REUTERS | Petar Kujundzic

Construction blacklists – implications for the construction industry

The construction industry has been making the headlines again in the past week, but for the wrong reasons. An investigation by the Information Commissioner’s Office (ICO) has uncovered a database containing details on 3,213 construction workers, which was used by over 40 construction companies to vet individuals for employment.

The database was uncovered on 23 February 2009, in a raid on a firm known as the Consulting Association, run by a man called Ian Kerr. The ICO has served an enforcement notice on Mr Kerr ordering him to stop using the database. Mr Kerr now faces prosecution by the ICO for breaching the Data Protection Act (DPA).

The companies that are alleged to have bought information from the Consulting Association have been identified by the ICO, (see link above) but the precise extent of their dealings with the Consulting Association is not yet known.

Potential breaches of the Data Protection Act

At the moment, the companies included on the list are “only” suffering from adverse national news coverage. Depending on the data it obtained from the Consulting Association and the way it used that data, each of these companies could face prosecution by the ICO for breach of the DPA. In the Crown Court, the penalty for conviction of breaching the DPA is an unlimited fine.  However, press reports indicate that the ICO has played down the prospect of such prosecution relating to past actions, although it may prosecute if a construction company continues to use the database.

Other possible liabilities for construction companies

Press reports about the nature of the information on the Consulting Association’s database indicate that it included personal observations about workers, some of which referred to the workers’ union membership and nationality. If this is true, and was relied on by a construction company when considering that worker for employment, it could amount to breach of trade union legislation and even anti-discrimination employment legislation.

An employment tribunal’s right to award damages in cases of racial discrimination is unlimited and this will be a major concern for the construction companies that are implicated, particularly given the number of workers involved and the outrage expressed in the media.

The ICO plans to open a helpline on 16 March 2009 for workers who think they might be on the Consulting Association’s database. It may be that the true extent of public feeling and workers’ appetite for legal retribution will only become apparent after that date.

Bad publicity for the construction industry

Whatever the outcome for companies that bought data from the Consulting Association, this news comes at a bad time for the construction industry in general. This type of publicity tarnishes the industry’s image and can only harm its chances of securing assistance from the Government as it seeks to survive the economic downturn.

8 thoughts on “Construction blacklists – implications for the construction industry

  1. Building has published an article, written by Rupert Casey of Macfarlanes, which considers some of the possible legal ramifications referred to above. The article also highlights that future changes in data protection legislation (when the relevant provisions of the Criminal Justice and Immigration Act 2008 have been brought into force) could have a more serious impact on an offender. As he says: “…it is about time that the ICO had suitable powers to ensure enforcement.”

  2. Building has published an article, written by Rupert Casey of Macfarlanes, which considers some of the possible legal ramifications referred to above. The article also highlights that future changes in data protection legislation (when the relevant provisions of the Criminal Justice and Immigration Act 2008 have been brought into force) could have a more serious impact on an offender. As he says: “…it is about time that the ICO had suitable powers to ensure enforcement.”

  3. In the House of Commons on 12 March Harriet Harman, Leader of the Commons, pledged to end the “scurrilous activity” of blacklisting. At the same time, an early day motion proposed by Michael Clapham MP, which calls for government action to prohibit blacklisting, has gained the support of over 70 MPs. Michael Clapham has suggested that the Government should take immediate action by introducing regulations under section 3 of the Employment Relations Act 1999.

  4. In the House of Commons on 12 March Harriet Harman, Leader of the Commons, pledged to end the “scurrilous activity” of blacklisting. At the same time, an early day motion proposed by Michael Clapham MP, which calls for government action to prohibit blacklisting, has gained the support of over 70 MPs. Michael Clapham has suggested that the Government should take immediate action by introducing regulations under section 3 of the Employment Relations Act 1999.

  5. The furore over the blacklist scandal shows no sign of abating.

    Today, Building published a detailed article on the current scandal. Yesterday Building reported that a public demonstration is planned for 6 May 2009 at the Olympic park, east London. Other protests are also planned.

    An adjournment debate on blacklisting practices in the construction industry is scheduled for the House of Commons on Monday 23 March 2009.

  6. The furore over the blacklist scandal shows no sign of abating.

    Today, Building published a detailed article on the current scandal. Yesterday Building reported that a public demonstration is planned for 6 May 2009 at the Olympic park, east London. Other protests are also planned.

    An adjournment debate on blacklisting practices in the construction industry is scheduled for the House of Commons on Monday 23 March 2009.

  7. Government anti-blacklisting legislation came into force on 2 March 2010. For more information, see PLC Construction’s blog post of 5 March 2010.

  8. Government anti-blacklisting legislation came into force on 2 March 2010. For more information, see PLC Construction’s blog post of 5 March 2010.

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