Unite, the UK’s largest union, is urging the government to ensure that workers employed by Carillion do not have their pay and conditions cut when they are transferred to new employers.
The auditors, PWC, who have been assisting with the liquidation of Carillion, have writtento union representatives, beginning the process of making the entire workforce compulsorily redundant.
Following Carillion’s collapse on Monday 15 January, the government announced that workers employed on the company’s 450 public sector contracts would continue to be employed. Iit was then announced that on 90 per cent of the private sector outsourced contracts, short-term arrangements had been arrived at and these workers would continue to be paid while longer term arrangements were made.
However, in PWC’s letter, they have confirmed that the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) will not apply. The letter, says: “In this situation staff will not automatically transfer under TUPE because a winding up order has been made against each of the [Carillion] companies.”
This means that staff can be transferred to different private companies on vastly inferior rates of pay and poorer conditions.
The letter also states: “Consequently we are seeking agreement from any new providers that they will take on as many affected staff as they can on appropriate terms.
“Where there is an opportunity for contracts or projects to continue with a new employer (under TUPE or otherwise), transfers may need to happen very quickly to facilitate securing roles for Carillion employees with new employers. It is quite possible that moves may need to be completed within a matter of days – perhaps less. We cannot confirm any specific transfer today but such transfers could happen before 31 January in some cases.”
Unite is being told the only exception where TUPE does apply is for Carillion workers in the prison service as their specific company, Carillion (AMBS) Limited, is in provisional liquidation and no winding up order has been made. Negotiations are ongoing with the Ministry of Justice for a new company to take over this work.
Unite is aware of some employers who are voluntarily taking on Carillion and mirroring TUPE arrangements, and the union is also considering the possibility of legal challenges to force employers to abide by TUPE arrangements.
Unite assistant general secretary, Gail Cartmail, said: “This is a further slap in the face for Carillion workers and demonstrates the hollowness of the government’s initial promises.
“Even if the jobs of workers are preserved they now face the prospect of being transferred to new companies without warning with potentially far lower rates of pay and poorer conditions.
“The government and its taskforce needs to immediately get a grip of this issue and to ensure that companies taking on Carillion workers respect their existing pay, conditions, pensions and length of service .
“A situation where other companies were able to enrich themselves by picking up contracts and slashing workers’ pay is absolutely intolerable.
“Unite is pleased that good employers are already doing the honourable thing and preserving workers terms and conditions when they are transferred.
“If companies think they can boost profits by slashing pay and terms and conditions then Unite will use all available legal avenues to prevent this.
“The collapse of Carillion had nothing to do with its workers who are yet again facing an uncertain future through absolutely no fault of their own. In many cases these workers have been continuing to provide vital public services since the company’s collapse.”
The letter also confirms that although Carillion is in liquidation, if workers are ultimately made redundant, redundancy payment will be made via the insolvency service; meaning they will be paid for by the taxpayer.
