July 3, 2018 / 1:05 PM / a year ago

Union Unite sues collapsed Carillion on behalf of ex-workers

(Reuters) - Britain’s biggest labor union said on Tuesday it has launched legal action against Carillion on behalf of former workers of the company whose jobs were made redundant following the collapse of the British outsourcer in January.

FILE PHOTO: Cranes stand on a Carillion construction site in central London, Britain, January 16, 2018. REUTERS/Simon Dawson/File Photo

The members were employed by Carillion’s group company Planned Maintenance Engineering Ltd on a contract at Britain’s GCHQ spy agency headquarters in Cheltenham, Gloucestershire.

Carillion collapsed in January when its banks pulled the plug, triggering Britain’s biggest corporate failure in a decade and intensifying uncertainty about the future of the outsourcing sector.

Unite said the workers were dismissed on Feb. 6 without consultation and were told to claim their pay from the government’s redundancy payments office.

The original Unite claim was against Carillion, but the tribunal judge has added the Secretary of State for Business, Energy and Industrial Strategy (BEIS) as an additional respondent to the claim, Unite said.

If the claim is successful, the workers can each be awarded up to 90 days’ pay, the union said. As Carillion is in liquidation, the amount would be paid by the Insolvency Service in the form of unpaid wages and would be capped at 8 weeks and a maximum of 489 pounds ($644.75) per week, it added.

The British government’s Insolvency Service is currently carrying out an investigation into potential misconduct by former directors at Carillion.

The Official Receiver, which manages insolvencies for the British government, is handling Carillion’s liquidation, with PwC appointed by the High Court to support the liquidator.

“From the date of the liquidation we’ve prioritized finding secure ongoing employment for as many of Carillion’s employees as possible to ensure the continuity of essential public services,” a spokesman for the Official Receiver said, in a Reuters request for response on Unite’s legal action.

“It is for an Employment Tribunal to determine whether, in these circumstances, the consultation with affected employees met established requirements,” he added.

To date 12,338 jobs, or 68 percent of the pre-liquidation workforce, have transferred to new employers and 2,403 jobs, or 13 percent of the workforce, have been made redundant through the liquidation, according to the latest report by the Official Receiver.

A further 1,249 employees have left the business during the liquidation through finding new work, retirement or for other reasons.

About 2,100 employees have been retained to allow Carillion to deliver the remaining services it is providing for public and private sector customers, according to the report.

Reporting By Justin George Varghese in Bengaluru; Editing by Jan Harvey

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