Blacklisting in Employment

Written evidence submitted by Balfour Beatty

1.1 Balfour Beatty (www.balfourbeatty.com), founded by George Balfour, a Scots mechanical engineer, and Andrew Beatty, an English chartered accountant in 1909, is a world-class infrastructure group with capabilities in professional services, construction services, support services and infrastructure investments.

1.2 Key infrastructure markets in the UK include transportation (roads, rail and airports); social infrastructure (education, specialist healthcare, and various types of accommodation); utilities (water, gas and power transmission and generation) and commercial (offices, leisure and retail).

1.3 The Group delivers services essential to the development, creation and care of these infrastructure assets including project design, financing and management, engineering and construction, and facilities management services.

1.4. Balfour Beatty employs 50,000 people around the world, of whom 30,000 are employed in the UK.

Our Association with The Consulting Association prior to 2009

2.1 Balfour Beatty acknowledges using the services of The Consulting Association ("TCA") up until 2009 to carry out reference checks on employees in the construction industry. We regret this. It should not have happened and we apologise to the workers and families who may have been adversely affected over the years by the blacklist. We appreciate that this practice may have caused grievances for some individuals who were the subject of TCA reference checks and we are sorry for this.

2.2 We recognise that in this instance we fell short of the ethical standards we set for ourselves. We try at all times to comply with the law but if the Courts determine that we have not done so in our dealings with TCA then of course we acknowledge that compensation may be due.

2.3 Whilst not trying to justify our actions, the reason for our involvement with TCA was to seek to mitigate and prevent any disruption caused on our construction sites throughout the UK by unofficial and unjustified industrial action. This type of action was prevalent for decades and was a symptom of an extremely difficult and turbulent industrial relations climate which had an adverse effect not only on our company but also our industry and the country, as a whole.

2.4 That said, we recognise that we were slow to move with changing times and public expectations in the area of data privacy.

2.5 We have never set out to attack or suppress lawful Union activity or Union membership. Quite the reverse. We have always enjoyed good relations with Unite, GMB and other industry unions and we regret that our involvement with TCA has affected those relationships.

The ICO’s Investigation in 2009

3.1 We co-operated fully with the Information Commissioner (ICO) in his investigation in 2009.

3.2 Following receipt of the ICO’s Enforcement Notices in 2009, we undertook steps to address the shortcomings revealed in our Data Protection practices.

3.3 This included the introduction of a Group-wide Data Protection Policy and a revised ethical Code of Conduct, both introduced in 2009.

3.4 The Code of Conduct includes a section on Protecting Personal Information which expressly includes a prohibition on:

o The use or support of databases of "blacklisted" people or the supply of information to such databases; and

o Checking references for job applicants without first obtaining consent.

3.5 Since these matters were first raised by the ICO in 2009:

o We have ceased all contact with Ian Kerr or TCA

o There is no evidence that any data previously received from the TCA was acted upon by any operating company

o There is no evidence of any breach of our Code of Conduct requirements, as outlined above.

3.6 Any breach of our Code of Conduct is a disciplinary offence. Every allegation of breach is investigated fully, taken very seriously and action taken where required.

3.7 Since these matters were first raised by the ICO with Balfour Beatty in 2009 we have not been involved in, nor have we any knowledge of, continued information sharing, either directly between companies or through intermediaries such as TCA.

3.8 Balfour Beatty does not engage in any form of blacklisting and we are committed to ensuring that robust internal controls and processes are maintained which ensure that this practice is never used by our Company.

Health & Safety

4.1 We are particularly concerned to note suggestions made to the Committee linking the Consulting Services Association database to deteriorating safety performance on worksites. That was not the position on Balfour Beatty sites and we have seen no evidence that Balfour Beatty workers were ever blacklisted for raising genuine health and safety concerns.

4.2 Operating safely and continuously improving safety performance is critical to any business which aspires to a sustainable long term future and it is particularly important at Balfour Beatty. Nothing we do is so important that it cannot be done safely.

4.3 Our policy is to create an environment in which no one is harmed and where even the risk of harm is eliminated. We are proud of our recent success and track record as industry leaders in safety. Since the turn of the century Balfour Beatty and the wider UK construction industry have focussed strongly and made major strides in improving safety in the workplace. For example, in February 2001, at the construction industry summit, the industry set itself targets for improvements to its health and safety record and Balfour Beatty businesses have, over the last decade, introduced site-based campaigns such as "Safe on Site", "Make Safety Personal" and "Take CARE".

4.4 In 2008, these were joined by our "Zero Harm" global campaign which is designed to eliminate the likelihood of death or serious injury as a result of our operations.

4.5 All of these are observation and intervention-based programmes. They positively promote and in fact rely on our workforce speaking up and reporting unsafe acts and conditions and becoming personally involved along with the company in maintaining safety in the workplace.

4.6 As an indication of the level of engagement in these programmes, in the month of September 2012 alone, there were over 2,000 interventions by workers in our Regional Civil Engineering business.

4.7 While there is still a long way to go, these policies and programmes have resulted in a significant improvement in our safety performance, as illustrated in the table set out below. This shows that in the decade to 2012, our Accident Frequency Rate in our UK construction services businesses has been cut to less than one-half of the 2002 position while, in the same period, the number of hours worked in these businesses has more than doubled. In the period for which we have records, our AFR for our Scottish based operations is (apart from 2009) lower than our UK-wide AFR:

4.8 Since 2009, these programmes have been supplemented by our employee whistle-blowing programme called "Listen-Up", through which employees are invited to report - anonymously if required - ethical and safety concerns direct to senior management. All reports are investigated and findings are communicated back to the informant where anonymity does not prevent it.

Ian Kerr

5.1 We would like to take this opportunity to place on the record our sincere condolences and sympathy to Ian Kerr’s wife and family on his sudden death last December.

5.2 With reference to Mr Kerr’s evidence to the Committee on 27 November, we wish to confirm that Balfour Beatty did not contribute to the paying of Mr Kerr’s fine imposed by the Court. Moreover, we were not asked to contribute and would have refused if we had been.

Remedial action

6.1 Recognising that this was an industry-wide problem, Balfour Beatty believes that an industry-wide solution is required. We believe that the whole industry needs to focus its attention on the business practices which are best in class. To this end, we have proposed the creation of a Business Practices Committee ("BPC") of the UK Contractors Group, (chaired by Balfour Beatty’s Mike Peasland) to focus initially on establishing a Code of Conduct for our industry to cement across our industry best in class business practices in full compliance with privacy and data protection laws. Over time, the BPC would also seek to identify and pre-empt other compliance challenges and risks emerging in the UK construction industry.

March 2013