Blacklisting in Employment: addressing the crimes of the past; moving towards best practice - Scottish Affairs Committee Contents

2  Addressing the crimes of the past

Compensation scheme

8. In our previous report, we presented evidence which identified that a number of major construction companies had been members of The Consulting Association (TCA), and paid for the 'name checking' services provided by them.[11] On 10 October 2013, eight of those companies, who are due to face litigation in the High Court (Sir Robert McAlpine, Balfour Beatty, Carillion, Costain, Kier, Laing O'Rourke, Skanska and Vinci), announced plans to develop a scheme that will pay compensation to those workers whose names were held by TCA.[12]

9. We have written to all the companies that have been implicated in using the services of TCA, but who have yet to sign up to the scheme to ask for the reasons why they have not signed up. Several companies have replied, indicating that they are waiting for the final details of the scheme to emerge before making a decision.[13] Others have denied making any use of TCA's blacklisting service,[14] or were not contacted about signing up to the scheme.[15] Copies of the replies received to date have been published on the Committee's website.[16] We will review all responses in due course.

10. The proposed details of The Construction Workers Compensation Scheme (TCWCS) were announced in November 2013:

·  Compensation payments are anticipated to start from a base of £1,000 per person up to a maximum of £100,000 per person.

·  There will be no admission of liability by the companies involved in the scheme.

·  Workers taking part will be required to drop all other legal claims.

·  There will be a 'twin track approach', with the fast-track offering workers fixed amounts depending on the information contained on their blacklisting file. A longer review would examine losses suffered by the worker. The latter process is intended for more serious cases.

·  There is no intention to hold hearings into blacklisted workers' claims. The majority of cases will be resolved on paper. [17]

11. A spokesperson for the scheme claimed that it was designed to "provide affected workers with a genuine and preferable alternative to High Court action by removing many of the hurdles that would be faced through litigation and offering much faster access to compensation payments".[18]

12. However, representatives of The Blacklist Support Group and a number of trade unions representing construction workers reacted angrily to the proposed scheme.[19] Steve Murphy, General Secretary, UCATT, described it as "a complete travesty of justice" on the grounds that the levels of compensation suggested were inadequate and that the companies involved refused to accept liability.[20] Phil Whitehurst, National Officer for Construction, GMB, told us that "[contractors] are after a cheap package to vindicate what they have done" and "putting a gagging order on it as well is an absolute shambles".[21] Bernard McAuley, National Officer for Construction, Unite, commented that the way that the construction companies have "tried to exclude the trade unions and deal directly with individuals clearly shows contempt".[22]

13. On 3 February 2014, the first full round table talks for TCWCS took place. Dave Smith, of the Blacklist Support Group criticised the offer of £1,000 compensation as a "fast track alternative to justice" and said that the ball was now firmly in the court of the employers to respond to the demands of the employees. No agreement was reached at these talks.[23]

Identifying the victim

14. One of the key concerns raised in relation to the scheme was about the criteria for individual eligibility for receiving compensation, and how eligible individuals would be identified and notified. Blacklisting is a covert procedure, and therefore there are a number of complex issues involved in identifying who should receive compensation. Many of those who are on the blacklist are unaware that this is the case, and so would not see any reason to claim. In November 2013, the ICO took steps to remedy this by using information that it had received from the Department for Work and Pensions to write to approximately 1,200 individuals on TCA's blacklist.[24] In an update received on 31 January 2014, the ICO told us that it had since contacted a further 500 individuals. It had also responded to 1,500 individual subject access requests.[25] It remains unclear how many individuals were blacklisted and we are concerned that steps taken to date have not met with the level of success that we believe is necessary.

15. Furthermore, others cannot be contacted as they have died since the list was compiled. The ICO has identified approximately 250 such cases to date.[26] This raises the question of whether compensation is due to dependants. Suffering as a result of blacklisting goes beyond those who are named directly on any list and can 'prove' that they suffered employment discrimination as a direct result of this.[27] Witnesses suggested that the scope of those who can claim compensation should be broad. Jane Hutt AM, Minister for Finance, Welsh Government, pointed out that:

We talk about the "victim" of blacklisting. However, there could be a case whereby it is not just the member of the workforce or the person who did not get the job who is affected, but the family as seems to me, very clearly, that it is "victims", through loss of earnings or distress caused.[28]

16. We welcome the steps taken by the eight construction companies who have set up a compensation scheme for victims of blacklisting. We understand that discussions are underway between interested parties so will not comment on either the details of the scheme or the progress of the negotiations at this stage. However, we would expect that the key principles of apology, adequate compensation - not only for possible loss of earnings - and employee assistance for those still of working age, will form key parts of any agreed scheme.

17. All the information available to us suggests that most of the firms involved would have continued to use TCA and its sinister and odious practices had they not been caught. This view was epitomised by the appalling performance at the Committee by Stephen Ratcliffe, Director, UK Contractors.[29] In these circumstances, the onus lies with the construction firms involved to clearly and unequivocally demonstrate that their repentance is genuine. This will not be achieved by parsimony, whether of cash or of spirit.

18. We are also aware of fears that, in the event of a disagreement between the negotiators, there will be a unilateral introduction of a compensation scheme. We believe that, to be accepted as valid, any compensation scheme will have to be agreed between representatives of the sinners and representatives of the sufferers. We would regard any unilateral introduction of a compensation scheme to be an act of bad faith by those involved, likely to be motivated by a desire to minimise financial and reputational damage rather than being a genuine attempt to address the crimes of the past.

19. We welcome the efforts of the ICO which have been made to date, particularly its work with the DWP, to identify and contact those individuals who were blacklisted and may be eligible to receive compensation. However, we are concerned that there may be many more individuals who may need to be contacted. We recommend that all parties involved be brought together in order to discuss how best more victims can be contacted. We also endorse the view of the Welsh Government and others that the families of victims should also be eligible for compensation when the original victim has passed away.

11   Our previous report listed these companies: Amey, AMEC, BAM Nuttall, B Sunley and Sons,Balfour Beatty, Ballas,CB&I, Cleveland Bridge UK Ltd, Costain, Crown House (Carillion/Tarmac), Diamond M&E, Dudley Bower & Co Ltd, EMCOR (UK) plc, Haden Young, John Mowlem Ltd, Lovell Construction Ltd, Miller Construction Limited, Morgan Sindall, Morrison Construction Group, N G Bailey, Renew Holdings plc Shepherd Engineering Services, Sias Building Services, Spie Matthew Hall. Sunley Holdings plc, Taylor Wimpey, Turiff Construction, Tysons Contractors, Walter Llewelyn and Sons, Whessoe, Wilmott Dixon Ltc, and Vinci  

12 Back

13   BAM Nuttall, EMCOR, NG Bailey Back

14   Amey, Shepherd Group, Whessoe, Renew Holdings, AMEC, Miller Construction, Galliford Try (on behalf of Morrison Construction Group), Spie Matthew Hall, Taylor Wimpey Back

15   Willmott Dixon Back

16 Back

17  Back

18   ibid. Back

19  Back

20  Back

21   Q3576 Back

22   Q3577 Back

23 Back

24 Back

25   Letter to the Chair from the Deputy Commissioner, ICO, 31 January 2014 Back

26   ibid. Back

27   Q3577 Back

28   Q3104 Back

29   Qq 2689-2948 Back

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Prepared 14 March 2014