Blacklisting: A story far from over

 By Gordon Anderson in 'Construction News'
3 April, 2017

THE story of blacklisting is a well-known one - and one that many thought was consigned to the past. But with the file reopened late last year, could there be more to come?
Many years since the initial revelations, the story of construction blacklisting far from over.
In December 2016, information commissioner Elizabeth Denham reopened the blacklisting file, starting a watching brief to monitor the on-going practices of the construction industry.
And in February this year, Labour MP Chuka Umunna called on Parliament to open a public inquiry into blacklisting practices in public construction projects, backed by Unite.
Construction companies would be wise to improve their systems to avoid a sequel to the 2009 story.

The blackstory

Blacklists were a secret database run by the Consulting Association that collected the names, religion, union membership, National Insurance numbers and other personal information on thousands of construction workers.
Over 16 years, the names of more than 3,000 individuals were put on this list without their knowledge.
Construction companies would run the names of potential employees against the list and, as a result, hundreds of workers lost their jobs and were unable to find work for years without knowing why.
The privacy of these individuals was gravely infringed, and often the information on the list was not even correct.

“In May 2016, several out-of-court settlements were reached by construction companies, who were estimated to have paid out £50m in compensation to 771 workers and £25m in legal fees”

In 2009, Ian Kerr, the man who ran the list, was prosecuted for failing to register as a data controller and 14 construction companies including Balfour Beatty and Kier were issued enforcement notices by the Information Commissioner’s Office (ICO) for violating the data protection principles that dictate that personal information must be used fairly.
Lawsuits followed in the civil courts where workers and unions demanded damages for the injustices they suffered.
In May 2016, several out-of-court settlements were reached by construction companies, who were estimated to have paid out £50m in compensation to 771 workers and £25m in legal fees.
The practice of blacklisting subjected thousands of workers to an unfair system of recruitment, leaving many individuals without work for years. And the companies involved in the practice not only suffered large settlement bills, but were publicly censured and suffered a blow to their reputation.

More to come?

In 2017, the story of blacklisting may seem to be on the backburner. But with the renewed call for a public inquiry and the ICO’s open file on blacklisting, there may be more to come.
If there were a second investigation into blacklisting, the ICO has greater powers this time around.
For conduct taking place after 6 April 2010, the ICO now has the ability to enforce higher fines of up to £500,000.
In 2009, the ICO was only able to prosecute the party running the list, but not the companies who used the list. This was widely criticised and it is likely that this limitation could be changed.
Construction companies should stay vigilant in preventing any form of blacklisting, starting with understanding the legislation.

“In 2009, the ICO was only able to prosecute the party running the list, but not the companies who used the list. This was widely criticised and it is likely that this limitation could be changed”

The Data Protection Act 1998 protects the personal information and data of individuals. Section 4 of the act outlines the data protection principles, and it is the responsibility of everyone – corporates and individuals alike – to follow them.
In summary, when using personal information one must ensure that it is used fairly and lawfully, that it is for a limited and specifically stated purpose, that the use is not excessive, it is accurate, and that it is kept safe and secure and for no longer than is necessary for the stated purpose.
If the ICO finds a contravention of these principles it has the power to issue an enforcement notice alerting that the identified conduct must cease. It is a criminal offence to fail to comply with the enforcement notice and offences are punishable by fine.

A helpful framework

To assist employers in staying within the data protection rules, the ICO published the Employment Practices Code in 2011.
Part 1 of the code outlines good practice when using personal data in the recruitment process. It states that an employer should only seek information that is relevant to the recruitment decision being made.
Where it is necessary to obtain documents or information about the worker from a third party, the employer should obtain consent from the worker.
If in the process of verifying or vetting an applicant the information produces discrepancies, the applicant should be given the opportunity to make representations. Where information is received that affects the individual’s privacy, they should be made aware of this.
These are some of the many practices that construction companies should follow.
While the Data Protection Act is the definitive law on the matter, the ICO’s code can provide a helpful framework.
Gordon Anderson is partner and head of the London construction team at Irwin Mitchell

UNITE Report on Cullum McAlpine!

‘Blacklisting mastermind’ refuses to give evidence

Shaun Noble, Tuesday, April 12th, 2016

THE alleged architect of the construction ‘blacklisting’ scandal, Cullum McAlpine, has declined to give evidence in the High Court case, due to start next month, to establish the extent of wrong-doing in the industry.

Unite condemned the decision by Cullum McAlpine not to take the witness box as ‘a further gross insult’ to the thousands of construction workers who have lost their jobs because of the machinations of the secretive Consulting Association and Services Group of the Economic League.

The revelations about Cullum  McAlpine, a director of Sir Robert McAlpine Ltd, came when the companies’ evidence was filed for the High Court  trial which is due to start on Monday May 9 – and is expected to last 11 weeks.

The complex multi-strand case will centre on a number of key legal issues, including defamation, breaches of the 1988 Data Protection Act, conspiracy and misuse of private information. The outcome of the trial will determine the level of compensation those ‘blacklisted’ may receive.

Unite is supporting the claims of about 290 construction workers for damages for years of lost income because they were ‘blacklisted’. The claims are against Sir Robert McAlpine Ltd, Balfour Beatty Engineering Services and more than 30 other firms.

Unite also pledged to challenge Sir Robert McAlpine Ltd every time that the company tenders for future public procurement contracts, unless Cullum McAlpine gives evidence at the High Court.
 
'Despite last October’s unprecedented admission of guilt by construction firms involved in blacklisting, those that masterminded this campaign of blacklisting are still twisting and turning to avoid appearing in court where the media and public will be present,' said Unite director of legal services Howard Beckett.
 
'It is Unite’s belief that that Cullum McAlpine, as founder chairman, was the key architect in the operation of the Consulting Association until it was raided by the Information Commissioner in 2009.
 
'The fact that he is refusing to give evidence to help bring closure for the suffering that our members and their families have endured is shaming.
 
'You judge the character of a person if they are prepared to stand up and defend their actions in open court – you don’t skulk in the legal twilight protected by a platoon of expensive City lawyers,' Beckett added.
 
'How can a company run by a man who hides from his victims and the justice system ever hope to convince ministers that they have learnt from the sins of the past and deserve to be involved in public procurement contracts.
 
'Unite says loud and clear to Cullum McAlpine: Turn up and give evidence or expect your dispute with us to go on long after this litigation has concluded. We will object at every turn to your company benefiting from public procurement contracts.
 
'It is only now after sustained legal action, with the support of Unite, that the lid is being finally lifted on a scandal which has ruined countless lives and led to hardship for many more,” Beckett noted.
 
'However, the stain of blacklisting won’t be removed until there is a full public inquiry and the livelihoods of the blacklisted are restored by the firms involved giving them a permanent job,” he added.
 
'Many Unite members, who are the victims of blacklisting, have rejected the employers’ financial offers. The employers make mention of headline figures in regard to their top offers, but the reality is that they continue to attempt to buy off the majority of claims with low offers.
 
'The employers need to understand that compensation is only one part of the blacklisting struggle and until the employers are prepared to issue unreserved admissions as to the practices they undertook, prepared to disclose all documentation they hold regarding the blacklist and show a willingness to positively intervene in favour of employing victims then the fight goes on.'