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Carillion uses “Lance Armstrong Defence” over Blacklisting

The decision on the 26th February by the Employment Appeals Tribunal (EAT) in the blacklisting case brought by Dave Smith against the construction and services giant, Carillion, is very significant, as it means the company must now face human rights claims. Mr Smith, an engineer from Essex, was repeatedly dismissed and refused work once his name appeared on the unlawful blacklist database maintained by the Consulting Association.

Mr Smith was blacklisted for raising concerns about asbestos, poor toilet facilities and contaminated waste on London and Essex building sites controlled by companies within the Carillion Group (Carillion, Carillion (JM) Ltd, and Schal International Management Ltd)

On the same day as the EAT hearing, the magazine published a breakdown of how the Consulting Association was funded, see their full report here. Of the 44 building companies who contributed to funding the unlawful activities of the Consulting Association, the biggest two players were Sir Robert McAlpine and Skanska, each spending well over £200,000. They are followed by Laing O’Rourke and Balfour Beatty, which both spent more than £100,000 which are followed, in turn, by Carillion and Amec.

In the period between 1996/7 and 2003/04,  the Carillion group, (trading as Tarmac/ Carillion/ John Mowlem)  paid £83,161.00, and was then the third largest supporter and user of the blacklist. This spending broke down as an annual fee  of £3,500 , plus a fee of up to £2.20 per name to check information on the unlawful database.

Information given by Ian Kerr, who ran the Consulting Association,  to the Scottish Select Affairs Committee revealed that the organisation functioned in secret, with a senior HR representative of each of the 44 building firms acting as the key contact. These contacts provided the information to Mr Kerr which was used to build a database of information about thousands of workers in the industry. The same contacts also contacted the Consulting Association when they were seeking to hire, at which point they faxed through a list of names, which Kerr would check against the database, and then he would phone through to the contact and read out the information on the cards, for any names he matched. In an average year there would be between 38,000 and 40,000 names referred by member companies.

Mr. Smith’s Employment Tribunal in January 2012 gained notoriety when Carillion openly admitted in court to blacklisting him because he was a trade union safety representative on their building sites but he still lost the case on the legal technicality that he was not directly employed by the companies but via an employment agency.Despite the ET written judgement describing the case as a “genuine injustice”, Mr Smith had originally been denied the opportunity to appeal but this week John Hendy QC successfully argued that the decision was potentially in violation of the Human Rights Act and the European Convention on Human Rights – Article 8 (the right to privacy) and Article 11 (the right to freedom of association).

Justice Singh presiding stated in his summing up to the EAT permission hearing:” if true, [John Hendy QC’s] argument would mean that this country may have been in breach of its obligations, especially under Article 11 of the European Convention on Human Rights and the case raises issues about the Human Rights Act in employment law”

Carillion’s involvement with blacklisting first came to light when in 2009 the Information Commissioners Office (ICO) seized a Consulting Association database of 3,213 construction workers, and environmental activists. Concerns have since been raised about possible involvment of the police and security services.

The ICO confirmed that Dave Smith was one of 224 construction workers from around the UK who were victims of blacklisting by Carillion. These names were released in the course of the Dave Smith’s employment tribunal. There is evidence from the Information Commissioner that Carillion involvement with the Consulting Association blacklist included parts of their organization such as Crown House, Schal International, SkyBlue Employment Agency, Tarmac and John Mowlem as well as Carillion itself.

Maria Ludkin GMB National Officer for Legal and Corporate affairs said “Carillion repeat the same statements whilst still refusing to explain their continued presence and attendance at “security meetings” held at the Consulting Association right up until the raid by the ICO in 2009. The fact that environmental activists who had never worked in the construction industry are listed on the blacklist, and that this information may be from the police or security services, leaves Carillion with a fresh new set of questions to answer. It will be for the High Court to decide if their “Lance Armstrong defence” that they were not as bad as some of the other construction employers will provide them with effective legal protection. In effect they are saying they may be guilty but so is everyone else. Doesn’t make them any less guilty does it? It’s a pathetic response.”

Carillion are also set to be grilled by MPs when they are called to give evidence to the Scottish Affairs Select Committee investigation into blacklisting in employment. The Scottish Affairs Select Committee investigation into blacklisting has already heard evidence that Frank Duggan (ex-Group Personell Director for CarillionPLC), Liz Keates (current Head of HR at Carillion Health) and John Ball (ex-Head of HR at Carillion PLC) were all at various times the “main contact” between Carillion and the Consulting Association.

The scandal is the abuse of power by a company as huge as Carillion using its economic strength to victimise and exclude people from work. Carillion today announced a 26% rise in pre-tax profit from £142.8M in 2011 to £179.5M in 2012 in its annual results; and revenues over the same period of £4.4bn. As Ian Lavery MP said during the parliamentary debate about blacklisting in January :

“On its own admission, Carillion has had £2.5 billion per annum from public contracts, at the same time as placing ordinary citizens on blacklists and stopping them working. It cannot be allowed and it must be stopped as soon as practicably possible.

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