4 Towards best practice: employment
contracts in the private sector |
33. Addressing blacklisting solely through procurement
relies on contractors being truthful about their activities and
does little to protect the workforce once a contract has been
awarded. The current guidance in Scotland and Wales is also only
applicable in the public sector. However, we have also identified
a new model of best practice in employment contracts in the private
sector - which seeks to eradicate the potential for any blacklisting
of workers in the future.
EDF and trade unions at Hinkley
34. EDF Energy will lead a consortium in building
the new Hinkley Point C (HPC) nuclear power plant. It will cost
an estimated £16bn to build,
with around 25,000 jobs being created on site over the lifetime
of the plant. At
the peak of construction there will be approximately 5,600 workers
on site. Construction will begin in 2014.
35. In November 2013, it was announced that EDF Energy
and the Unite, GMB and UCATT Trade Unions had reached a major
new labour agreement for construction workers at the plant. The
Common Framework Agreement (CFA) was agreed through early engagement
between EDF Energy as the client, and the trade unions. In their
written evidence to the Committee, EDF confirmed that the Agreement
"specifically preclude[s] any form of blacklisting for both
EDF Energy and our contractors".
Kevin Coyne, National Officer for Energy and Utilities for Unite,
commented that the Agreement "sets a new benchmark for pay,
conditions and apprenticeships", and is "a cutting edge
agreement for a cutting edge new nuclear project at Hinkley Point".
GMB claimed that it will "[guarantee] that the signatory
unions will be provided with the necessary facilities to ensure
workers are treated fairly",
while Steve Murphy, UCATT General Secretary, claimed that the
agreement would act as the "blueprint for all major future
36. The CFA contains a number of provisions that
are intended to protect workers against blacklisting, including
the capacity for workers to report health and safety concerns
anonymously, a commitment to direct employment, and the establishment
of an employment brokerage for all jobs on the site. Ultimately
these should contribute to creating a culture in which the health
and safety of workers is of paramount importance, and workers
can report concerns without fear of being blacklisted.
37. To ensure that the CFA is deployed effectively,
EDF has established an Employment Affairs Unit (EAU).
The EAU will monitor and audit key points of the Agreement, including
the use of directly employed workers on the site (see below).
EDF told the Committee that there would be sanctions for contractors
if they break the terms of the Agreement, ranging from financial
penalties to removal from the project.
Nigel Cann, Construction Director for EDF at HPC, told us that
while there is not a list of fixed penalties, EDF accept that
they "have to make [the level of penalty] meaningful".
Phil Whitehurst, National Officer for Construction, Unite, told
us he was confident in the arrangements should a contractor engage
in blacklisting. He said: "it would go to the joint project
board, which would decide what course of action to take. Because
we are involved with the client, we can talk with the client about
our findings, and it is discussed with all the contractors100%
On-going monitoring and reporting
procedures for health and safety
38. There is a clear link between blacklisting and
poor health and safety standards in the construction industry.
Workers must be free to voice concerns about health and safety
on sites, and union shop stewards play a key role in this. Evidence
to our inquiry has clearly demonstrated that with union membership
comes the risk of being blacklisted, particularly if the union
member in question is responsible for raising health and safety
issues with clients/contractors.
As such we are concerned that protecting workers against blacklisting
should not begin and end at the procurement and recruitment stage.
There must be provisions in place to allow reporting of health
and safety concerns, and processes to encourage workers to make
use of these provisions and encourage an open culture.
39. Nigel Cann explained that an 'organisational
learning tool' has been put in place at HPC to allow workers to
raise issues. He explained:
We call them learning reports, but they are called
various things across industry. You can raise a report anonymously
or put your name to it. Every learning report raised is processed;
it goes to what we call a screening committee, which will look
at it. The reason it goes for screening is to see whether immediate
action needs to be taken, but every issue that is raised is processed.
40. To encourage workers to use this system, EDF
have been displaying issues that have been raised and the subsequent
action taken in a prominent position in the main canteen on site.
Reports can be anonymous, but Mr Cann explained that if workers
had chosen to put their names to them: "we did things like
learning report of the month, to encourage people so that they
knew that we had valued it both managerially and as the client,
we made visible the fact that that was the culture that we were
Kevin Coyne stated that the provision to report anonymously acted
as a "safeguard" for workers..However,
as reports will be audited through the Employment Affairs Unit,
Mr Coyne also pointed out that it would be possible to "understand
the reasons why somebody felt the need to report anonymously rather
than reporting openly".
This might indicate whether workers continued to feel that blacklisting
was a threat. However, both Mr Coyne and Barbara Jones, EDF's
Human Resources Director, also acknowledged that there could be
reasons why an employee would report anonymously that were not
related to fear of blacklisting.
41. It is essential that workers feel that they
are able to report potentially life threatening health and safety
concerns without fear. Adequate reporting systems are a vital
part of preventing the threat to workers of blacklisting and ensuring
a robust health and safety culture. We recognise that there will
be some variation in the exact systems used for different projects,
but recommend that reporting and monitoring systems included in
the EDF model should be incorporated into future public contracts
as standard practice.
Employment brokerage and direct
42. Construction firms that used TCA's blacklisting
service have previously claimed that they were not legally responsible
for blacklisted workers where the workers were employed via an
workers do not enjoy the same level of employment rights as directly
employed workers, and this includes protection against blacklisting
and discrimination on the basis of trade union membership. They
are also likely to be removed from the job if they voice concerns.
Bernard McAuley, National Officer for Construction for Unite,
told us that: "if anybody raises issues of health and safety
or about industrial relations on site, it means, in itself, that
they are no longer required on site because the agencies remove
McAuley, Kevin Coyne, Steve Murphy and Phil Whitehurst all told
us that they believe that direct employment is key to ensuring
the success of the HPC project Agreement.
43. The Common Framework Agreement recognises that
trade unions play a crucial role in ensuring high health and safety
standards, and witnesses explained to us that direct employment
is a precursor to creating a highly unionised workforce. Steve
Murphy explained the difficulties of encouraging non-directly
employed workers to engage with the trade unions:
They have absolutely no employment rights. If you
are doing [agency and payroll company work], it is desperation
to get a job. If you are walking to the factory gates or walking
up to that building site, your head is down and you do not want
to engage with anybody. I have seen that myself. People will not
talk to you; all they want to do is get the wage at the end of
44. EDF has made a commitment to direct employment
at the Hinkley Point site. As well as ensuring that all workers
benefit from the conditions of the Agreement, this commitment
brings with it a set of practices that protect workers against
blacklisting. Nigel Cann explained that EDF is committed to a
transparent recruitment process which all contractors must recruit
through, including contractors who bring in their own workforces.
Phil Whitehurst, Unite's National Office for Construction,
explained further: "there is an employment brokerage, where
everybody who applies for a job has to go through safety vetting
and everything, so everybody's applications will be monitored".
Applicants will also receive feedback on failed applications,
so that it is possible to see if there are patterns emerging in
people not getting work that might indicate blacklisting is taking
place. Kevin Coyne noted that this is "something that goes
on in every other sphere of industry, but never within the construction
industry. It is a really important process".
45. We recommend that direct employment and transparent
recruitment practices should be standard for all public sector
contracts in the construction industry, and will seek further
evidence on what measures would be necessary to ensure that this
is also standard practice in this industry within the private
46. Mr Cann told the Committee that as HPC is a nuclear
project, health and safety standards are far higher than in general
construction. EDF is also a very large client, and HPC a very
large project. These factors meant that EDF Energy has been able
to exert a high level of influence over negotiations with contractors,
essentially offering them the choice of accepting the terms of
the Common Framework Agreement or not getting the contract.
47. However, both EDF and the trade unions were convinced
that the relatively unusual circumstances on the HPC project should
not mean that the agreements reached are not replicable on other
projects. Barbara Jones, Human Resources Director, EDF, told us
that "the spirit in which it has been done" involves
joint working between the client, unions and contractors and is
The Trade Union representatives agreed, and stated that underpinning
the terms of the agreement was a willingness of behalf of EDF,
as the client, to engage meaningfully with them.
Steve Murphy also pointed out that the Government is the single
biggest client in the construction trade in the UK, accounting
for approximately 80% of all contracting.
It should therefore be able to exert a similarly high level of
influence over its contractors.
48. We regard the Common Framework Agreement between
EDF and the Trade Unions as the current best practice model of
employment in the construction industry. While we recognise that
specific terms may vary for different contracts, the HPC negotiations
provide a model of co-operation between clients, unions and contractors
that should be standard practice in negotiating conditions on
contracts involving public money. Engagement with the Trade Unions,
and the expectations placed on contractors as a result of this,
is of paramount importance if blacklisting is to be stamped out
and, ultimately, if high health and safety standards in the workplace
are to be upheld.
47 http://www.bbc.co.uk/news/business-24604218 Back
Ev 114 Back
Blacklisting in Employment: Interim Report, p 5 http://www.publications.parliament.uk/pa/cm201213/cmselect/cmscotaf/1071/1071.pdf
Q3540, Q3174 Back