Workers could be blacklisted if they disagreed with their managers on health and safety, Balfour Beatty admits

13 March 2013

Workers may have been blacklisted for raising health and safety issues with which their managers disagreed were a genuine concern, CEO of Balfour Beatty Construction Services UK Mike Peasland has admitted.

Speaking to the Scottish Affairs Committee yesterday (March 12th), the executive explained that the only reason – to his knowledge – that a worker’s details would have been passed to the Consulting Association (a blacklist maintainer used by the construction industry) after raising a health and safety concern was if the manager did not believe the individual’s worries were genuine, and thought instead they were intended to disrupt work. Mr Peasland reluctantly conceded that an individual may indeed have a genuine health and safety concern, but depending on the view of their manager, they could still be blacklisted, having done nothing wrong.

Mr Peasland has worked for Balfour Beatty for 43 years, beginning his career as a civil engineer technician and slowly rising to the top of the Group through, taking on managing director roles in some of its six operating units during his ascension.

All six of these units were members of the Economic League, with the Group itself holding membership since the 1970s, until the point at which the organisation wound up in the early 1990s, at which interval every individual firm within the Balfour Beatty Group signed up with the Consulting Association.

Despite this long history with known blacklisters, Mr Peasland declared that he was not aware of the vetting of employees through the Consulting Association until 1999, when he became the Managing Director of Balfour Kilpatrick.

He admitted, however, that even after finding out about the company’s use of the blacklister, neither he nor the firm itself was considering any kind of proactive action against the practice until after the Consulting Association was raided by the Information Commissioner’s Office (ICO) and subsequently forced to close its doors in 2009.

Indeed, it seems Balfour Beatty were enthusiastic supporters of the CA, becoming a founding member in 1993 and then spending thousands of pounds retaining its subscription to the organisation and checking every potential employee as a part of its standard recruitment procedure. Between 2004 and 2008 alone, Balfour Beatty ran 15,000 checks at between £2.40 and £3 each. Added to the annual subscription fee of £3,500, the firm spent a total of £50,998 on CA services in those four years. As Barrister Simon Reevel – a member of the Commitee – pointed out, this suggests the CA was contacted by Balfour Beatty just under ten times a day on average.

These checks, Mr Peasland insisted, were not conducted in order to root out trade union members, whom he claimed the company would never discriminate against, but rather to identify potential troublemakers who may cause disruption on-site. The executive defined this disruption as unlawful activity and ‘civil disobedience’, by which he referred to unofficial industrial action.

In justification of this practice, Mr Peasland explained that there were many high profile and major projects being constructed in the build up to the Millennium that it was vital to finish on time. He claimed that unofficial action was brought about to sabotage these projects and put the company under pressure to provide a worker bonus in return for the project being finished as close to the deadline as possible. This sabotage was achieved through the deliberate slowing down of work or employees walking off-site, Mr Peasland stated. He claimed not all workers wanted to be involved in the industrial action but some were bullied or harassed into doing so, and violence may even have been used against them to coerce them into joining the dispute.

However, the executive was not able to fully explain to the panel how Balfour Beatty was able to tell the difference between a trade union member who was likely to spark unofficial action and one that wasn’t. There were thousands of people on the blacklist specifically for being a member of a trade union or left-wing political party, and evidence from former Chief Executive Officer of the Consulting Association Ian Kerr in fact states that Balfour Beatty were more “hard-nosed” than other users of the service in that they would refuse to employ a person simply for being on the list rather than looking into the case in more depth.

Mr Peasland also admitted that, although there was no obligation or expectation that members would both submit and withdraw information from the Consulting Association, his firm was involved in providing the names and details of employees they did not wish to hire again for a range of reasons. It was highlighted to the executive by Chairman of the Committee Ian Davidson that part of the information submitted by Balfour Beatty was a list of 30 to 40 names of workers who were identified as being “followers” of unofficial action in 2007 – the very kind of people Mr Peasland had said could be coerced into joining the dispute. Their names were never removed from the blacklist, so many could have found it difficult to find employment in the construction industry for over a decade following the dispute.

Mr Peasland conceded that this practice was extremely unfair, although he said he was not personally aware of it. But the opinions he claims to have are obviously not shared by the Group itself judging by what action has been taken since 2009.

Although a new code of conduct and several procedures to improve the reporting of health and safety concerns and other kinds of whistleblowing have been put in place – a point the business leader repeatedly highlighted during his evidence – none of the employees intimately involved have been punished. Some of the most senior ones even remain in their jobs in the company, and the firm is preparing to defend itself in court against blacklisted workers suing for compensation. Chair Ian Davidson pointed out that the company was giving a somewhat confused message on what its views on blacklisting really are.

This scepticism can only be heightened by the case of Alan Wainwright, a former construction manager at Balfour Beatty subsidiary Haden Young, who blew the whistle on blacklisting practices. The employee later lost his job and was convinced he was blacklisted himself after he was unsuccessful in his application to around 200 positions for which he was qualified, according to the Guardian. Mr Peasland told the Committee that Mr Wainwright reported his concerns about blacklisting to his direct superior David Beck, who then passed the information to Senior HR employee at Group level Paul Raby. When asked what happened next, Mr Peasland claimed legal privilege and declined to give any further information. He also revealed that Balfour Beatty did not review their recruitment and vetting procedures nor seek legal advice following Mr Wainwright’s comments, and insisted that Balfour Beatty was not aware at that point that the activities of the Consulting Association were illegal.

When it comes to the process of blacklisting itself, Mr Peasland largely echoed what has already been reported to the Committee by Skanska. Names and National Insurance numbers of all potential candidates were sent to Chief Executive Officer of the Consulting Association Ian Kerr, who would fax back a message if any of the names were on the blacklist. In such a case, Mr Kerr would telephone a contact at Balfour Beatty and give an explanation as to why the person was not cleared. An internal discussion within the company would then ensue as to whether the individual was given a job or not. This procedure was carried out on all projects for direct employees and was also used for some subcontractors.

Balfour Beatty representatives also attended Consulting Association meetings. Some of these meetings were about the financial running of the organisation, while others were a discussion and opportunity to share information on the industrial relations climate at that time, Mr Peasland stated. The firm also had a representative as Chairman of the Consulting Association for a period of time, he confirmed. However, Mr Peasland denied any knowledge of meetings between the police and Balfour Beatty. This piqued the interest of the Committee due to the fact Skanska recently submitted evidence claiming a representative from the Group was present in a meeting with a police operation known as Neptune, which was focusing on extremists within the UK. Mr Davidson noted that the fact Mr Peasland had no knowledge of this testimony, despite it being in the public domain, cast his authoritativeness as a witness into doubt. Later, the executive also admitted not knowing that environmental activists were listed by the Consulting Association, backing up the Chair’s concerns.

Lastly, Mr Peasland’s evidence also marked Balfour Beatty out against some of the other companies involved in the blacklisting scandal. Firstly, unlike others who have been witnesses at the Committee so far, the company retain information on employees who were blacklisted (although the business leader insisted these details were not being used). Secondly, it appears the Group may have been one of those organisations that has been accused of hanging Mr Kerr out to dry after the ICO raid, as it refused to pay final invoices relating to the Consulting Association after it had received an Enforcement Notice from the ICO. Mr Peasland said Balfour Beatty was simply worried about being in breach of this Notice, but admitted that legal advice was never sought on this matter.