FEATURE Carillion


THE COLLA EMPIRE


The fall of the giant Carillion puts thousands of workers’ futures in doubt


Early one morning just two weeks into the new year, about 20,000 workers in the UK woke up wondering whether they should bother turning up to work. They didn’t, after all, know whether they had a job to turn up to.


Outsourcing and construction giant Carillion dramatically collapsed on January 15 under the weight of a £1.5bn debt pile, putting the pay, pensions and ultimate futures of tens of thousands of people in limbo.


Another 30,000 businesses reliant on Carillion – enmeshed in the web of big business’s


endlessly complex


subcontracting apparatus – also did not know whether they would get paid, or whether in a few months’ time they would exist at all.


The news left politicians and Carillion executives scrambling to explain how such a massive company – the second largest construction business in the UK and the recipient of hundreds of public sector contracts – could come to such a sudden demise, and why, apparently, no one saw it coming.


But in the days and weeks after Carillion went into liquidation, it emerged that the signs were in fact there all along.


Last year, the firm issued three profit warnings in the space of only five months – but the government continued throwing contracts its way, to the tune of nearly £2bn.


As uniteWORKS goes to print, over 1,400 people have been officially made redundant with about 16,000 still not knowing whether they’ll keep their jobs.


Small businesses which subcontracted with Carillion face the prospect of being shut down, putting thousands more jobs in the firing line. Already companies have gone to the wall and jobs have been lost.


For those workers who do still remain after Carillion’s demise, even if they get new jobs, their fears are far from over.


Because Carillion had gone into compulsory liquidation, workers who are transferred to new firms will not be protected under TUPE regulations – and while the government could easily set up a voluntary TUPE scheme, especially for those on public sector contracts, in February Tory MP and junior business


14 uniteWORKS Spring 2018


More shockingly still, Unite has discovered Carillion didn’t pay into the NHS pension scheme in December last year even though deductions were made from employees’ salaries.


And yet despite workers’ misery, those responsible for Carillion’s collapse will likely find their fortunes still intact.


Former Carillion top boss Richard Howson – despite quitting last July after the series of profit warnings the firm issued – is still entitled to a £55,000 a month salary until October as part of his contract.


In the last two years, Howson received bonuses totalling over half a million pounds, even as it was apparent that the company was failing.


And when Carillion executives were hauled before MPs in late January and


It has been revealed that since last October the government was undertaking continuity planning for Carillion’s collapse but still awarded the company contracts.


“The developing picture of the level of incompetence and mismanagement at Carillion is simply staggering,” said Unite assistant general Gail Cartmail.


“It is frightening that the legal framework in the UK is so weak that no one was able to intervene to prevent the company’s collapse, despite it now becoming apparent its financial problems began a decade ago.”


minister Andrew Griffiths refused to commit to this.


Cartmail slammed the government, saying that it is “to the government’s discredit that they have refused to introduce this minor and simple measure which would provide some reassurance to these workers.”


Workers’ pensions too are in limbo. Carillion’s defined benefit pension schemes have now been transferred into a government-backed fund for failed companies, which will mean thousands of workers will see an average 15 per cent fall in their pension pots.


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