Union bosses have called for a ‘moratorium on outsourcing’ as thousands of workers face losing their jobs in the wake of the collapse of Carillion.
The firm, which entered liquidation on Monday, employed around 20,000 in the UK.
Cabinet minister David Lidington on Monday confirmed that the government would step in to support the roughly 11,000 Carillion staff working on public sector contracts but gave workers on private sector trade contracts a 48-hour ‘period of grace’.
This offer was designed to give the private sector time to step in and take over.
Mr Lidington told Parliament: 'Private sector employees will not be getting the same protection we offer to public sector employees beyond a 48-hour period of grace, during which the government will sustain the Official Receiver to give time for the private sector counterparties to Carillion to decide whether they want to accept termination of those contracts or themselves to pay for the ongoing costs. I think that is a reasonable gesture.'
The GMB estimates around 8,500 Carillion construction staff could see their wages stopped today.
Tim Roache, general secretary of the GMB union called for ‘a moratorium on outsourcing for now’ today and the union is asking private firms to step in and secure jobs on the same terms and conditions.
GMB has also claimed that government told employees that if another private sector company had not taken them on by then, 'then here's the Job Centre Plus address'.
Mr Roache told the BBC this was 'frankly scandalous' and said he had called on business secretary Greg Clark to set up a task force to help businesses and staff affected by Carillion's collapse.
The Financial Times has revealed that Carillion was left with just £29m in cash when it collapsed and owed around £2bn in total to 13 banks.
In documents seen by the newspaper, Keith Cochrane, the company’s interim chief executive, stated was so little funding available that the consultants PwC and EY both rejected requests to become administrators amid concerns they would not be paid.
This makes bleak reading for some 30,000 businesses owed around £1bn by Carillion.
Register now for full access
Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.
Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors.
Use the link below to register your details for full, free access.
Already a registered? Login
