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

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 Point C

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,[47] with around 25,000 jobs being created on site over the lifetime of the plant.[48] 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".[49] 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".[50] GMB claimed that it will "[guarantee] that the signatory unions will be provided with the necessary facilities to ensure workers are treated fairly"[51], while Steve Murphy, UCATT General Secretary, claimed that the agreement would act as the "blueprint for all major future construction projects".[52]

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).[53] 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.[54] 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".[55] 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 contractors—100% engagement".[56]

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.[57] 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.[58] 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.[59]

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 expecting".[60] Kevin Coyne stated that the provision to report anonymously acted as a "safeguard" for workers.[61].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".[62] 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.[63]

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 employment

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 agency.[64] Agency 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 them".[65] Bernard 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.[66]

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 the week.[67]

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.[68] 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".[69] 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".[70]

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 sector.

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,[71] essentially offering them the choice of accepting the terms of the Common Framework Agreement or not getting the contract.[72]

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 "absolutely replicable".[73] 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.[74] 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.[75] 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 Back

48, p.7 Back

49   Ev 114  Back

50 Back

51 Back

52   ibid.  Back

53   Q3154 Back

54   Q3183 Back

55   Q3187 Back

56   Q3529 Back

57   Blacklisting in Employment: Interim Report, p 5  Back

58   Q3517 Back

59   Q3171 Back

60   ibid. Back

61   Q3540 Back

62   Q3539 Back

63   Q3540, Q3174 Back

64 Back

65   Q3512 Back

66   Q3541 Back

67   Q3517 Back

68   Q3194 Back

69   Q3569 Back

70   ibid. Back

71   Q3198 Back

72   Q3545 Back

73   Q3199 Back

74   Q3524 Back

75   Q3544 Back

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Prepared 14 March 2014