[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.
FAST TRACK
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.
FULL REVIEW
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]
Response
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.
Update
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].
