Unite, the UK’s construction union, has learnt that taxpayers are
set to pay £65 million to former Carillion workers who were made
redundant following the company’s collapse in January. Unite
made a Freedom of Information request to the Insolvency Service
which revealed that the Redundancy Payments Office (RPO) has made
substantial payments to former Carillion staff. The response
said: “the total amount we may pay out is approximately £65
million of which £50 million has...Request free trial
Unite, the UK’s construction union, has learnt that taxpayers are
set to pay £65 million to former Carillion workers who were made
redundant following the company’s collapse in January.
Unite made a Freedom of Information request to the Insolvency
Service which revealed that the Redundancy Payments Office (RPO)
has made substantial payments to former Carillion staff. The
response said: “the total amount we may pay out is
approximately £65 million of which £50 million has been paid so far
based on actual claims received.”
This figure is solely for former Carillion staff and does not
include workers who lost their jobs when company’s in Carillion’s
supply chain also hit the wall due to being owed substantial sums
of money by the company.
As Carillion collapsed into compulsory liquidation, rather than
enter a managed form of administration, the vast majority of the
company’s 19,000 staff had to be made redundant and were then
entitled to make a claim for redundancy, from the (RPO).
This included staff who were transferred to a new employer, however
because of Carillion’s compulsory liquidation the Transfer of
Undertaking Protection of Employment (TUPE) regulations which
protect a worker’s pay, terms and conditions did not apply nor did
rules governing continuation of service. The lack of continuation
of service means that the affected workers are considered new
starters and have also lost many of their employment rights for a
two year period.
The latest revelations demonstrate that initial government
indications that Carillion’s collapse would not impact the taxpayer
are decidedly wide of the mark.
Accountancy firm PwC, who were engaged by the Insolvency Service to
break up Carillion and transfer its outsourcing contracts to new
providers are expected to have earned around £50 million from the
company’s collapse. As Carillion had just £29 million left in the
bank when it met its demise, much of PwC’s bill will be picked up
by the taxpayer.
The taxpayer will also have to pick up the bill for the work to
complete several of Carillion’s key strategic projects including
the Royal Liverpool Hospital and the Midlands Metropolitan
Hospital, in Sandwell west midlands. The cost of concluding these
projects is expected to be in excess of £100 million.
Unite assistant general secretary Gail Cartmail who revealed the
cost to the taxpayer of Carillion’s redundancies during her speech
today (Monday 24 September) at Labour party conference
said: “These latest figures demonstrate that the taxpayers
have had to pick up the tab for the greed and recklessness which
led to Carillion’s collapse.”
“While the directors and senior executives of Carillion have
largely slithered off into lucrative new roles it is the taxpayers
who have been left to pick up the pieces from their mess.
“These revelations further underline why the government must order
a full public inquiry into Carillion’s collapse to not only
understand who was responsible for the greatest corporate failure
in UK history but also the total cost to the taxpayer.
Additionally the police need to undertake an immediate criminal
investigation into those responsible for Carillion’s collapse. If
no laws were broken then we need better stronger laws to prosecute
the guilty.”
