Blacklisting in Employment: Final Report - Scottish Affairs Contents

2  The Construction Workers Compensation Scheme

Blacklisting in the construction industry

6. During the course of our inquiry, we have presented evidence which showed 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.[10] 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.[11] Andrew Ridley-Barker, Managing Director, VINCI Construction noted that the motivation for TCWCS "came partly from this Committee calling for the construction industry to come together and establish a compensation scheme".[12]

7. In January 2014, we wrote to all the companies that were implicated in using the services of TCA, but who had yet to sign up to the scheme to ask for the reasons why they had not signed up. Several companies replied, indicating that they are waiting for the final details of the scheme to emerge before making a decision.[13] Others 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 have been published on the Committee's website.[16]

8. To date, no further companies have joined the scheme. We therefore wrote to the non-participating companies again on 25 February 2015, and expressed our concern at their lack of willingness to participate in the scheme. We asked that the companies outline their reasons for their non-participation and to detail what steps had been taken to remedy the previous behaviour of the company in relation to blacklisting. For example, NG Bailey Group Ltd indicated that they had not ruled out joining the TCWCS, while Amec Foster Wheeler PLC and Bam Nuttall Ltd cited the ongoing litigation and the lack of trade union support for the scheme as reasons for their current non-participation. Copies of the replies received have been published on the Committee's website.[17]

9. In the rest of this chapter we evaluate the TCWCS, and express concerns about its content, the manner in which it was announced, and the progress which has been made in contacting those who may be eligible to participate. While we are critical of the scheme and cast doubt over the motivations behind it, we acknowledge that only the eight companies who set up the scheme (out of the 30 who used the services of TCA) appear to have taken any steps at all to remedy the sins of the past. We do not accept the excuses made from the other companies for their non-participation and interpret this as evidence of their unwillingness to self-cleanse.[18]

The Scheme

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

·  Compensation payments are anticipated to start from a base of £1000 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. [19]

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".[20]

11. Representatives of the Blacklist Support Group and a number of trade unions representing construction workers reacted angrily to the details of the proposed scheme.[21] 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.[22] Phil Whitehurst, National Officer for Construction, GMB, told us that "[contractors] are after a cheap package to vindicate what they have done".[23] 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".[24]

12. On 3 February 2014, the first full round table talks between TCWCS and legal representatives for the trade unions took place. No agreement was reached at these talks.[25]

13. In our previous reports, we welcomed the principle of the scheme- and set out our conclusions and recommendations as follows:

    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.

    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. 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.

    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.

We re-emphasised these conclusions in our third interim report on blacklisting, published in May 2014. We summarised as follows:

    […] negotiations about the scheme are ongoing, and to date, the final details of the scheme have not been announced. While we welcomed the steps taken by the eight construction companies who have set up this scheme, we emphasised our expectation that the key principles of apology, adequate compensation and employee assistance for those still of working age, would form key parts of any agreed scheme. We strongly opposed any unilateral introduction of a compensation scheme. We are therefore pleased to note that the UK Government Minister agreed that the compensation scheme "would only represent an effective sign of reform if it is voluntary". Ms Willott continued that "it will be for the parties involved to agree on what form this should take and how it can be administered.

The launch of the Scheme

14. It was with some disappointment and surprise therefore that, despite failing to reach agreement with the trade unions, following eight months of discussions, the Construction Workers Compensation Scheme was unilaterally announced and launched on 4 July 2014. In its launch statement, the scheme administrators stated that "the process of engagement with unions and workers' representatives has been ongoing since November 2013 and, throughout this time the companies have listened to the unions' views and have made substantial changes to the terms of the scheme in line with their requests". However, UCATT made it clear that "no agreement was reached with the trade unions or representatives of blacklisted workers prior to the scheme being launched". In doing so, the scheme ignored our repeated recommendation that it was unacceptable for the companies involved in blacklisting to launch a unilateral scheme.

15. Richard Slaven, Partner, Pinsent Masons (the scheme architects and administrators) defended the decision to unilaterally launch the scheme. He rejected the description of the launch as being 'unilateral' as the phrase suggested that it was done by the companies without consultation, which he explained was "just not the case".[26] He explained that the decision to launch was reached when it became clear that "there was no further progress to be made" in the negotiations with the trade unions, and to do so before the House of Commons summer recess to ensure that this Committee was still sitting.[27]

16. This lack of agreement with the trade unions was masked by the use of ambiguous language in the launch documentation. The scheme's administrators wrote to members of the Committee, and indeed, to all MPs on 4 July 2014, to give notice of the scheme's launch. The letter stated that "following eight months of discussions with unions and workers representatives, the scheme has now been finalised and is open to applications immediately".[28]. This sentence was also used as the opening sentence of the press notice, which accompanied the letter[29] The notes to editors of the same press statement stated that "GMB, Unite and UCATT have called for the development of a scheme to compensate construction workers whose names were held on TCA records. The eight companies are confident that TCWCS meets the unions' stated objectives for a compensation scheme".

17. On 7 July 2014, Mr George Galloway MP tabled an EDM which welcomed the "introduction of the Construction Workers Compensation scheme through which workers blacklisted by the far-right organization the Economic League can claim a measure of recompense". The EDM specifically pointed out that the scheme had "been agreed between trades unions and employers" and subsequently urged "all workers who were unfairly and illicitly blacklisted to claim under the scheme".[30]

18. However, in giving evidence to us on 14 July 2014, representatives from Unite, GMB and UCATT made it abundantly clear that no agreement had been reached between TCWCS and the trade unions.[31] When asked whether the details of the scheme met the trade unions' stated objectives, Justin Bowden, National Officer, GMB, replied "there is a resounding no from all of us together".[32]

19. On 16 July 2014, we heard evidence from representatives of the construction companies, who had set up the scheme, and the public relations and legal firm (Grayling and Pincent Masons), who were tasked with establishing, launching, publicising and administering the scheme. We directly confronted those present with the allegation that the TCWCS letter of the 4 July was deliberately designed to mislead MPs, and all of those in receipt of the press notice, and to imply that agreement had been reached between TCWCS and the trade unions. Indeed, as the text of the EDM tabled on 7 July in response to that letter illustrates, this had certainly been the outcome.

20. Richard Jukes, Managing Director, Public Affairs, Grayling stated that the letter and press notice were designed "to simply announce the fact that the scheme had been launched" and denied that it was "intended to mislead".[33] He further explained that the drafting was intended to convey that "we had had discussions" with the trade unions, and that "a number of changes to the scheme were made as a result of those discussions".[34]

21. Callum Tuckett, Group Finance and Commercial Director, Laing O'Rourke, (one of the companies participating in the scheme), asserted that while it was "absolutely" not intended to "mislead anyone," into believing an agreement had been reached, he conceded that "when you read it cold, it does read that way".[35] Richard Slaven, Partner, Pinsent Masons accepted that the effect of the letter might have been to mislead but stated that was "absolutely not the intention".[36] Callum Tucket explained that "incompetence" rather than intent was behind the ambiguous drafting, while Nick Pollard, Chief Executive Officer Balfour Beatty apologised for the "inept drafting". Andrew Ridley-Barker, Managing Director, VINCI Construction UK, reiterated that this was "not an attempt to deceive deliberately."

22. Nick Pollard outlined the activities and actions of the eight companies in terms of the new policies and training which the companies had put in place to address blacklisting:

    From our perspective, it is an unusual feature that in a very fragmented industry eight companies have come together, and committed and bound together legally to make reparation for the entire industry's sins. There is no nit-picking about whether this was a Balfour Beatty name or VINCI name if you were part of that infringement called the Consulting Association, or the use of it. The eight have stood in the shoes of 40-odd, and that is so unusual. If that does not indicate sincerity and lack of cheese-paring, I am not sure what does.[37]

He concluded that it was "desperately disappointing that we fail, because of some drafting, to convince you of the sincerity of those actions. I am so sorry".[38]

23. However, the sincerity of such comments must be bought into question, when it is clear that those acting on behalf of the scheme had the opportunity to correct the 'misunderstanding' of their letter. Mr Jukes acknowledged that, although he saw the EDM of 7 July which explicitly stated that the scheme had "been agreed between trades unions and employers", he "did not take any steps" to correct that misunderstanding, as he "did not join the dots that he (Mr George Galloway) had drawn those conclusions from the letter".[39] Mr Jukes later apologized for this lack of response, and said that "it was not a conscious decision not to respond to it […] I should have given it further consideration and I did not".[40]

24. It is difficult to conclude that the letter and press notice which announced the launch of TCWCS was anything other than a deliberate attempt to mislead. It is almost inconceivable that the legal teams of the eight companies would not have improved such ambiguous drafting unless it was intended to be ambiguous in order to misrepresent the situation. To mislead MPs is a serious issue but to attempt to mislead blacklisted workers and their families, by, at the very least, implying that the trade unions were in agreement with the scheme, is both callous and manipulative.

25. We recognise that only eight of the companies implicated by the ICO's investigation have stepped up to provide this compensation, and have acknowledged their responsibility to blacklisted workers in a way which other companies have not. However, we conclude, with some regret and disappointment, that the unilateral launch of the scheme and the eight companies' behaviour in the context of the launch letter and press notice demonstrates a lack of good faith and a parsimony of spirit on the part of those companies-and raises significant doubts as to the sincerity of their motivations and the real extent to which they may or may not have 'self-cleansed'.

Key features of the Scheme

26. While the final details of the scheme had not been agreed with the trade unions, the final details of the scheme did reflect some of the changes which the trade unions had called for. The main change to the initial proposals were to the compensation amounts, whereby the entry level amount to the scheme was increased from £1000 to £4000.

27. The scheme provides two options for accessing compensation-fast track and full review, as outlined below.


28. Offering fixed levels of compensation, the fast track is designed for those looking for a fast payment against fixed criteria, or for those where only very basic information was held. Under fast track, successful applicants will receive payments starting at £4,000 when only very basic information, such as a name and region, is held rising to a maximum of £20,000 when there is evidence that the records had been accessed to the applicant's detriment. Under the fast track process applicants simply need to be able to demonstrate they are the person listed on the records; they do not need to prove loss of earnings as awards are based solely on the information held. Once an applicant knows they are eligible and decides to join the fast track, they will receive their compensation payment within two weeks.


29. The full review process is an alternative process for those people where there is evidence that their records were accessed and who would prefer a more detailed investigation of their particular circumstances. The full review provides the opportunity to submit evidence of the impact of TCA records on the individual's employment. These claims will be assessed by Sir Colin McKay, a retired High Court judge, who will review each application and determine compensation up to a maximum of £100,000 for any individual claimant. Under full review, TCWCS anticipates the assessment of the claim and payment of compensation will be completed within three to six months. The press release described the scheme as being "significantly faster than the High Court process".

30. Once an applicant has established that their name was held on TCA records, the scheme covers the cost of independent legal advice to help the applicant decide which option, fast track or full review, is best for their particular claim and circumstances. The announcement also noted that if an applicant already has a claim in the courts and would like to withdraw to join the scheme, TCWCS would also "cover reasonable legal costs accrued to date".[41]


31. Ucatt identified several specific problems with the scheme as follows:

·  Workers could receive just £4,000 in compensation.

·  Any blacklisting activity which was undertaken by the Economic League-the predecessor to the Consulting Association (TCA)-would be excluded from any substantive claim, despite the TCA effectively being a continuation of the Economic League's Services Group.

·  Not all the companies who were involved in blacklisting construction workers are members of TCWCS.

·  The compensation scheme would be a behind closed doors paper-based process which denies workers the opportunity to explain how blacklisting wrecked their lives.

·  Under the schemes rules only a few workers would qualify for a so-called full review.

·  If a worker agreed to enter the compensation scheme they would be effectively gagged and barred from taking further legal action against the blacklisters.

32. Justin Bowden, National Officer, GMB identified "the biggest single fault of the scheme" as being the amount of compensation that the schemes have been prepared to offer.[42] He explained that, based on GMB analysis, the eight companies involved in the scheme have an annual turnover of approximately £34 billion, with pre-tax profits in excess of £1billion. He concluded that "on our calculations the price they have placed on 15 years of systematic blacklisting, spying and lying is between the £15 million to £20 million mark".[43]

33. Mr Bowden identified further problems with the scheme: it excludes people with a pre-1993 (Economic League) file from claiming compensation; is time-limited through to June 2016; the fast track figures provide no payment for defamation or compensation for distress and emotional harm; and, the scheme does not provide for disclosure of what information is held on an individual and by whom.[44]

34. Steve Murphy, General Secretary of UCATT, described the scheme as "a deeply cynical attempt by the blacklisting companies to try to prevent workers, who have had their lives ruined, getting justice".[45] Assistant General Secretary, Unite, Gail Cartmail, said: "it is a disgrace that even our modest demand that blacklisted workers should be provided a job and upskilled has fallen on deaf ears … The compensation scheme launched by the blacklisters is an empty gesture".[46]

35. Our disappointment with the fact that the scheme was launched without the agreement of the trade unions, and the scheme's attempt to mask that fact, is compounded by some of the features of the scheme: the low levels of compensation being offered; the fact that those participating in the High Court litigation are not eligible to access the scheme; and the scheme's failure to incorporate any type of positive action measures to upskill and re-employ the victims of blacklisting. This directly contravenes our previous recommendations that the key principles of apology, adequate compensation and employee assistance for those still of working age should form key parts of any agreed scheme.

36. In line with the recommendations of our previous reports, and as noted in paragraph 22 of this report, we conclude that the unilateral introduction of a compensation scheme was 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.


37. The scheme officially launched in July 2014, but the inflow of applications did not begin until late autumn 2014. Mr Slaven identified two reasons for this delay. First, he explained that for approximately 12 weeks following launch, solicitors representing the union group engaged in lengthy correspondence concerning the terms of the scheme, which delayed any advice being given to their clients on joining the scheme. Second, and as a direct result of the union group's objection to the scheme administrator holding the Consulting Association data for validation and compensation purposes, all enquiry forms were delayed by initial ICO assessment against TCA data, a process which had been taking up to 6 weeks.[47]

38. As of the end of February 2015, 444 formal written enquiry forms had been submitted to TCWCS. Of these, 210 applicants were validated as eligible to join the scheme (i.e. that their name appeared on the Consulting Association's list), and have either joined or have been provided with the joining documents. 60 further individuals were still awaiting initial assessment by the ICO or their details were being held pending further enquiries to confirm identity. A total of 132 claims had been settled, and have either been paid (104) or were in the process of being paid (28).[48] The detail of these awards are outlined in the table below.

Table 1: Breakdown of the 132 awards that have been settled[49].

39. Mr Slaven described these figures as "encouraging", especially in the context "considerable headwinds in communicating and administering the scheme" as outlined above.[50]

40. Trade union representatives have indicated that 643 individuals are part of the action which is proceeding through the High Court, and that they have directed a further 37 individuals to the compensation scheme. Based on these figures, we estimate that approximately 1000 of the 3,213 (whose names were on TCA list) are currently in the system and seeking recompense. This means that somewhere in the region of 2000 individuals whose names were on the TCA list are neither part of the litigation nor part of the compensation scheme.

41. One of the main problems faced by the scheme was finding ways to contact the 3000 individuals whose names were on TCO list. While some individuals may have suspected they were being discriminated against while seeking employment, this was a secret list, and those whose names were on it were unaware of this fact, or indeed, that such a list existed at all. Given that much of the data is limited, and is now out of date, Mr Slaven indicated that contacting the victims of blacklisting had been a "major challenge". The Information Commissioners Office (ICO) has access to the original list, and has worked with the DWP to find current addresses for approximately 1000 individuals by matching the national insurance numbers which were included on the TCA list. The ICO have contacted approximately 1,700 individuals, and, as noted above, just under 1000 of these are 'in the system'.

42. Richard Slaven identified therefore that the single most important factor that will prevent the scheme from compensating a greater percentage of the affected individuals "is an absence of direct and repeated communication to those affected".[51] Unlike the union group, TCWCS administrators do not have access to the historical TCA data which contains past addresses and other information which might help identify and target affected individuals, nor to the current addresses identified by the ICO. The ICO has, under the direction of the court, conducted a limited exercise to communicate both the litigation and the scheme to those for whom it holds current details, but Richard Slaven argued that "this falls well short of the repeat direct communication the scheme administrator would have conducted".[52]

43. Despite the grave flaws in the scheme, our main concern is that the victims of blacklisting receive at least some measure of compensation. We therefore recommend that the ICO redouble its efforts to find and contact as many of the individuals whose names who were on the original TCA list as possible-including the families of those blacklisted workers who may have passed away. While we acknowledge the concerns the trade unions have in sharing data with the blacklisters, they should work with the ICO and the scheme to facilitate rather than obstruct this process.

44. In order to maximise the number of victims who are compensated, we also recommend that the deadline for applications to the scheme be extended to allow more victims of blacklisting to access the scheme.


45. It is difficult for us to assess the relative success of the scheme as there are no similar comparators. Richard Slaven explained that statutory redress schemes for industrial injuries, for example, are not helpful comparators because the population of affected individuals is generally unknown.[53]

46. Voluntary redress schemes, such as the Voicemail Interception Compensation Scheme introduced by News International in April 2011 (the redress scheme most similar to TCWCS architecture) provided a choice of compensation through the scheme as an alternative to a Court process. It has been reported that the News International scheme over its entire life of two years, settled a total of 60 claims. That settlement figure is against 250 applications and a total population of affected individuals estimated at between 1,000 and 4,000.[54]

10   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  Back

11 Back

12   Q 482 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   Ibid. Back

18   We note in paragraphs 51 and 52 of this report our previous recommendation that self-cleaning was an important step as it places responsibility on contractors to demonstrate how they have changed, and to make amends for their past blacklisting activity. We not only recommended that firms that have been involved in blacklisting should be required to demonstrate how they have self-cleaned before being allowed to tender for future public contracts, and took the view that that firms which do not participate fully in an agreed compensation scheme after having been caught using the blacklisting service of the TCA or any similar conspiracy, should be deemed not to have 'self-cleaned'. Back

19  Back

20   Ibid. Back

21  Back

22  Back

23   Q 3576 Back

24   Q 3577 Back

25 Back

26   Q 3996 Back

27   Q 3998 Back

28   Letter sent to all MPs from TCWCS on 4 July 2014.  Back

29   TCWCS Media announcement 4 July 2014. Back

30   The full text of the Early Day Motion is as follows: That this House welcomes the introduction of the Construction Workers Compensation scheme through which workers blacklisted by the far-right organization the Economic League can claim a measure of recompense; notes that under the fast-track process, where compensation is up to £20,000, applicants do not have to prove actual loss but only that their names were registered by the Economic League; further notes that the full review process, with compensation up to £100,000, is where there is evidence that employers used the League's register to actively blacklist; points out that the scheme has been agreed between trades unions and employers; and urges all workers who were unfairly and illicitly blacklisted to claim under the scheme, which is independently arbitrated by a former High Court judge. Back

31   Qq 3666 and 3667 Back

32   Q 3666. The trade unions objections to the scheme are outlined in paragraphs 28 to 33 of this report. Back

33   Q 3964 and Q 3966 Back

34   Q 3968 Back

35   Q 3983 and Q 3982 Back

36   Q 4075 Back

37   Q 4075 Back

38   Ibid. Back

39   Qq4037 - 4038 Back

40   Q 4039 Back

41 Back

42   Q 3668 Back

43   IbidBack

44   Q 3668 Back

45 Back

46 Back

47   Letter from Mr Richard Slaven, 9 March 2015 Back

48   Ibid. Back

49   Ibid. No applicant eligible to join the Full Review which requires proof of loss (maximum award £100,000) has yet chosen to do so. Back

50   No applicant eligible to join the Full Review which requires proof of loss (maximum award £100,000) has yet chosen to do so. Back

51   Letter from Mr Richard Slaven, 9 March 2015 Back

52   Ibid. Back

53   One of the most recent redress schemes for those who purchased card and identity protection policies from CPP Group PLC is reported by the FCA to have attracted take-up of 33.8% of eligible claimants over its life, despite those affected having been contacted direct on several occasions. Back

54   Letter from Mr Richard Slaven, 9 March 2015 Back

previous page contents next page

© Parliamentary copyright 2015
Prepared 27 March 2015