· 3 min read · Features

What companies need to know about the new blacklisting regulations


Last year, a private investigator pleaded guilty to running a blacklisting service on building workers. Ian Kerr ran an agency that ran checks on individuals and had a database containing details of trade union and political affiliations of some 3,200 workers in the construction industry, which were used to effectively prevent them from working in the industry. The Information Commissioner's Office (ICO) prosecuted but the fine imposed by the Crown Court - 5,000 - was criticised for being far too low and an insufficient deterrent to others. The particularly sinister aspect of this case was that the list was bought by subscribers, including a number of large reputable construction companies, who clearly saw nothing wrong with denying employment to people considered undesirable due to their union affiliations.

New regulations introduced

As a result, the Employment Relations Act 1999 (Blacklists) Regulations 2010 were recently introduced, and have now been in force since 2 March 2010.  Government guidance has also been issued by Department for Business, Innovation and Skills (BIS). Subject to certain exemptions, the regulations make it unlawful to compile, use, sell or supply ‘prohibited lists'.  Candidates and employees now have the right not to suffer a detriment (such as not being employed, having a job offer withdrawn, or being refused the services of an employment agency) or to be dismissed if the reason is connected to a prohibited list, and can seek redress through the employment tribunals or county courts. 

What is a prohibited list?

A prohibited list is one that contains details of people who have been members of trade unions or who are taking part or have taken part in trade union activities. This would not cover someone who has taken part in unofficial industrial action, and the Union of Construction, Allied Trades and Technicians (UCATT) has criticised the definition as being too narrow. The prohibited list must be compiled with a view to being used by employers or employment agencies for the purpose of discrimination. 

The guidance also makes it clear that an unstructured collection of information could amount to a prohibited list if the information is used for the same prohibited purpose. Information contained in blogs, for instance, could be a prohibited list.

When might a prohibited list be allowed?

Certain exceptions apply, such as where the list is justified as being in the public interest, such as a journalist or whistleblower who is seeking to demonstrate a breach of the regulations.  If the purpose of the list is to ascertain the suitability of a job requiring knowledge or membership of trade unions, or where the list is used in connection with legal proceedings, there will be no breach of the regulations.

What remedies and penalties are available?

It is automatically unfair to dismiss someone if the main reason for the dismissal relates to a prohibited list.  Complaints of unfair dismissal can give rise to compensation in the employment tribunal of up to £65,300, including an award for injury to feelings, with a minimum award (in most cases) under the regulations being £5,000.  However, these awards can be reduced by the tribunal if appropriate - for example, if the employee was listed due to his violent conduct. 

Remedies are not just financial - the tribunal can make a declaration that a breach of the regulations has occurred, or make a recommendation that the respondent take action to ameliorate the effects of the unlawful act.

Remedies have been criticised by UCATT because they are only available where the person has actually suffered loss or is threatened with potential loss resulting from unlawful activities; they are not available simply because the person's name appears on a prohibited list.  UCATT has also said that the regulations are deficient because they do not make blacklisting a specific criminal offence.

Organisations should be wary of subscribing to or making use of blacklists because of the new powers that will soon be available to the ICO to impose large fines of up to £500,000. These can be imposed where the ICO believes the contravention to be of a kind likely to cause substantial damage or distress and believes the organisation either deliberately flouted the Data Protection Act or should have known of the risk and did nothing to prevent it.  

What processes should be implemented in response to the regulations?

All organisations need to consider the impact the regulations may have on their businesses.  Recruitment processes should be centrally controlled and carefully managed so as to ensure that blacklists are not used, knowingly or inadvertently. Managers should also be made aware of the risk to the business of contravening the regulations and, in particular, should be trained to identify information that could constitute a prohibited list. Whistleblowers should be encouraged to use existing policies to bring possible contraventions to the attention of management, particularly in light of the enhanced powers of the ICO to impose large fines on reckless or negligent businesses."

Piers Leigh-Pollitt is a partner at Doyle Clayton employment solicitor, the UK's largest specialist employment law firm