bishopbriggs, East Dunbartonshire supplying up to 20 apprentices at any one time during the peak rebuilding period.

5. After the demerger, Carillion plc acquired a number of other companies, including Mowlem plc (2006), Alfred McAlpine plc (2008) and eaga plc (2011).

6. Carillion plc is strongly committed to embodying its values in every aspect of its work. These are: openness; collaboration; mutual dependency; professional delivery; innovation; and sustainable profit growth. The decision to make this submission to the Scottish Affairs Committee was taken in part because of Carillion’s strong commitment to openness, honesty and transparency.

Submission response

7. Testimony previously supplied to this committee has made a number of allegations about Carillion’s historic involvement with the Consulting Association ("the CA"). These are addressed in this submission. Carillion is grateful for the opportunity to clarify the facts and make its position a matter of public record.

8. Carillion is offering this information and detail to the Scottish Affairs Committee in the hope that it will assist the Committee with its inquiry. This submission provides factual information about what Carillion plc knows about the CA and about the interaction between a Carillion subsidiary and the CA database until early 2004.

9. It is important that this submission explains that what Carillion can tell the Committee is constrained by privilege attaching to documentation Carillion has seen in an Employment Tribunal by Mr Dave Smith, heard earlier in 2012. Mr Smith obtained, without any objection from Carillion, an order of the Tribunal requesting disclosure by the Information Commissioner’s Office ("ICO") of extracts from the CA database, strictly for the purpose in which the order was made. To use extracted data for any purpose of the proceedings other than those Tribunal proceedings may be a contempt of court.

10. In any event, we would stress that Carillion has not seen the full Consulting Association database.

11. As much as Carillion desires to refer the Committee to detailed data it has seen via the Tribunal proceedings - especially given that it has been used by others to present misleading claims to this Committee - it cannot abuse the legal privilege attached to this data. At the present time our submission is therefore limited by this constraint on what we can legally say.

12. Carillion would therefore urge the Committee to seek access to the full database held by ICO (redacted as may be deemed appropriate). If the Committee is able to gain access to and share the full database, we will be able to make a more complete response to the Committee’s enquiries. Until then, Carillion cannot address questions about the detailed content of the database, and what that shows about the nature and use of the data.

13. The submission also offers perspectives about the historical context and the issues affecting the construction sector in the late 1990s and early 2000s. These issues are described later in this submission.

The Consulting Association

14. In 2009, a raid by the ICO on the premises of the CA uncovered a manually operated database containing data concerning 3,212 people.

15. It is understood that for a fee, members could access a range of CA services. One of these services allowed members to cross-reference names of potential workers with CA’s database.

16. Information about potentially disruptive behaviour (including criminal offences such as theft, violent or threatening behaviour, and unlawful strike activity) was recorded in the database. Carillion’s understanding is that that information contained in the database was not generally focused on union affiliation, but rather on the identification of disruptive and/or unlawful behaviour.

17. Membership of a trade union was emphatically not a reason to avoid employing a worker. Every worker with the relevant Carillion subsidiary business unit during the period in question was required to be Joint Industry Board ("JIB") registered. Under the JIB agreement, most, if not all, JIB registered tradesmen were understood to be trade union members.

18. The CA also organised periodic meetings for members to network and discuss best practice in various industry sectors. Such meetings were unrelated to the database or to allegations of blacklisting.

Blacklisting and the law

19. After the ICO investigation, legislation was brought into force to make blacklisting on the basis of union membership illegal (Employment Relations Act 1999 (Blacklists) Regulations 2010). These Regulations do not have retrospective effect.

20. The practice of sharing personal data with third parties was an offence by the Consulting Association under the Data Protection Act ("DPA") 1998 (but the DPA restrictions were not fully extended to manually operated databases such as that generated by the CA until 2001).

21. It was (and remains) unlawful to refuse employment or subject to any detriment on the grounds of trade union membership (Trade Unions and Labour Relations (Consolidation) Act 1992).

Carillion and the Consulting Association

22. Carillion plc was not involved with the CA. Senior management was not aware of any use of the CA’s database. If it had been, then the practice would have been banned. However, following on-going internal investigations since 2009, when the ICO investigation brought the referencing database to light, Carillion can confirm that one of its then business units, Crown House Engineering ("CHE") used the database until early 2004. A subsidiary of another business (Mowlem plc) used the database before Carillion acquired the group in 2006.

23. We understand that CHE stopped using the CA database almost a decade ago because it was felt to be wrong. Carillion categorically denies the assertion that it made use of CA blacklists until the date of the ICO raid in 2009. This claim is based on a single invoice for £56.46 for attendance at a CA security meeting to discuss site security issues in May 2008. This was not connected in any way with blacklisting activity.

24. Carillion’s investigation of events indicates that CA security meetings were a forum for managers from a number of construction companies to discuss general security issues on site and how to combat them (for example, spates of thefts from sites in particular locations, or how to make sites more secure). Carillion understands that companies did not share information about specific individuals at such meetings.

Crown House Engineering

25. Carillion business unit, CHE, subscribed to the Consulting Association. CHE was a business unit within Carillion Construction Limited ("CCL"). The CA’s relationship was with Crown House managers. This subscription was proactively stopped in early 2004 by a Mrs Liz Keates, who was uncomfortable about using it.

26. CHE was a Mechanical and Electrical Engineering ("M&E") business acquired by Tarmac in 1992 and which became part of Carillon through the demerger of Tarmac in 1999. It was a separate and distinct business. The five geographical divisions of CHE also operated independently of each other to a significant extent. CCL sold CHE in 2004 to the newly incorporated company, Crown House Technologies Limited, part of the Laing O’Rourke Group. Any renewed involvement by CHE with the CA after the 2004 sale is of no relevance to Carillion.

27. Mrs Liz Keates, currently Head of Employee Relations at Carillion plc, was one of the employees responsible for accessing the CA database at CHE to obtain referencing information when it was owned by Carillion. During the period in question, Mrs Keates was an Employee Relations Manager at CHE and inherited responsibility for consulting the database from a superior, Mr Kevin Gorman.

28. By 2004, Mrs Keates was concerned as to the CA’s methods and how it acquired information covertly. She decided that the referencing service should no longer be used.

29. CHE used the CA referencing service to check the backgrounds of potential workers during the period in question. The nature of CHE’s work meant that the company’s Labour Managers needed to source large numbers of qualified M&E tradesmen on a weekly basis. The Labour Managers’ forecasts for their staffing requirements were submitted in advance, and actual requirements often differed substantially from original estimates. Carillion understands that many more names were therefore cross-referenced with the CA database than would ever have been required or employed by CHE.

Why did the blacklist exist and why did Crown House use it?

30. The M&E industry had serious employment relations problems concerning electricians during the period in question.

31. At the time, the separate divisions of CHE in England and Scotland had large, directly employed workforces of tradesmen, particularly electricians. In Scotland, CHE specialised in delivering small-scale, complex projects and more maintenance projects than the other four geographical divisions. As a result, Carillion’s internal investigation has produced little evidence that CHE used the database in Scotland. It appears that the database was primarily consulted in England and Wales, where CHE undertook larger projects.

32. A number of militant electricians, where employed in significant numbers and on big projects, were engaging in unlawful, costly and damaging walkouts/industrial action. The Committee will probably not be surprised that in relation to such unofficial action, perpetrated without the authority or approval of recognised trade unions, there was suspected or actually reported sabotage, threatening behaviour and intimidation. Such disputes could cost millions of pounds in contractual penalties, and of course impacted workers who may have been victims of intimidation. Such behaviour was obviously of serious concern to companies across the construction sector.

33. CHE’s use of the database was emphatically not to deny trade union members and activists employment. Carillion was not part of an anti-union conspiracy, nor does it believe that there was such a conspiracy. Carillion currently has national recognition arrangements in place with a number of unions, including UNISON, Unite, RMT, and the TSSA, and enjoys constructive working relationships with them.

34. There is evidence to suggest that at least one union was aware of the CA database and may also have supplied information to it, indicating that they condoned its use to screen out extremist elements operating without official union sanction. The evidence of Mr Alan Wainwright, an ex-CHE employee, was influential in bringing about the ICO investigation into the CA in 2009. Mr Wainwright published the names of 500 individuals known to be on the CA database on his blog in 2006. Mr Wainwright said that he supplied this evidence to the General Secretary of Amicus (now Unite) in the same year.

Carillion’s response to evidence presented by Mr Dave Smith

35. Testimony presented to the Committee by Mr Dave Smith made several erroneous claims about Carillion plc. Detailed comment cannot be made as legal proceedings brought by Mr Smith are not yet concluded, however we would like to take the opportunity to clarify a number of key points as a matter of public record.

36. Mr Smith’s assertions are linked to his attempt to claim against Carillion in employment tribunal (alongside approximately 22 other companies). His claims (and hence his personal experiences as related to the Committee) relate to Schal, a Tarmac company, and John Mowlem Construction plc, both relating to the period 1998-1999. This predates the creation of Carillion and is some eight years before Carillion acquired John Mowlem. Mr Smith withdrew his claim in that tribunal against Carillion itself.

37. Schal was a construction management company that supervised sites. It did not employ or supervise any tradesmen. Mr Smith has never been an employee of Carillion plc, its subsidiaries or its predecessor, Tarmac. However, Mr Smith took part in and helped to organise unlawful industrial action against Schal following his dismissal by the sub-contractor that engaged him. He cited health and safety concerns on the project, but did not have union endorsement for this action. Tarmac was concerned by this unlawful activity, including unofficial secondary picketing, on a Schal supervised site. He has never been a union safety representative for Tarmac or Carillion employees.

Carillion’s commitment to health and safety

38. One of the gravest concerns is the allegation against Carillion’s Health and Safety performance. Carillion plc is, and has always been, very strongly committed to maintaining the highest standards of health and safety. Carillion has one of the best Health & Safety records in the construction industry. Within our construction business, Carillion policies and frameworks have contributed to a culture of continuous improvement.

39. For example:

a. All businesses and contracts have Safety Action Groups, with members drawn from the workforce, which review local safety performance and recommend changes to improve and promote safety.

b. We currently work with approximately 600 Carillion Health and Safety representatives across our UK construction businesses, including approximately 60 in Scotland.

c. Carillion’s Don’t Walk By engagement programme encourages awareness and openness, with workers prompted to spot things that are not as they should be and take direct actions themselves, or report it to Carillion. Don’t Walk By has seen great success in identifying and addressing potential hazards and risks.

d. Each of Carillion’s construction businesses in the UK has a weekly Health and Safety call involving the Managing Director of the business and other operational directors. These meetings review performance and any incidents occurring in the previous week, and determine steps to address any issues.

e. Monthly briefings are issued to all construction businesses, and are underpinned by specific action plans.

f. Occupational health services are provided for those whose jobs expose them to any significant health risks, to monitor health and ensure that the right precautions are being taken to protect health.

g. Senior managers are required to be qualified to a minimum standard of NEBOSH General Certificate. In 2012, 481 of our Senior Managers completed their NEBOSH qualification, including approximately 65 in Scotland.

40. According to statistics gathered by the Health and Safety Executive (HSE), in 2010/11 there were 50 fatal injuries to workers in the construction industry, compared to a five year average of 61 per year. Fatalities have fallen by two thirds over the last 20 years. Reported non-fatal injuries have fallen by more than a third over the past four years. It would therefore be a mistake to believe, as has been suggested, that health and safety conditions are deteriorating in the construction sector - they are actually improving. The HSE statistics are available at

41. Carillion’s own Accident Frequency Rate (AFR) is significantly better than the industry average, as demonstrated by the chart below. We also enclose a timeline to show how the AFR has continued to fall in line with the initiatives outlined above.

42. Chart comparing Carillion AFR with industry average, 2004 - 2011

43. Timeline showing AFR decline, 2002-2011

Concluding remarks

44. Carillon does not tolerate blacklisting at any of our sites, nor does it engage in blacklisting. To suggest otherwise is simply wrong, and any allegations of such practices are taken extremely seriously. Carillion does not condone the practice either within the company or its subsidiaries.

45. It has been eight years since the Consulting Association referencing service was last used by a business unit of a Carillion subsidiary, which acted as a user (rather than as a supplier) of data.

46. However, it is important to understand that any involvement with the referencing database was proactively and independently stopped six years before such activity became unlawful. The practice, although clearly not to be condoned, was a specific response to a very difficult industrial relations climate at the time, with unlawful disruption caused by a small minority outside official union channels in addition to bullying, coercion, and site sabotage.

47. The assertion that Carillion was at the centre of a blacklisting conspiracy, and that it was responsible for a significant amount of blacklisting activity is wholly untrue. The level of involvement was strictly limited and occurred many years ago - it deeply regrettable that it is being grossly exaggerated to suit unconnected agendas.

48. This submission has been produced to the best of our knowledge and is based on information derived from our own factual research and from observation. Upon discovering links to the CA, Carillion has made every possible effort to investigate what they amount to, as they run counter to its very strong values and ethics.

49. Carillion has sought to supply this information to set the record straight, set out the facts as we understand them, and explain the background and context to the use of the Consulting Association database in the past. Carillion hopes that this information is useful to the House of Commons Scottish Affairs Committee. We are happy to provide further information or clarification upon request.

September 2012

Prepared 25th January 2013