Compensation for construction workers

Posted by Vicky Schollar on
On 18 November 2013, the Financial Times reported that over 3,000 workers named on a secret construction industry ‘blacklist’ could receive compensation of up to £100,000 each under a Construction Workers Compensation Scheme.

The list was intended to identify potential ‘troublemakers’, such as environmentalists and those engaged in union activity. It is thought those named on the list were essentially barred from certain sites.

What will Ucatt’s legal action be based on, and against whom?

The construction union, Ucatt, has recently commenced legal action against some of the construction firms involved in the allegations of blacklisting for breach of confidence and misuse of private information. This follows the revelation that at least forty construction companies used an agency (The Consulting Association) over many years to check whether construction workers were ‘trouble makers’ within the industry. The information obtained from the agency was then used by the companies to determine whether or not to offer work to individuals.

The blacklist was revealed following an investigation by the Information Commissioner’s Office (ICO) in 2009. There are over 3,200 individuals named on the list and personal data against their names included their National Insurance number, date of birth and comments such as ‘rabble rouser’, ‘militant’ and ‘bit of a Trotsky’. Many on the list were either union representatives or individuals who had raised concerns about health and safety.

Who is funding the Construction Workers Compensation Scheme?

The compensation scheme is being funded by eight of the largest constructions firms who are also named defendants in court proceedings, including Balfour Beatty and Costain. It is not clear at this stage whether any of the other firms who have been identified as users of the blacklisting agency will join the scheme.

How does this tie in with the legal action by Ucatt?

Ucatt and other representatives of those named on the blacklist have concerns about the terms of the scheme. There are also concerns about the motives behind it. Ucatt is currently continuing with its legal action against the named firms while discussions between both sides about the scheme continue, with a view to ensuring they are fair and reasonable. The workers concerned and their representatives are also pushing for a public enquiry.

Are construction workers allowed to request to see if they are on the list?

If a worker suspects that they may have been on the blacklist then they can write to the ICO and ask if their name appears. According to ICO they have received around 1,200 written requests from which 467 individuals have been provided with copies of their information. This means that many workers have not yet come forward and may not even be aware that their names are on a blacklist and this is why they were refused work. Recently, however, the ICO has confirmed that it has written to a further 1,200 people who they believe may have been on the list.

How will the amount of compensation due to an individual be calculated?

It appears that details of the scheme are still being developed and it is not clear how compensation will be calculated. Ucatt has confirmed that they have not been involved in discussions in setting up the scheme or in how it will operate.

Why does Ucatt object to the scheme?

Ucatt’s General Secretary has described the scheme as ‘a complete travesty of justice’. It appears the union is concerned that, among other things, under the terms of settlement there will be no admission of liability and workers will be expected to drop all other legal claims. Some also see the scheme as a means of damage limitation with the companies concerned trying to protect their reputation.

What effect has the blacklist had on the construction industry’s reputation?

Most of the companies who used the blacklisting agency still operate in the construction industry and there is therefore a fear that the practice may still be continuing, or that firms may recall or have kept their own records of persons named on the list. As stated above, it appears that the firms involved are trying to minimise the impact of the revelations on their reputation by setting up the compensation scheme. The blacklisting practice has no doubt led to a breakdown in trust and confidence between workers and their employers and this relationship will need to be rebuilt.

What is the legal situation surrounding the creation of a blacklist, and is the practice likely to be examined by the government in their six-month review of industrial relations?

Blacklisting was made illegal under the Employment Relations Act 1999 (Blacklists) Regulations 2010. The Regulations make it unlawful for employers, employment agencies and others to compile, use, sell or supply ‘prohibited lists’ (although there are some exceptions). A prohibited list is one which is compiled with a view to it being used to discriminate against trade union members or activists. It is automatically unfair to dismiss someone in relation to a prohibited list and it is unlawful to subject a worker to a detriment for a reason which relates to a prohibited list. A person can also bring a claim if they believe they have been refused employment for a reason relating to a prohibited list.

Individuals and trade unions can bring a claim in the employment tribunal for which there is a three month time limit, starting from the date of the alleged unlawful conduct.

In addition to claims under the Regulations, claims could also be brought under the Data Protection Act 1998 and/or the Trade Union and Labour Relations (Consolidation) Act 1992.

Nick Clegg, the Deputy Prime Minister, has said that the allegations of blacklisting could be examined as part of the government’s six-month review on industrial relations. However, some have already voiced concerns that such a review would not be impartial as the person leading the review has previously acted against trade unions and for firms in the construction industry.

What should lawyers representing those in the industry do next?

Ucatt has recommended that anyone who thinks they may have been affected by blacklisting to get in touch with their union. Alternatively, they could seek legal advice through their lawyer. It must be remembered that the compensation scheme only relates to eight of the forty firms involved and therefore at the moment it seems that any worker whose potential claims are not against those eight will have to pursue legal action if they want redress. The remaining construction companies involved will need to be prepared for this.

Other employers in the construction industry should ensure they fully understand the law against blacklisting, and check their recruitment and contracting procedures to ensure that they will not exposed to claims going forward. Recent case law has shown there are potential loopholes in the Regulations but with the current reputational damage to the construction industry on this topic, it would be unwise to exploit them.

Vicky Schollar has experience of dealing with a wide range of contentious and non-contentious matters for both businesses and employees. She is particularly interested in Employment Tribunal matters and has represented clients at various stages of tribunal proceedings.

Interviewed by Kate Beaumont. This article was first published on Lexis®PSL Employment on 26 November 2013. 

Reproduced with kind permission of LexisLibrary.


About the Author

Vicky advises on a wide range of contentious and non-contentious employment issues, acting for both businesses and individuals.

Vicky Schollar
Email Vicky
023 8085 7164

View Profile