Construction Professional

Five things you should know about… ... contract rebidding

Banishing the blacklisters

A case brought by employees who claim they were blacklisted could bring similar actions across the industry, says Susanna Gilmartin

IN MARCH 2009 the Information Commissioner’s Office confirmed the operation of a blacklist containing the names of more than 3,200 construction workers. A public outcry ensued and in its wake a new law was put in place. The Employment Relations Act 1999 (Blacklists) Regulations 2010 make it illegal for organisations to compile, supply or use blacklists and prevents the use of blacklists in deciding whether to employ or dismiss individuals. The Regulations give individuals the

right to bring a claim in the Employment Tribunal.

Although there have been very few successful Employment Tribunal claims, because people often lodge claims out of time (a claim must be issued within three months of the date of the relevant conduct), greater awareness of rights and how to bring a claim is likely to result in more actions. Apart from the Tribunal route victims of blacklisting can use other legislation to take their case to the court. At the end of July 2012, 86 construction

workers launched an action in the High Court against Sir Robert McAlpine for conspiring with other firms, among other things, to keep them out of work. The claim is valued at £17m, but it is thought this could increase to as much as £600m. Sir Hugh Tomlinson, the QC who represented the victims of the phone hacking scandal, is acting for the workers. The exposure this claim will bring to the issue of blacklisting is likely to encourage more people to join the action. Before this High Court action, perhaps the most newsworthy case involved Dave Smith, who brought a claim against Carillion in the Employment Tribunal under the Regulations. During the course of his claim it transpired there was a mass of information on him held by the Consulting Association, an organisation which provided information about individuals working in the industry to construction firms.

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Although he was unsuccessful because he was an agency worker and as such did not have the legal standing to bring a claim, the tribunal judge said Smith had suffered an injustice. Smith is now one of the individuals pursuing his claims via the High Court action. What companies need to be aware of is

the following: • Any company caught using a blacklist may face action in the courts and damages may be awarded for injury to feelings with no upper limit on the amount that can be awarded;

• It is illegal for any company or employment agency to refuse to employ someone for any reason that relates to a blacklist. The Regulations are drafted to cover a wide range of possible situations, including where an offer of employment is made and then subsequently withdrawn;

• The Regulations give employees who are refused employment, suffer detriment or are dismissed due to blacklisting, the right to bring claims in the Employment Tribunal;

• Unions can also bring claims on behalf of an employee;

• The Employment Tribunal has the power to award employees compensation of up to £72,300. The cumulative effect if a large number

of employees bring claims could therefore be substantial in terms of cost as well as significant damage to reputation. The Regulations up to now have been dismissed by many as being too lenient in terms of punishing offending companies, demonstrated by the fact that they do not make blacklisting a specific criminal offence. However, with the publicity surrounding the High Court action, individuals are likely to be on the look out for signs of blacklisting.

Susanna Gilmartin is a partner in the employment team at Thomson Snell & Passmore

The cumulative effect if a large number of employees bring claims could be substantial in terms of cost as well as significant damage to reputation

Some win as many as 90%. Others win as few as 40%. Every rebid lost is revenue and profit that needs to be replaced, but new win rates are typically lower than retention rates. If you need to spend more to win comparable levels of new business why not invest in keeping what you’ve got?

01

contract is hugely important to how good a position you start the rebid in. If you’ve performed poorly not only will the customer be looking for a new contractor, but any promises you make of great things in the future will be met with the question “So why haven’t you been doing that for the past X years when you had the chance?”

02

well, have you gone beyond the specification to really get the customer positively wanting to do business with you above all your competitors? And can you properly evidence that in the rebid? If you haven’t collated all the great things you’ve done during the contract they will probably have been forgotten by the time of the rebid. If not by you then by the customer — even if they do they can’t give you marks unless you’ve written it down.

03

(preferably 18 months) before the end of the contract is vital. That’s usually when the customer starts thinking about what they want in the future contract. Starting early gives you time to influence this. It also gives you time to review the contract, put anything that’s not working well right, collate all the information you need for the rebid and get the right team in place who can put in an innovative, well-priced solution.

04

experience in your rebid team will pay dividends. Too much influence from the existing contract team leads to ”more of the same” but if the contract team are ignored you lose the detail of the customer’s day-to-day needs that can make your solution convincing and workable. But always challenge every assumption of what the customer needs – if it isn’t in the specification, don’t price it.

05

By Nigel Thacker, author of Winning Your Rebid, which is available at www.gowerpublishing. com/isbn/

9781409440352

Build the right team Getting the right mix of skills and

Start the rebid early Starting the rebid at least a year

Build the business case Even if you’ve run the contract

Run the contract well How well you have run the

Rebid win rates vary from company to company