Carillion workers paying the price for the greed and recklessness of their bosses

Stevie Dillon from Unite Scotland Construction writes for the Red Robin about the disastrous collapse of Carillion ahead of his speech at Scottish Labour Conference. 

The demise of Carillion in January was a catastrophe. If ever we needed an example of the Many and the Few here it is. For the few in Carrillion, like Richard Howson the former Carillion chief executive, a million pound pay off and £660,000 a year wages paid up until October 2018. For the many, the ordinary workers - a final pay on 31 January and life in a financial limbo wondering where the next wage is coming from. 

We know now from the evidence at the Treasury Select Committee that the directors knew about the coming crash - they all dumped their shares before they reached rock bottom. We know now that the British government knew about the crash that was coming even although it didn’t affect the placing of multi-million pound government contracts to Carillion weeks before the downfall.

And  the  Carillion workers knew the writing was on the wall when their wages were late and uncertainty stalked every Carillion contract. And it is the workers who are now paying the price for the recklessness and greed of their bosses.

Take the Carillion Network rail contracts across Scotland’s transport infrastructure; workers employed on these projects,, through agencies of Carillion, were ruthlessly exploited through the use of ‘Umbrella’ companies. The umbrella companies did the hiring and firing and hustled workers with rip-off contracts where they were forced to work without Holiday Pay, forced to pay Carillion’s national insurance contributions and forced to pay Carillion’s pension payments. This may be difficult to believe but it’s true. The same disgraceful exploitation is going on right now as the Shylock administrators PwC are pushing the same system. Another disgrace.

The truth is this exploitation of umbrella companies is now established practice in most private companies engaged in the delivery of our public services. Unite is clear, the failure of Carillion is not a one off, it’s symptomatic of a flawed political consensus around a belief that private provision is best. That  ends with the tax payer picking up a billion pound tab when reality proves that belief is not true.

Lessons can and must be learned starting with the end of outsourcing contracts for public services – and support for a new model which draws on a genuine public sector delivery mechanism, controlled by the public sector. Even if elements of the model involve partnership with some private providers. That is an entirely different concept from the total sell off to private greed that the current system represents. We need a new discussion about a new way.

If we are to discuss a new way of regulating the public sector it isn’t difficult to frame the central principles on which any ‘new way’ has to be based. The recognition of trades unions and the the right to free collective bargaining must be a condition. The banning of the use of so-called ‘umbrella’ companies along with known blacklisting companies must be included. And finally it should be mandatory on such contracts that nationally negotiated pay rates should be paid to all workers. It’s not that complicated to create a better way. Now of course those maxims must apply to all Scottish Government projects but across the land it’s time for Labour councils to play their part in delivering change.

The trade union movement welcomes the Scottish Government’s Fair Work Convention and its aspirations for workers to have a voice, security of employment and the opportunity to progress fairly in work. But we can say that there is a gap here between words and deeds. These fine words must be turned into deeds. Change can come if the Scottish Government makes real the demands emblazoned on Unite’s banner - No more umbrella companies on public sector contracts! No Scottish public contracts to blacklisting companies! Nationally agreed wages for all workers on ‘outsourced’ contracts!

Imagine those demands were made real. They would be a stepping stone to a revolution in construction and an end to the Carillion disasters of today.

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