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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 543-iii
House of COMMONS
TAKEN BEFORE the
Scottish Affairs Committee
BLACKLISTING IN EMPLOYMENT
Tuesday 3 September 2013
Evidence heard in Public Questions 2950 - 3101
USE OF THE TRANSCRIPT
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Taken before the Scottish Affairs Committee
on Tuesday 3 September 2013
Mr Ian Davidson (Chair)
Mr Alan Reid
Examination of Witness
Witness: Peter Cheese, Chief Executive, Chartered Institute of Personnel and Development, gave sworn evidence.
Q2950 Chair: I open this meeting of the Scottish Affairs Committee and welcome Peter Cheese, our witness today. In introduction, let me say that the Committee started off by looking at health and safety in Scotland. We discovered that health and safety records were worse in Scotland, in the sense that there were more accidents, and investigated that. One of the factors that came up was the question of fear of blacklisting and blacklisting itself, which was an explanation of why people were not coming forward as health and safety reps. That led us to examine a whole number of other areas, which have gone UK-wide. You will probably be aware of most of the background to our recent inquiries in the context within which you have been brought here today.
Peter Cheese: Indeed.
Q2951 Chair: Could you introduce yourself and tell us about the organisation and a little bit about your own background?
Peter Cheese: I would be pleased to. As a brief word of introduction, my name is Peter Cheese and I am the chief executive of the Chartered Institute of Personnel and Development, which is the professional body for HR and workplace learning. I have been in the organisation as chief executive since July last year. Prior to that, I had a very long career in Accenture.
I will tell you a little bit about the remit and focus of the CIPD. We are the professional membership body for individuals working in HR. We have members across all sectors, public and private. We support HR professionals through a combination of education, research, advice, guidance, professional development and accreditation, against rigorous professional standards and through our code of professional conduct. It is important to note that we are not a statutory regulator or a licence-to-practise body. Equally, we do not represent companies-we represent individuals, organisations or particular industry sectors.
In terms of our response to blacklisting-hopefully you have read the note that we submitted to the Committee beforehand-we very much welcome the Committee’s inquiry into blacklisting. We take the issue very seriously. I condemn the practice, which must not happen again. In our written evidence to the Committee, we have set out in detail the steps we have taken to address this issue, which I will highlight very briefly.
First, we have strengthened our professional code of practice and code of conduct, and our investigation and disciplinary procedures. Secondly, we have launched investigations into those individual members who are alleged to have made use of the Consulting Association’s services. Thirdly, we are developing new good-practice guidance on the wider issue of pre-employment vetting. This will clearly restate that blacklisting is illegal but will also broaden out to address the more complex current and future issues that we believe surround pre-employment vetting, particularly the potential for managers to use online search and social media for this purpose. I look forward to discussing these issues further with the Committee.
Q2952 Chair: First, can I clarify what membership of CIPD means, in a sense, to the individuals?
Peter Cheese: We have different categories of membership, but to be a fully chartered member-which would entitle you, for example, to the use of post-nominals recognising that you are a chartered member-you require a qualification that we recognise that shows that you have both the underlying skill sets and the knowledge and practice, or practical experience, of applying those skill sets and can demonstrate that in practice. So it is a fairly rigorous process. That gets you to chartered member status. We also have affiliate member and student member statuses, so there are slightly different categories for different groups.
Q2953 Chair: Apart from being a register, as it were, what does membership of CIPD mean for people? Do you get a weekly bulletin? Why should anybody want to join?
Peter Cheese: Why should anybody want to be a member? First and foremost, it is about a professional recognition: I have a level of competence and knowledge that is acknowledged and recognised by the professional body, the CIPD. Secondly, we provide a lot of services to members, which include providing up-to-date information on current issues such as employment law changes. They can access our research in particular ways in which others cannot. We have branch meetings, discussion forums and all sorts of ways in which we network and share knowledge between HR practitioners and professionals. Ultimately, I would describe the purpose as being to increase the professionalisation of HR as a function.
Q2954 Chair: But if somebody who has a job in personnel, human resources and so on does not want to join your organisation, are they perfectly free not to do so?
Peter Cheese: Correct. We are not a licence to practise. It is not required that you be a member of the CIPD or, indeed, have CIPD qualifications in order to practise in HR. As I said, I believe quite strongly that we need to promote more of that as an accepted normal practice.
Q2955 Chair: What percentage of the number of people who would be eligible to join are actually members?
Peter Cheese: As you probably appreciate, the total definition of everybody in HR is a little bit fuzzy at the edges, but we estimate it to be around a third of practising HR professionals today. If you are familiar with the world of accounting and finance, you will know that there are six or seven different professional bodies in that world. We are the only professional body in HR in the UK, so if you are not a member of us-
Q2956 Chair: Surely the difference with groups in finance and accounting is that it is necessary to be a member of at least one of those or to pass their exams in order to practise.
Peter Cheese: That is correct.
Q2957 Chair: So you do not have that right.
Peter Cheese: Yes. That is what I mean by a licence to practise.
Q2958 Chair: So two thirds of people involved in this field are not your members.
Peter Cheese: Correct.
Chair: Lindsay wants to pick up something.
Q2959 Lindsay Roy: Your mission is to improve the quality and standard of professional development. What have you found to be the main shortcomings so far? Why is this necessary? What are the key things that you are trying to address?
Peter Cheese: We are trying to address a range of things. First, we are trying to encourage more consistent practice in HR. HR is a very wide space. It includes things that the Committee has been looking at around recruitment, all the way through to the development of people, the engagement of people in an organisation, building the right sorts of cultures, developing leadership and talent in the right ways, performance management and so on.
As a professional body, we are trying to ensure that people are current in their knowledge of what good practice is and to spread that good practice as far and wide as we possibly can. Ultimately, through our membership, we want to ensure that people have the qualifications; that they can demonstrate the use of their skills in practice; that they have continued professional development, because there are lots of things in the world of HR that change over time; and that they adhere to our codes of professional conduct.
Q2960 Lindsay Roy: Can you highlight for us the main shortcomings-the things that need to be addressed by most people who are involved with your service?
Peter Cheese: Interestingly, I would say that one of the biggest shortcomings in many organisations is that we are not adequately training managers to do a lot of this work. If you imagine that HR is a function, it is an enabling function that provides the processes. Let us take performance management. We are prescribing the processes of performance management, but the practice of performance management is carried out by the managers. I have long believed-I have said this publicly and written a lot about it-that we need to improve the training of managers in most organisations. That is certainly one thing that I would say.
Secondly, a related point is that sometimes in the world of HR we are not clear and distinct enough about why we do things. There is too much process, too much bureaucracy and too much procedure without real clarity about why we need to do these things and what we should be most focused on. Those are two good examples of things that I have been saying for a long time and that we as a professional body are certainly trying to promote.
Q2961 Lindsay Roy: Would it be fair to say that quality is variable?
Peter Cheese: I would agree that quality is variable. Again, that is why we are seeking to extend the membership to embrace more people in the profession and to apply these kinds of standards.
Q2962 Lindsay Roy: You are trying to drive up standards.
Peter Cheese: Absolutely.
Q2963 Lindsay Roy: And that includes areas such as vetting.
Peter Cheese: It includes all areas of HR.
Lindsay Roy: We will come back to that later.
Q2964 Chair: Can I turn to the construction industry? What proportion of your members work in construction?
Peter Cheese: It is about 2.5%.
Q2965 Chair: Earlier, you indicated that about a third of the people working in the field are members of your association. Is that roughly the same in construction?
Peter Cheese: It is roughly the same in construction. We survey our membership on a fairly regular basis, and it is fairly consistent across most sectors. Interestingly, I think the public sector has a higher proportion of members.
Q2966 Graeme Morrice: When did you first become aware of the activities of the Consulting Association?
Peter Cheese: When the ICO raided its offices in 2009.
Q2967 Graeme Morrice: What was your reaction to that?
Peter Cheese: We were quite public in our reaction to it. My predecessor condemned it publicly and said that this kind of practice should not happen and that we as a professional body wanted to work to ensure that we were prescribing better standards and practice for future behaviour.
Q2968 Graeme Morrice: Earlier, you mentioned that you are currently conducting an investigation into those of your members who were involved in this in the past. Can you give some details of that?
Peter Cheese: I would be happy to, within the limits of our own process. We are conducting an investigation into 19 people. That is based on evidence that has come into the public domain about their potential use of the Consulting Association and the blacklisting process. They are in an investigation at this point in time. That investigation is not yet complete.
Q2969 Chair: Could I have you sworn in at this point? We have sworn in some witnesses at the very beginning, but we thought we would have a little introduction, as it were. (Peter Cheese was sworn) Before I pass you back to Graeme, could I clarify a point? You joined the organisation relatively recently-from Accenture, where presumably it is much more genteel than in some of the rough areas such as construction. You were asked when you first became aware of this. We want to be clear about whether you are speaking as an individual and to clarify when the organisation was first aware of the blacklisting.
Peter Cheese: That was really my response to the question. That was when the organisation first became aware of it-in 2009.
Q2970 Chair: I find that difficult to believe, I must confess. Are you seriously telling us that, in an organisation with thousands of people working in personnel, none of them knew anything about blacklisting going on and there had never been any discussion of it? Are you saying that nobody knew anything about this, when it went back through the Economic League and had been prevalent in industry in Britain for quite a long time?
Peter Cheese: As you know, the practices have been incredibly covert and very hidden. On our record, there is no public discussion of any of these sorts of activities. No complaints were brought to us directly as a result of these activities, if they existed.
Q2971 Graeme Morrice: Your website states, "We know what good HR looks like." Do you accept that HR managers who served as main contacts for the Consulting Association were acting unethically?
Peter Cheese: Could you repeat the question? Did you ask whether the HR managers using the Consulting Association were acting unethically?
Graeme Morrice: Were the HR managers who served as main contacts for the Consulting Association acting unethically?
Peter Cheese: First, one has to be careful about the evidence. I do not want to talk about evidence about individuals, which is still ongoing. As I said, we condemned the practice of blacklisting-period. Although at the time-perhaps you are pointing to this-that practice was not strictly speaking illegal, certainly by the definitions that are now prevalent under the Employment Relations Act, for example, I would certainly regard it as unethical.
Q2972 Graeme Morrice: Earlier you made reference to the investigation you are currently conducting, and we had some discussion surrounding that. You mentioned that you are looking at 19 individuals, in particular. Obviously, we are looking at allegations, and these things need to be bottomed out, but what sanctions or punishment could be taken against these people, if indeed they are found to be guilty?
Peter Cheese: If our processes find that they have a case to answer, we will take them through a disciplinary process. As I said in my opening statement, we are not a statutory or legal body. In the first instance, it might be a reprimand. It might be a suspension of membership, there might be a recommendation for further training, or they could be expelled from the membership of the CIPD. Ultimately, those are our sanctions.
Q2973 Graeme Morrice: At the conclusion of this process, is it your intention to publicise all of this information?
Peter Cheese: As part of any of our disciplinary reviews, the question of whether it is in the public interest and the interests of the HR profession as a whole for any of those investigations, if they are proven cases, to be brought to public attention is left with the disciplinary panel.
Q2974 Graeme Morrice: Do you not think that this matter is in the public interest?
Peter Cheese: As I said, I do not want to prejudge the outcome of the process.
Graeme Morrice: Of course.
Q2975 Chair: Can I clarify the point? Surely there is potentially a contradiction between the public interest and the interests of the HR industry as a whole, because it would probably be in the public interest to know, but it could very well be in the interests of the HR profession to cover it up and pretend that nothing had happened.
Peter Cheese: That is an interesting point. I would hope that the two things would come together. As I said in response to some of the earlier questions, I believe that good HR practice is ethical, is nothing to be ashamed of and is something we should all stand behind, so we are acting in the public interest. That is what we seek to promote.
Q2976 Chair: With respect, that was not really an answer-that was just a comment. If you find yourself in a position where somebody is being expelled, you can see how it is not necessarily in the HR industry’s interest to broadcast the fact that you have black sheep in the family, but it would certainly be in the public interest to know that.
Peter Cheese: If the evidence shows that somebody should be expelled from the professional body-which, as I said, is our ultimate sanction on this-I probably would not disagree with you. In that case, it is very likely that they have acted in such a way as to bring the profession into disrepute and, therefore, in a way that should be publicly disclosed. However, I cannot make that judgment call. It is not my position to do so-that is for the disciplinary process we go through.
Q2977 Chair: That is right. Can I clarify how many people you have expelled to date-ever?
Peter Cheese: It is a small number.
Q2978 Chair: A thousand? A hundred?
Peter Cheese: No. It is probably more in the order of fewer than 20.
Q2979 Chair: How many of those have been publicised?
Peter Cheese: To be honest, I would have to check that for you. I can come back to you on it.
Q2980 Chair: So there has not been a general policy of making the public aware that somebody has been expelled.
Peter Cheese: I would not say that that was necessarily true. As I said, I would have to check the exact numbers.
Q2981 Chair: It is not unreasonable for us to have expected you to anticipate this line of questioning.
Peter Cheese: I think that is fair.
Q2982 Chair: Perhaps you could give us a note subsequently of the cases involved, with an indication of where the details of the individuals were made public. Where they were not made public, presumably you can give us an explanation of why that was deemed not to be of public interest. So a handful of members have been expelled. What about other sanctions? You mentioned a gradation of penalties. What sort of numbers are you dealing with when you look at these disciplinary matters?
Peter Cheese: I know I have some of those data here, if you will bear with me; it is tough to remember all the numbers. I will try to find the right piece of paper.
One point that I made to you is that we have improved the robustness of our processes and practices. What I can tell you is that, under the old codes, for the preceding six years-2006 to 2012-we had 170 complainants, only 11 of which proceeded to a hearing. Seven were expelled from membership. The new disciplinary procedures, which we believe are more robust and fit for purpose, came into force just over a year ago. They have been in operation for only one year, so the data are less complete, but we have had 44 complaints submitted. As I said, we are going through a process with 19 people, with evidence in the public domain relating specifically to blacklisting activity.
Q2983 Chair: I am sorry, but I did not catch the last phrase-19 people in the public domain where?
Peter Cheese: There are 19 people whom we are investigating on the basis of information in the public domain about potential involvement in blacklisting.
Q2984 Chair: So under the new regime nobody has been expelled-is that right? You gave me figures under the old system, and you have just mentioned that under the new system 19 are being investigated in relation to blacklisting, but I do not know whether that means that any penalties have been-
Peter Cheese: I think it is true to say that we have not yet expelled anybody under the new code of practice, because we still have a number of cases in progress.
Q2985 Lindsay Roy: Can you give us an indication of the reasons for expulsion of those who were expelled between 2006 and 2012?
Peter Cheese: They would be broadly in line with some of the things that we describe in our current code of practice. If you would like me to read out some of the areas that we investigate under the code of practice-
Q2986 Lindsay Roy: Given the small number, I would have thought that you would have a good idea of the reasons for the expulsions.
Peter Cheese: This predated my joining the organisation-
Q2987 Chair: We ought to make it absolutely clear that generally we do not accept from individuals arriving on behalf of organisations that there is a cut-off point before which they cannot answer questions, as it were. We expect them to have consulted with the collective memory in some way to make sure that they are aware of these issues. It seems to me that the point that is being made is not unreasonable. If you wish to consult your minders, by all means feel free to do so, if it would help us.
Peter Cheese: Given the nature of the conversation, I will take a minute or two to do that, if you would not mind. [Interruption.] Under the prior code, we did not have the right to make it public. That was one of the things we changed in the new code. In deference to the questions, I would be happy to come back to you, because we do not have the information on what specifically people were held in breach of the code for before. I can say that we did not make it public, because we did not give ourselves that right. We have now given ourselves that right, through the new code of practice.
Q2988 Chair: So in the collective memory there is no recollection at all of anything for which somebody was expelled.
Peter Cheese: No, I would not say that at all-it is just not in the collective memory of the individuals sitting here, unfortunately. I need to talk to my secretariat, which runs the process. She will have that information; we just do not have it to hand.
Q2989 Lindsay Roy: But you will provide it.
Peter Cheese: We are happy to provide that information. That is something that she would like to see.
Q2990 Graeme Morrice: On that basis, you would agree that it is in everyone’s interests on this particular topic that the process and the eventual outcome are as transparent as possible, because that is in the public interest.
Peter Cheese: I would make a distinction between the process and the outcome. Under our code of practice, the process is one that is conducted as a confidential and discreet process. I am not privy to it-as I said, it is run as a discreet and confidential process-so there is nothing that I can say about the conduct of the process as it currently stands. We can really talk only about the outcomes of the process.
Q2991 Graeme Morrice: So you would at least agree that the outcomes should be made publicly available.
Peter Cheese: As the Chairman said, it would depend somewhat on the nature of the thing, I suppose, but if somebody has been found with the evidence and been taken through a disciplinary process, and the ultimate sanction is that we have ejected them from the membership, I would think that that is information that we should share, because if we want to uphold standards we should be talking about that. As I said, I really cannot prejudge existing processes, but I take the point.
Q2992 Chair: If somebody has been found not guilty, as it were, I can clearly see why that person deserves to have their confidentiality respected. If, on the other hand, they are expelled, I can think of very little good reason not only why their name should not be known but also why the company, the context and the evidence should not be made public. Does that seem a reasonable set of suppositions to you?
Peter Cheese: I certainly agree on the name and the circumstances. I do not think that you can just name a name-you have to give the circumstances that indicate why they have been ejected and what they did. On that basis, I think it is reasonable to suppose that, if the evidence is clear, we have gone through a disciplinary process and we have taken the ultimate sanction of ejecting them, we would expect the information to be made available.
Q2993 Chair: That is right. We are interested in clarifying the point. I had not thought of this line of questioning until we got into it just now, but given how murky much of this area is, if you have found that there is sufficient evidence to expel somebody for undertaking various blacklisting activities, it would undoubtedly be helpful in terms of the greater good of mankind to have that evidence available, as well as simply the decision.
Peter Cheese: Yes, I think I would accept that. As I said, we have condemned blacklisting. We should therefore be public if we have found through our processes that somebody is guilty of it.
Q2994 Chair: Can I clarify whether you are speaking on behalf of the organisation here, or whether you could say all of this and then go back and find that you have been overruled? Could the committee say, "No, you may have said that, but we do not agree?" I am genuinely uncertain.
Peter Cheese: It is a fair question. I would say that that is what I believe and what I would expect the organisation to do. As I said, what I know and have been told of the final process relating to the point of public disclosure is that there is the phraseology "in the public interest and the interests of the profession". What you are questioning is whether you could draw a line between those two things. In cases like this, I am not sure that you could. We have condemned it as a bad practice and want to promote good practice; we should therefore provide that information.
Q2995 Chair: Can I clarify what you expect to be the timetable for taking of evidence and for conclusions being drawn and decisions made?
Peter Cheese: As I said, we have investigations ongoing. We are in this process because, as you know, there are other tribunals and hearings going on and other evidence is coming to light, so we are trying to make sure that our ongoing processes do not prejudge that or miss something. That of itself means that it will be months, in all reality, before these processes will be concluded.
Q2996 Chair: But "months" can be three or five months, or 120 months, or 795 months. Can we anticipate something within 18 months?
Peter Cheese: Yes. I would say that within 18 months is a reasonable expectation.
Q2997 Chair: Okay. It would be helpful if you would agree that you will notify the Clerks as and when decisions are taken. We can then decide whether or not to respond, depending on whether you have made things clear and open-or not. We would want to know when decisions have been taken, even if you have decided not to name those whose cases have been progressed. I think we would want to know when people have been cleared as well. If you decided not to name the individuals, we would not want to know who they were; we would respect your decision with regard to that aspect of it.
Peter Cheese: I would be happy to do that.
Q2998 Chair: Thank you very much. There was one other point. Graeme asked you whether or not you thought people had been acting unethically. You qualified that in your response by saying that it was not illegal. But the fact that it was not illegal-
Peter Cheese: -did not make it unethical.
Chair: I am sorry?
Peter Cheese: It did not make that unethical-that was my point.
Q2999 Chair: Yes. I just wanted to be clear that you were not hiding behind the idea that, because it was not illegal, it was therefore not unethical.
Peter Cheese: Definitely not. I think there are many things in modern life where we now say that there is a boundary of what is legal but we are trying to promote a broader sense of what is ethical.
Q3000 Chair: As a number of people are finding out about their tax relationships at this very moment.
Peter Cheese: Indeed. There are plenty of examples.
Q3001 Chair: Perhaps I drew the wrong conclusion earlier when I assumed that life with Accenture was much more genteel than with the ruffians of the construction industry. I understand that Accenture was doing the HR functions for Carillion and a number of other construction companies. Were you directly involved in any of that?
Peter Cheese: No, I was not directly involved in any of that.
Q3002 Chair: So you have not been directly involved in any construction HR work before.
Peter Cheese: No, I have. On your point about the rosy world of Accenture, obviously my time was spent with organisations of all shapes and sizes, including within the construction sector, on consulting advice around HR.
Q3003 Chair: Right. I just want to be clear about this. So you have been involved in providing consulting advice on HR, but you have never been aware at any stage that there was anything like blacklisting going on.
Peter Cheese: No, I was never aware of that.
Q3004 Mr Reid: You said that you were investigating 19 of your members. Can you tell us what the criteria are for deciding whether or not to mount an investigation?
Peter Cheese: Yes. We mount an investigation when we can see that there is evidence that an individual has contravened our codes of practice. There are two ways we can do that. One is when a complainant comes to us and says, "We have evidence that one of your members has contravened your codes of professional conduct." The other way, which we did not have before but is now part of our new codes of practice, is that we can decide to take action or to investigate our members based on evidence that has come to light.
Q3005 Mr Reid: How many of your members did you receive complaints about with regard to blacklisting?
Peter Cheese: As I said, under the old codes of practice there were 170 complaints in the period 2006 to 2012.
Q3006 Mr Reid: Were those about 170 different individuals?
Peter Cheese: Yes, so averaging about 28 a year. It has gone up a bit since then. I think I said there had been 44 in the last year.
Q3007 Mr Reid: So you received 170 complaints about individuals but you decided to investigate only 19.
Peter Cheese: I refer back to the fact that we are not a statutory body. We have to act on the basis of evidence. We can chase stuff around, but we cannot compel people to provide evidence. So we have a two-stage process. The first is the investigation, which says, "Do we believe there is sufficient evidence to put somebody through a disciplinary hearing?"
Q3008 Mr Reid: So you are saying that there were 170 complaints and that in 150 cases you decided there was not enough evidence. Is that correct?
Peter Cheese: That is correct.
Q3009 Mr Reid: Can you tell us what the threshold is for sufficient evidence in relation to blacklisting?
Peter Cheese: I suppose it would be broadly similar to what you might expect in an employment tribunal-type process.
Q3010 Mr Reid: Which is?
Peter Cheese: That there is evidence of a practice-in this case, blacklisting- and that there are sufficient witnesses or other sources of evidence we can then call on to take action. We call witnesses, for example, just like an employment tribunal.
Q3011 Mr Reid: So at the first stage, which relates to the 170 cases, you would call witnesses.
Peter Cheese: Correct.
Q3012 Mr Reid: What sort of threshold is used? Is it beyond reasonable doubt or balance of probabilities? What test do you adopt?
Peter Cheese: I would say that beyond reasonable doubt is probably the sort of criterion that we have been applying.
Q3013 Mr Reid: If you decide not to proceed to an investigation, is the individual who made the original complaint notified of that?
Peter Cheese: Could you repeat the question?
Mr Reid: If somebody made a complaint to you against one of your members and you decided not to proceed to an investigation, would the individual who made the original complaint be notified?
Peter Cheese: No, not as a standard practice.
Q3014 Mr Reid: So if I make a complaint against one of your members, I will never be told whether or not my complaint proceeded to an investigation.
Peter Cheese: I am sorry. You are asking whether you as the complainant would know; I thought your question was about whether the member would know that a complaint had been made. You as the complainant would know about the outcome, but if we decided not to go through the process and the investigation, the member would not know.
Q3015 Mr Reid: So you tell the complainer that you are not proceeding to an investigation. Does that complainer then have any rights to produce further evidence or to appeal against that decision?
Peter Cheese: Yes, there is an appeal process, but they can, of course, bring additional evidence if they have it. That is the purpose of the process-to see whether we can uncover further evidence that will substantiate the complaint.
Q3016 Mr Reid: In the 150 cases that did not proceed to an investigation, how many of the complainants, if any, complained about that decision?
Peter Cheese: Again, I do not have the information to hand; I do not know whether we do between us. If that is something the Committee would like to know, I am sure we can find it.
Q3017 Mr Reid: When you are deciding whether or not to investigate one of your members, would the fact that the employer had instructed the individual to take part in blacklisting be a defence for the individual, or would it still be deemed unethical even if they were acting under orders?
Peter Cheese: It would still be deemed unethical. The fact is that they carried out the practice.
Q3018 Mr Reid: During the time when the blacklisting was going on but before it became illegal, were your members aware that blacklisting was unethical?
Peter Cheese: I certainly know that we communicated on these sorts of issues. As I said, part of our role is to raise standards and practices. We do that in a variety of ways-at the basic level, through training in employment law, but more particularly, by building on that in terms of what we regard as ethical and good practice. In that sense, yes, absolutely-I believe our members would have been aware that blacklisting was not something that we supported or believed was the right sort of practice.
Q3019 Mr Reid: How would they be aware? Would it be through circulars or regular bulletins?
Peter Cheese: There would be a variety of things, all the way from basic and initial training through to continued professional development, staff discussion forums and things of that nature.
Q3020 Mr Reid: So would you think it reasonable to assume that senior HR employees of construction companies knew that blacklisting was unethical?
Peter Cheese: I think it would be reasonable to assume that, but part of the challenge is that we are going back 10 or 20 years and-as we are doing in many different contexts, as the Committee will be well aware-looking today at practices that happened that we now see quite clearly are not just illegal, to respond to a point that was made earlier, but thoroughly unethical.
Q3021 Mr Reid: But would you think it reasonable to assume that in 2008 your members would have known that blacklisting was unethical?
Peter Cheese: I believe that would be a reasonable assumption.
Q3022 Mr Reid: Do you think it is plausible that your members were carrying on blacklisting without the knowledge of their employer?
Peter Cheese: Again, I would have to defer to the evidence on that, but I think that some of the evidence in the public domain that I have seen would suggest that in some cases HR practitioners seemed to be acting not necessarily with the full "knowledge" of their employer.
Q3023 Mr Reid: What do you mean by "full knowledge"?
Peter Cheese: The knowledge of their employers.
Q3024 Mr Reid: Without any knowledge of their employer?
Peter Cheese: I do not know that I can say that unequivocally; I do not have the evidence. However, I have seen some of the transcripts of evidence that has been given in front of this Committee, and there have been some suggestions by a number of employers that it was not they who were directing HR in that sense.
Q3025 Mr Reid: Do you think it is plausible that HR managers were carrying on this practice and deliberately concealing it from their employer?
Peter Cheese: As I said, I do not want to comment on individual cases, but I do not have anything to tell you that would enable me to say that that was not happening.
Q3026 Mr Reid: There were several negatives there, I think.
Peter Cheese: I am sorry-there were too many double or triple negatives. I could not say that that was not happening.
Q3027 Mr Reid: You could not say-
Peter Cheese: In other words-to answer your question-that HR professionals were acting without the knowledge of their employer. So they could have been doing it.
Q3028 Mr Reid: So it is plausible that they could have been doing that.
Peter Cheese: It is plausible.
Q3029 Chair: You do not have a legal background, by any chance, do you?
Peter Cheese: Sadly, not.
Q3030 Chair: I thought I would just clarify that.
Peter Cheese: I am sorry-I did not give a very good answer to that question.
Q3031 Mr Reid: As you will know from evidence, major construction companies have come to us and told us that they have changed their procedures since the Information Commissioner’s raid. Did they come to you for advice on these changed procedures? Have you seen these new practices? Do you think that the new practices are now ethical?
Peter Cheese: We have been working through a process. As I said, one of the actions we took was to say, "Let’s update and improve our view of what good practice should be." During that process, we talked to a number of the construction companies, as well as to a number of the industry bodies, because I think there is a collective desire through the industry to improve practice in this regard. That is something we want to support.
Q3032 Mr Reid: Has your organisation produced a model code of practice with regard to blacklisting?
Peter Cheese: We have a code of practice-or code of conduct-that covers all legal behaviour. As I said in response to an earlier question, it is not just about what is legal-it is about what is ethical as well. It covers all of employment law, of which blacklisting is clearly a part.
Q3033 Mr Reid: Have any of the big construction companies asked you to review their new codes of practice?
Peter Cheese: I do not believe they have done so directly. However, as I said, we have been talking to a number of the companies in the development of those practices. We are continuing those conversations. I think that is a good point-we should expressly talk to them about what codes of practice they are putting in place.
Q3034 Mr Reid: So am I right in saying that, although these companies have reviewed their codes of practice, none of them has actually come to you and said, "Do you agree that this is an ethical code of practice?"
Peter Cheese: Just to clarify your point, is it specific to recruitment practice?
Mr Reid: With respect to blacklisting.
Peter Cheese: First and foremost, every company has been clear-and we have been clear to our membership-that blacklisting is illegal. I think I can say with great clarity that nobody in our membership is in any doubt about that. So that part of the practice is clearly there. What we are now debating is whether there are further elements of practice that could speak to-
Q3035 Mr Reid: If I am an HR manager in a company and I am asked to follow the code of practice that that company has adopted, can I be confident that that code of practice has your seal of approval?
Peter Cheese: To answer that question directly, not absolutely. It goes back to the earlier part of the conversation. I want us as a body to have a greater impact across the profession. I think it is about professionalisation; this would be an example of that. Organisations have been trying to develop better internal practices on some of these matters, but earlier you asked me whether I could be sure that all of them were acting to a consistent standard and to something that I believe is the right thing. The answer is no, I cannot.
Q3036 Mr Reid: Just to be clear, none of these big construction companies have put their amended codes of practice before you and asked for a seal of approval.
Peter Cheese: Can I check with my colleagues? [Interruption.] No, they have not.
Mr Reid: None of them has.
Q3037 Chair: Can I seek clarification on a point about companies’ public statements of ethics and intention, codes of practice, mission statements and all these sorts of things? Very often, it has been our experience that people’s actual behaviour is wildly at variance with their stated intentions and objectives. There are many people with enormously fine-sounding ethical objectives who would murder their granny for profit. What I am not clear about is whether in these circumstances there is an expectation that an HR professional would, in a sense, blow the whistle on their own employers to you as an organisation if they came across behaviour that was unethical.
There must have been some people in the HR industry who were aware of blacklisting and were not entirely supportive of it-we have had evidence both privately and publicly of some people who declined to participate in this-but who would have had the opportunity to blow the whistle, had such an opportunity been available. I wonder whether you see yourselves as providing an avenue for people who, obviously, do not want to be identified and therefore do not want to complain within their own company structure but who want to report anonymously to a body such as you that could then go to the very top level of the company and say, "Look, we are worried about various practices."
Peter Cheese: Yes.
Q3038 Chair: What steps have you taken to pursue all of that?
Peter Cheese: The context that you are describing is something I feel very strongly about. You are absolutely right-there are far too many examples of organisations that espouse certain values but whose behaviours quite clearly deviate from those. Whether you are talking about financial services, media companies or whatever, there are endless public examples of that, which is a pretty sad state of affairs. We have been campaigning very actively on a lot of those things. For example, we are working with the City Values Forum, which was instituted by the lord mayor to promote more ethical practice across the City and to put a little bit more teeth and understanding behind what are corporate values and how people behave to them.
You are extending the point, I suppose, towards the notion of whistleblowing. If I am an employee and can see quite obviously that, although I have these stated values of integrity or whatever it might be, my boss or my colleague is not acting in accordance with those, what is my recourse? To me, whistleblowing is the ultimate sanction-the ultimate evidence of an organisation that does not have an open and transparent culture. First and foremost, that should work through my ability to call out with my colleague that they are not acting in accordance with the values. Secondly, to pick up a role that I believe is there for the HR function, it should be possible to talk to HR about it.
We have already submitted a consultation paper to BIS, which, as you know, has started a consultation on whistleblowing and this whole wider debate. The first point we stress is that what we need to do first and foremost is to promote better management, more open cultures, a clear understanding of values and, to respond to your earlier point, a clearer understanding of performance management, so that my performance is not managed and assessed just on the fantastic sales number I have delivered but on how I did it. How did I behave? Did I behave in accordance with the values? We are very active in the promotion of those notions and reinforcing the idea that HR has a real role to play in strengthening the behaviours and value alignment of organisations.
That is the first point that we make. When it comes to whistleblowing, I agree that we need to provide a channel. We as a professional body can absolutely provide a channel for confidential support to our members who are caught in a paradox of that kind, where they have been aware of evidence of their organisation not behaving in accordance with its values and have found no recourse within the organisation. They can then come to us. We already have legal helplines and things of that nature, but we are looking at instituting something exactly along the lines that you describe.
Q3039 Chair: It struck me that the idea that somebody who is worried about behaviour in the company should go to the HR department is not particularly promising if the HR department is the problem. As I indicated at the very beginning, we got into this because we thought health and safety was being imperilled by the fact that people were not willing to come forward as reps because they saw that if they put their head above the parapet they would have it chopped off. I would have thought, therefore, that people within the system are not likely to complain internally and would want to go outside to shop their employer to somebody like you. I am still not entirely clear about the extent to which you see that as one of your core functions.
I recognise that there is a difficulty for you because you are not a regulation body and do not have the same opportunity as, say, the Law Society or some of the finance or accountancy groups to step in and say, "This is outwith professional standards," but maybe you could give us more of a feel of it. Part of my difficulty in dealing with you on this is that I am not sure whether you have been culpable in the sense of being negligent-asleep at the wheel-or, on the other hand, whether you have been deliberately turning a blind eye and condoning it. We are not quite sure what side you will be on when we come to try and clear all of this up.
Peter Cheese: Are you talking about the CIPD specifically rather than the profession at large?
Q3040 Chair: The profession at large is part of the problem-you are perhaps part of the solution. What I am not clear about is the extent to which you will tread on people’s toes and, if necessary, accept lower membership in order to have a higher quality of behaviour. What could you say that would give me any assurances that you are among the good guys in all of this? Are you a white heart or a black heart?
Peter Cheese: The first thing I would say is that I think we have always been very public about our condemnation of this sort of practice. As I said, we have taken a number of very specific actions to address it. I do not think that any of our members can be in any doubt whatsoever that we do not in any way support blacklisting of any description and that what we are seeking to do is to promote better behaviour, better practice and better standards.
To respond to your earlier thought, I do believe that we should see ourselves as a professional body as part of the solution-in the sense of being a whistleblowing channel, if that is needed, so that HR professionals can come to us and say, "My organisation is not listening, and I want you to intervene." We could then go to the top of the organisation, as you said, or do whatever we need to do. Alongside that is reinforcing of the right qualifications and skills, and adherence to our codes of practice and codes of conduct.
In all of those elements, I think that we have demonstrated that we are not part of the problem but want to be part of the solution. We are absolutely looking ahead as well. At some point, it would be interesting to discuss where this leads us to on pre-employment vetting, particularly in the light of things such as the internet and social media, as I said. However, I believe that we are part of the solution and when we have been made aware of this we have been very quick to respond and explicit in that response.
Q3041 Chair: Could I follow up one other point from what Alan said regarding how you determine whether you will take action? Can I assume that some sort of investigation will take place into the culpability of everybody who is an HR professional who is named in any of the court and tribunal courts?
Peter Cheese: That is the process we have been going through. Where the evidence has come to light, we have checked those names against our membership. To go back to our powers, if they are not a member, there is not much that we can do. Whether we would want to or not is another question, but we cannot-we do not have that authority.
Q3042 Chair: So all of the named contacts of the Consulting Association, in so far as you are aware of them-I am not clear off the top of my head to what extent that is in the public domain-
Peter Cheese: I believe there are 70 names in the public domain.
Q3043 Chair: Right. Do I take it that investigations-not necessarily action-will have begun or will be beginning against all of those who are your members?
Peter Cheese: We have taken that list and have checked it against the membership database. Where they are current members, we have instigated an investigation.
Q3044 Chair: Just to clarify again this question of what percentage you cover and whom you do not, I think it would be helpful if you would let us have a note of the list of names that you looked at, identifying those who are your members and those who are not.
Peter Cheese: With respect, I do not want to name the names, because part of the process is to keep its confidentiality, and I do not want to compromise our own process. They are all names in the public domain. You have the same list of names. As I said, the process we have gone through is to take that list of names and to say, "Who are current and active members?"
Chair: That is a fair point.
Q3045 Mr Reid: Is your membership list public or confidential?
Peter Cheese: It is published.
Q3046 Mr Reid: If the individuals involved in blacklisting are in the public domain and your membership list is in the public domain, presumably listing both lists would not be a breach of confidentiality.
Peter Cheese: Yes, I suppose so. If the information is in the public domain, there is not much that we can do. As I said, I think it is important to our process that I am not seen to be naming names, because that is not how our processes work.
Q3047 Chair: Can I be clear? Is your membership list published?
Peter Cheese: Yes.
Q3048 Chair: I am sorry-you are saying yes and your minders are shaking their heads.
Peter Cheese: Could I rewind? I am sorry-I misheard my colleague. I thought that was true.
Q3049 Chair: Any good chief executive should have eyes in the back of his head.
Peter Cheese: You are damn right; he was probably flapping his arms at me. No, we do not publish our membership as a matter of course. I am sorry about that.
Q3050 Chair: Is it publicly accessible then?
Peter Cheese: I believe you can request from us whether or not a person is a member. So we can tell you if you request it.
Q3051 Chair: You have to inquire about a particular individual; there is not a document giving lists of names that is anywhere available.
Peter Cheese: That is correct. I did not think I had seen one myself; I was trying to remember whether I had.
Q3052 Mr Reid: If we can apply to you and ask, "Is Mr Smith a member?", what criteria do you have for deciding whether or not to answer that question?
Peter Cheese: I think that if we are asked a direct question, we will give you a direct answer.
Q3053 Mr Reid: So if I ask, "Is Mr Smith a member?", you will tell me yes or no.
Peter Cheese: Yes, I do not see why we would not.
Q3054 Chair: So if we send you a list of the main contacts and say, "How many of these people are your members?", you will respond to us and say how many are and how many are not.
Peter Cheese: Through that process, I would be telling you who was under investigation.
Q3055 Chair: That is right, but you have just said to my colleague that, if we ask you about particular individuals, you will tell us whether or not they are members.
Peter Cheese: Yes, but I would then ask the Committee to respect the confidentiality of our investigation processes. I suppose the question would be, to what purpose?
Q3056 Chair: These two objectives are mutually incompatible then.
Peter Cheese: They may be. With due deference, I suppose the question to the Committee is, what would you want to establish?
Chair: I understand that. I was just following up Alan’s point about accessibility.
Q3057 Lindsay Roy: Am I right that there are 19 investigations currently ongoing?
Peter Cheese: Yes. We have a single process investigating 19 people.
Q3058 Lindsay Roy: Can you tell us how many of these relate to blacklisting?
Peter Cheese: They are all part of the public domain evidence around blacklisting.
Q3059 Lindsay Roy: All 19 of them?
Peter Cheese: All 19.
Q3060 Lindsay Roy: That is very helpful. Can you also tell us about the professional training that has been done in relation to references, due diligence and vetting, and what is different from what happened before?
Peter Cheese: Maybe it is worth exploring the difference between vetting and blacklisting. Vetting is a legitimate process, if you want. It is a perfectly proper process to try to ascertain whether somebody that I am recruiting is who they say they are. It could be CRB checks, rights of employment checks, visa checks and things of that nature. In the most obvious instance, it is the ability for me as an HR professional to ensure that the person who is applying for a job is who they say they are and that they are not in the middle of a legislative process or whatever else.
However, the debate does extend beyond that. Those are perfectly legitimate things for me to find out about somebody, but, if I looked at the information that is available on the internet now and started to search that, I might find out other things. We are trying to provide updated and clear guidance on what we regard as acceptable practice in pre-employment vetting and, of course, extending that into what is good practice around recruitment itself-what sort of things you should be looking for and how you do it-and ways that are not acceptable.
Q3061 Lindsay Roy: So vetting is really what is legitimate to investigate or to inquire about.
Peter Cheese: Yes. Look at it this way. Clearly, part of the role of HR professionals and recruitment officers is to ensure that they are recruiting the right people with the right skills and the right aptitude for the job. Vetting of whether somebody who says that they have certain qualifications is who they say who they are, and CRB checks and background checks of that nature, are all perfectly normal and acceptable pre-vetting procedures.
Q3062 Lindsay Roy: One of the right attitudes might be a premium of concern about health and safety.
Peter Cheese: Yes. The attitude part, of course, is a harder thing to explore. Attitude could relate to ideas such as that or could go back to the values point. If I am clear as an organisation about what my values are, what I expect in terms of behaviour and what my corporate culture is, if you will, we certainly believe that it is really important to try to recruit people who are aligned to the same sense of values.
Q3063 Lindsay Roy: So what are the guidelines in terms of attitudes to work?
Peter Cheese: The guidelines are really about how you assess things of that nature. If you start with that discussion about what are your core values as an organisation, it should give you a definition of your behavioural norms-that is what values should be about. It is interesting to note that many of the big banks had integrity as one of their core values. Okay, so now let us define that. Integrity is a very big word-it can mean all sorts of things-but it is interesting to note that one of the first statements for a number of the big banks is integrity. We need to define what we mean by integrity and then to apply that, to the extent that we can, in assessing the attitude of the individual-the recruit-to those sorts of values. It is done through the interview process or psychometric testing; there are various tools that HR professionals and recruitment officers use to try to assess that kind of attitude and fit.
Q3064 Chair: Are there circumstances in which a commitment to trade unionism is a legitimate barrier to employment?
Peter Cheese: No.
Q3065 Chair: So there should never really be any circumstances in which a record of trade union activism is used to rule somebody out.
Peter Cheese: I guess you would have to help me understand what you mean by trade union activism. Do you mean being a member of a trade union?
Q3066 Chair: No, not simply passively being a member but having been a shop steward, being committed to taking forward things such as health and safety, being prepared to have a row about things such as health and safety, and being what could be described as a militant with a small "m". There are issues here, aren’t there, about somebody’s commitment to the collective group of workers versus selling their soul entirely to the employer? I think it is a question of how those are actually applied in practice. I do not know whether you have seen our previous report on blacklisting, but we had down quotes that had been used about various people in the Consulting Association files that seemed to me to be entirely irrelevant-
Peter Cheese: Spurious.
Q3067 Chair: That is right. They were entirely irrelevant to the question of whether or not they should be employed and, essentially, were just smears. Again, I am not clear about the extent to which what you are discussing about values and commitments could not provide a much more sophisticated method of blacklisting, in terms of people’s commitment to the company, values and so on. You do not blacklist somebody for being, say, a former trade union activist or shop steward; you get them for the same sort of things, but by another route, as it were-by testing about commitments, values and to what extent they are prepared to go the extra mile in a particular direction. These are obviously questions that to some extent take us beyond what we are discussing today, but I think they are quite legitimate concerns for us-
Peter Cheese: They are important questions.
Q3068 Chair: -because we might end up with you in front of us in two or three years’ time, finding out that you have been up to all sorts of bad things we would not have approved of.
Peter Cheese: I think those are very fair questions. First, there is, of course, a legal definition of blacklisting, which relates specifically to union membership. I am sorry, there are two things: blacklisting, and then union membership-the Employment Relations Act. You cannot discriminate against somebody on the basis of their union membership-that is legal. I think that what you are doing is extending that thought. I do not think that being what you describe as a union activist should be incompatible with being in line with the values, aims and objectives of the organisation. I would hope that that is generally the case.
As you say, we start to stray into this greyer area. Your point about my appearing in front of you in a couple of years’ time relates to the issue that, as I said, in today’s world, with the internet and all the sorts of things you can go out and search for about people, who knows what information people are using to make what decisions? If it was hard for us in the past to draw out these sorts of practices and show clear evidence, it is going to get a lot harder in the future. The Data Protection Act and the existing legislation are not clear enough on this stuff. There is not clarity of understanding from employment lawyers through to HR professionals.
That is something we need actively to work on, but it gets extremely difficult. You will be aware of the young lady who was put forward as a police commissioner. Then somebody found out that when she was aged 14 she had some rather indiscreet and stupid tweet, as you might do when you are 14, but that was sufficient to have her thrown off. Where was the right and wrong in that?
Q3069 Chair: I can honestly say that I made no irresponsible tweets when I was 14, because that practice had not yet been invented, which was perhaps a safeguard.
Peter Cheese: You and I both-I think we were fortunate that we were not in that world, but that is the modern world. We are now looking back at many of these things-whether it is bankers’ behaviour, stuff that went on in the BBC or whatever else- and saying, "That was clearly wrong. How could that ever have happened?" We are looking at it through a different lens.
The second thing is that I think we are trying to have, do have and should have a more open society and culture. Part of that is being driven by the internet and all this ability to go and search for information about people, to see what is being discussed and so on. However, that has a flip side to it, which is that that information is much more accessible to me. I do not know whether you tweet, but, if you do, I can see what you tweeted. Equally-I will talk about myself, because I do tweet-I do not know what information is really out there about me. I know what I put on LinkedIn, what I put on Facebook and what I tweet, but people can take that information and repost it, and I do not know all of that.
In the last couple of years or so, there has been a growth of agencies who will help you, if you ever need this, to clear up your own electronic profile, because people are beginning to understand not only that things that they might have said indiscreetly in the past can catch up with them in ways we could not even have dreamed of years ago but that there is other information out there. It might be a picture of me tagged with a group of mates by my daughter when we were having a beer at a party that ends up on some site, so that everybody makes some assumption about the kind of person I am. This is tough stuff.
Q3070 Chair: Can I clarify two of the ways forward on this? One is a greater degree of transparency about the criteria being used to make these sorts of assessments. The second is the opportunity for some sort of post-decision audit, as it were. If you found that a firm had gone through an exercise that had resulted in a whole group of people not being employed, who could be deemed to have been blacklisted, there would then be some opportunity for either a trade union or somebody else to come back and say, "Look, this pattern of decision making has resulted in things that we believe that, de facto, are almost like blacklisting, even though you have not specified that in the rules that you have applied."
I am thinking of this particularly in the context of some other points we were going to make to you about Crossrail and the dispute that it has at the moment with Unite about the agreement that they reached and how we might move forward on that, because it seems to me that the question of audit and firms being willing to accept that they will be audited in some way after the decisions have been made gives us some sort of safeguard. Is that something you are looking at at the moment?
Peter Cheese: Maybe you could expand your thought, Chairman. When you say audit, do you mean a legal audit?
Q3071 Chair: I am sorry-I am using the term loosely. As you come from Accenture, audit may mean a particular technical thing to you, so let us say a review-some sort of opportunity for a wider view to be taken on an aggregation of a series of individual decisions, to determine whether there is a pattern of discrimination or something else that was either intended, but intended to be hidden, or was not intended, in order that things can be corrected. We are a bit worried that, if we drive out blacklisting in crude forms, it may very well return in much more sophisticated forms. We do not want to be constantly on this treadmill. It seems, therefore, that the issues of transparency and review potentially give us a pair of safeguards to stop this happening in future. I wonder whether these are observations that you share, whether your thinking has not got to that stage or whether you have been following another route.
Peter Cheese: We have not particularly followed that direct thought. What you are describing is whether you could see a pattern of, let us say, recruit rejection through a particular company and aggregate some information or evidence that would suggest that something was going on. I will take the thought away; to be honest, I had not thought about it.
I think it is extraordinarily difficult, if you think about how many applicants apply to many organisations. You see it in the press. Recently, one of the big supermarket chains had 50 placements and 10,000 applicants for those. You are in this very difficult situation as a recruiter-how do I sort through that lot? I could easily say, "I just dismissed all of those because they could not spell properly"-which, incidentally, is sometimes what people will do. Arguably, you could find some patterns of that nature. I am not saying "Don’t try it," as it is an interesting thought, but to be honest-I am just reacting to the thought at the moment-I think it would be very difficult.
Q3072 Chair: It comes back to the point I made earlier that, in our view, we have to make an assessment of whether you are part of the problem or part of the solution. This is taking us into waters we are not capable of swimming in or cannot reach the bottom of-I am mixing my metaphors. We do not have the degree of professional expertise to clarify how to take it forward, but we do not want to be in the position of having to return to this in years to come to get it sorted out.
Peter Cheese: I share that perspective.
Q3073 Chair: We want to see some sort of patterns developing and some sort of view that allows us to say, "This matter has been put to bed."
Peter Cheese: As a final thought, what we could say as part of good guidance is that employers should be aware, first and foremost, of some sort of internal process where they say, "All right, we have a lot of recruits. How are we selecting?"-I have given the example of 10,000 versus 50 places-and "Over time, can we see some patterns?"
This is a broader issue. I do not know whether you are familiar with the expression "big data", but everyone is very obsessed-and rightly-with the idea of whether we could provide far more analytical insight into what the hell is going on in organisations in all sorts of ways: how well people are being developed, and things of that nature; how well people are being looked after; and what are the indicators of why people leave, do not join or whatever. It is all in that space of analytics and big data. What you are describing is that we are getting closer to the point, in terms of the capabilities of technology, of being able to sort through some of these sorts of patterns.
That is one point-technically, could you do anything? I suppose we are beginning to get to that point. We as a professional body are very actively promoting the idea of analytics-of better metrics and measurement. If I may extrapolate your point, if any of us said, "I want to see the headcount of this organisation, how many people it recruits and how many open positions it has," do you think you could find that information? You could do it only by intense digging. There is no requirement, or expectation even, on organisations today to report on anything to do with their people, their culture, their engagement, their leadership development, their skills or their recruitment-any of those things-versus what we have in the accounting world, which is great precision on exactly how much money I made, how I made it, what tax I paid and all the rest of it.
This is something that I have long believed we should have. You may remember the Accounting for People initiative that was kicked off 10 years ago by, I think, Denise Kingsmill and driven by the DTI at that time to do precisely that. Let us try to come up with some more measures so that stakeholders of all kinds can have better sight of how organisations are managing and developing their people, because that is a good thing to do. I would say that some of the stuff they came up with at the time was not bad, but it fell on fallow ground. Today, I think we are in a different environment, for lots of reasons, whether it is failures of corporate culture or skills mismatches. We have huge problems recruiting, with all these open positions we still cannot fill, even though we have thousands of people applying and high unemployment. You have a whole range of issues that have put into a much stronger position the need for better data and insight on practices around how organisations build and develop their work forces.
In that context, we could begin to look more into the sort of space that you are describing. Can we begin to see or, first and foremost, encourage organisations themselves to say, "All right, let’s start to manage the patterns"? Maybe through good governance, first and foremost, through the boards and others, we can say, "Ask the damn questions." This is one of the things that everyone has now acknowledged in the banking world. Part of the problem was not so much a failure of regulation but the fact that the stakeholders, the boards and the other executives in power were not asking those questions, and they should have been. If they start to ask those questions, we-particularly we as the HR profession-should do a better job of providing the information that will answer them. So I think you are headed in a direction that I would support.
Q3074 Pamela Nash: On the CIPD’s website, there was a story about Unite’s allegations to us on the Crossrail project. Is this something you are familiar with? There have been some developments in this story today.
Peter Cheese: I am familiar with the developments today.
Q3075 Pamela Nash: Does CIPD have any reaction to the original allegations? Was any work undertaken in response to them?
Peter Cheese: Are you talking about what we were doing before today?
Pamela Nash: Yes, before today.
Peter Cheese: To be honest, no. In situations like this, we have to wait for the due process to complete. We are not a statutory body or a regulatory body-we have to wait for the due process to complete. With Crossrail, we were, of course, aware of the process and the allegations, but we had to say, "Let’s let due process complete. We can then react to it appropriately."
Q3076 Pamela Nash: Were you not approached at all during those investigations?
Peter Cheese: No, we were not.
Q3077 Pamela Nash: And you did not conduct any other investigations within the CIPD.
Peter Cheese: No.
Q3078 Pamela Nash: To go back to some of your earlier answers, we have been speaking about individuals who are now under investigation for being involved with the Consulting Association. Does your organisation have a view on people who have been involved in blacklisting still being in the profession now? Are these investigations uniform or is each different?
Peter Cheese: I suppose that ultimately that is what we are trying to do through the investigations. Again, we have to have the evidence to proceed. We are now proceeding based on the evidence that has come to light. We have to see where those investigations lead us but, as we have said, we condemn it. If these people are found to have been complicit in this and the evidence is clear, we will take them through the disciplinary process and eject them. Because we are not a licence to practise, I cannot say that they could never work in the HR profession again but-thinking back to the early part of the conversation-we would certainly encourage that fact, because it cannot be right that somebody has done these things.
Q3079 Pamela Nash: I am sorry, but it was not clear to me from earlier evidence exactly what the disciplinary procedure is. Is it automatic dismissal from the organisation or is there a stage before that?
Peter Cheese: As I said, there is a range of sanctions, ranging from a written reprimand through direct guidance on further training-that is to say, you have done something wrong, so you had better train yourself up so that you understand what you should be doing right-to suspension of membership and then, ultimately, ejection from membership.
Q3080 Pamela Nash: Finally, I note from your written evidence that you supported our call for a redacted list to be published.
Peter Cheese: Yes-from the ICO.
Q3081 Pamela Nash: Yes-the one that came from TCA. I also note that you have used the evidence that we have put on the public record in order to support your own investigations.
Peter Cheese: Correct.
Q3082 Pamela Nash: Where else have you been getting information from?
Peter Cheese: I think the Committee has done a good job of uncovering most of the sources of evidence. There have been other sources we have been aware of-blogs and other things-which are sometimes hard to substantiate. Part of the process of investigation is to understand how good that evidence is. I would commend the Committee. I think you have done a very good job of drawing together the real evidence that is out there.
Q3083 Pamela Nash: We touched on this earlier, but, just to be clear, are any members of the public, your members or anyone, for that matter, reporting people to you who they think may have been involved in blacklisting?
Peter Cheese: Are you asking whether people have made complaints against members outside this process?
Pamela Nash: Exactly.
Peter Cheese: No, they have not. We even had the Blacklist Support Group contact us at one point. We had conversations with Dave Smith and asked, "Do you want to raise a formal complaint?" He considered it and then did not. We also asked him whether he wanted to be a witness. We have been public in our condemnation and have said that people should come forward if they can see evidence of this, but the evidence has come principally via this Committee.
Q3084 Pamela Nash: Where have you said that? Has there been a call for evidence and information from, for instance, your members who are working in the construction industry or may have worked in it in the past?
Peter Cheese: No, we have not gone out and made a direct call of that nature.
Q3085 Pamela Nash: Is that something that you would consider?
Peter Cheese: Again, I think we would have to see where the evidence in the current processes leads us. If it seems to point to wider issues and problems, that may be something we would want to consider, but we do not have any ability to require people to provide any information or evidence. We do not have those powers.
Q3086 Pamela Nash: I understand that, but with the number of members that you have, I expect that there will still be members who may not know that this investigation by either the Scottish Affairs Committee or by your own organisation is happening.
Peter Cheese: Fair enough. As I said before, I absolutely believe that all members know that blacklisting is illegal and what that means, but I am sure you are right about the detail of this process. I could not possibly believe-
Q3087 Pamela Nash: Can I therefore ask you to consider writing to your members working in the construction industry about blacklisting?
Peter Cheese: That could be something. As I said, we have 2.5% of our membership in construction. As these processes unfold, if it seems apparent that there is more to it than what you have already uncovered-or you uncover further evidence-we will certainly take that on board as well. However, I would be hesitant to promote processes before the conclusion of the current processes. We should see where those lead us.
Q3088 Chair: Can I clarify your relationship with the Blacklist Support Group, as I am not sure that I heard you correctly? My understanding-or the version I have had-is that you set up your investigation only after the Blacklist Support Group had contacted you and asked you to do so, and that you as an organisation were not proactive in establishing an investigation. Have I got that wrong?
Peter Cheese: Let me just confirm the timeline. [Interruption.] I think it contacted us at the same time that our new code of practice came into effect. As I have said before, prior to our new code coming into effect, we did not have the ability to conduct an investigation of members. So it was coincident, in that sense. I am just checking my notes, but it was at pretty much the same time.
Q3089 Chair: The Blacklist Support Group is saying that you agreed to do the inquiry only after it had been in touch with you and that, notwithstanding the fact that your new structures were coming in, you had not announced as early as you could have that you would do this as soon as they were in place. That makes it look as if you did it only because you were pushed and that, had you not been pushed, you might not have done it.
Peter Cheese: I do not believe that is the case at all.
Q3090 Chair: Well, I hardly expect you to say, "Yes, that is the case." It comes back to the question of whether you are part of the solution or part of the problem. The feeling that has been expressed strongly to us is that you are doing this only because you found that you could not get away with not doing it.
Peter Cheese: I would strongly refute that. I do not believe that is the case at all. As I said, we had those conversations with Dave Smith. We asked him whether he wanted to raise a complaint, and he did not. We were absolutely going to carry out those investigations. It was coincident in terms of the timing, so it could be interpreted in the ways in which, perhaps, he is trying to interpret it, but I would say unequivocally that we were going to carry out those investigations, because they clearly contravened our code of professional conduct. That is why we had them.
Q3091 Chair: The second point is that some of the people you are investigating for having been involved in blacklisting in the construction industry have either subsequently or beforehand worked in other areas, particularly in the oil industry, where there have been rumours and suggestions of blacklisting for a long time, especially the NRB-not required back-system. While you are investigating blacklisting in construction, will you also be pursuing with those individuals the question of whether they have been involved in blacklisting elsewhere?
Peter Cheese: Again, if we can be shown evidence that they have, we will investigate. As I said, our ability to dig out and get evidence is very limited. If the evidence shows that they were involved in it prior to that, in the oil industry or wherever else, we will absolutely investigate that, but our guidance-
Q3092 Chair: I understand that, but I think you have to recognise that, from our point of view, if the ICO had not taken action following a particular tribunal and after somebody made complaints because they thought that they themselves, having previously operated the blacklist, might find themselves on it, none of this would have come to light. However, there must have been many more of your members who knew about this practice than, say, Members of Parliament or trade unionists, and had some evidence about it.
I am a bit worried about the view that we will act only if firm evidence is brought in front of us, because that sounds almost as if you will not be proactive in any way. The difficulty is that if you are simply waiting for other people to produce evidence, many of those who have allegations to make do not necessarily have the evidence to firm them up. However, with the allegations you might very well be able to clarify where best to pursue evidence. Again, there is an issue here about how involved you are willing to be-whether you want to see this issue go away as quickly as possible, or whether you see it as an opportunity to reform some labour relations issues throughout construction and other industries.
Peter Cheese: I hope I have been clear that what we want to do is to ensure that this does not happen going forward, so that we address this in the wider sense of what is good practice in pre-employment vetting, with updated guidelines and all those other things. I want to restate that we are very clear on that; I am very clear that that is what we need to do.
As regards other investigations that we can do, I understand your perspective, but at the end of the day we just do not have the power to go and extract information. If people are hiding behind things that they did 20 years ago and that people were simply unaware of, we do not have any power to extract much from them. That limits our ability to do that kind of investigation. I think that, first and foremost, our focus has been on what we do going forward. As I said, we are entering new territory with things such as the internet and, therefore, what should be good practice and what is bad practice in pre-employment vetting.
We will certainly investigate historical activity where the evidence is clear that that is what happened, but we are limited by our ability to do an investigation of the kind you are asking for. There are legal processes and authorities that can do that. We are certainly making it clear that any of that kind of practice is to be condemned. If further evidence arises that other activities happened in other industries, we will certainly pursue that.
Q3093 Chair: One of the issues that have been raised with me, certainly, to argue that you are not entirely enthusiastic about pursuing this vigorously is the fact that Susannah Clements, your new deputy chief executive, has come straight from Carillion, which has form on this. I think she was the group HR director.
Peter Cheese: She was group HR director at Carillion.
Q3094 Chair: Carillion having form on blacklisting is not the best of recommendations. Previously, she worked for Whitbread, which was prominent in the Economic League. I am always conscious that there is a danger of guilt by association, but none the less I think you can see why that raises serious doubts about whether the organisation is making appointments that ignore previous involvement in blacklisting.
Peter Cheese: I can say unequivocally that Susannah Clements had no activity and involvement in blacklisting. She was group HR director at Carillion for a year and half to this point, way beyond any activity that might have been going on at Carillion; likewise at Whitbread. She has worked with a wide range of organisations, including Care UK, Pricewaterhouse and so on. Of course, as part of our normal due diligence, we check people’s backgrounds to see whether there is any evidence that is suggestive of wrongdoing, bad practice or whatever. I can say unequivocally that there is no evidence to suggest that any of that is true for Susannah Clements. I believe that she is a very accomplished, very credible and very capable HR director who will do a very good job for us.
Q3095 Chair: There is a final point that I want to raise before asking you whether there are any points that you want to add. As you will probably be aware, we have gone out to consultation on some other issues. Is blacklisting still going on? Is the law adequate? I wanted to ask you for your observations, and whether you would consider giving us some formal evidence, on two of them. Should there be compensation for those who were adversely affected by blacklisting; if so, how should this be calculated? Then, should there be some form of penalty or punishment for those who were involved in blacklisting-running the practices and so on-and who undoubtedly profited from it; if so, how should that be calculated? This is one of the areas where we find ourselves lacking professional expertise. We are therefore looking to people like you to give us some advice in order that we can put forward recommendations.
Peter Cheese: I understand the questions entirely. The compensation question is really a matter for the tribunals and for the individual companies concerned. Again, we are waiting to see what happens. As you probably know, it was only in 2010 that the ICO itself increased the financial penalty significantly, to up to £500,000. So we are still in this time phase where we are waiting to see just how far the law really extends and what teeth it has, both through legal process and through tribunal. I do not think we are in a position to prejudge what that might mean. It may well mean that we end up with an outcome where whatever we might regard as an appropriate remuneration is apparent, but I think we are not yet in the space where all those procedures and processes are complete and, therefore, we really understand the outcomes of some of the existing practice.
Q3096 Chair: But surely we are in a position to make some sort of judgments. You mention tribunals and so on. I think you will be aware that a whole string of applications to tribunals have been struck out either because they have been out of time, because people were advised late, or because the company that was essentially operating the blacklist was not the direct employer, because there were subcontractors and so on. Unless you are saying to me that the tribunal cases will set a tariff, as it were, that should then be applied in some way to other cases that would not qualify under existing legislation for the tribunal mechanism, I am not quite sure how those tribunal structures or decisions will actually help us. If you are saying that you get the tariff and then apply it universally, there is then the issue of how you get the money and from whom.
Peter Cheese: Yes, I agree. I think all those questions are appropriate. As is the case with most of these things, you are looking for some sort of precedent to be set and for an understanding of what that tariff, to use your word, might be. I am not qualified and not in a position to prejudge what that outcome will be, and I do not think I should. The employment tribunal process is a step below the legal process. We need to see what comes through these employment tribunals-what sort of tariff and precedent is set. That is equally true of the legal cases that are proceeding. We need to see what the power of the ICO really is-and what the power of the Data Protection Act is. I think there has been a lot of confusion historically about what the Data Protection Act really means. We certainly welcome more teeth for the ICO in these sorts of processes.
Q3097 Chair: I would not want to be distracted into the question of dealing with this under data protection. I think the question of people having been penalised and refused employment for years and years goes far beyond the question of the data being misused. It seemed to me that, because this was a personnel-type issue, it might be the sort of area where you had some sort of expertise. I can understand why you might not want to say anything on these issues, but again this comes back to the question of whether you are part of the solution or part of the problem. We may ask you to consider that and whether you want to give us evidence on it-or even on what the possibilities are. You would be astonished how much we do not know about this area, not having had direct professional involvement in it. We would, therefore, value comments and observations from organisations such as yours.
Peter Cheese: I would say that, within our remit, we would be happy to provide some of that guidance. It is not for us to judge what the tariffs and the penalties should be. We are talking to the ICO. As I said, I think we see that, quite probably, one of the outcomes should be more teeth for the ICO to investigate these sorts of things. I understand the distinction you are making between data protection and formal blacklisting, but they are two sides of the same coin in many respects. I think that going forward, in particular, we will have to see stronger guidance on data protection, for the reasons that I gave-access to information through the internet and so on.
The Employment Relations Act, the Data Protection Act, TULRCA and so forth operating in concert is part of what we are all trying to understand. Those are the legal processes, combined with what is happening through the tribunals. I do not think you are alone, to be honest, with regard to the confusion about what is really happening, what is the law, what is the applicable state of the law, how much people understand it and what is the outcome of some of these tribunal processes. I think we are learning and that the landscape is changing, partly because the law is not up to date-or not keeping up to date-with all the developments of the internet.
I would say that we are happy to continue to collaborate with you and support what you are trying to accomplish and some of the outcomes that you are trying to achieve, but hopefully you will understand where our remit can take us and where it is very difficult for us to go further.
Q3098 Chair: We will await with interest receipt of your evidence and see how helpful it is. The final point we always make is, are there any answers you had prepared to questions that we have not asked? Are there any points that you feel we should have covered but we have not?
Peter Cheese: I know that there was a bit of discussion-and I was not entirely clear in all my answers-about how many people have issued complaints and what those have been about. It is interesting, but we have received no external complaints about blacklisting. One could argue that it is a curious fact, but that is the case.
Q3099 Chair: I do not think it is curious. My understanding is that people have little confidence in your ability or willingness to do anything about it, which is why they do not bother. That might be unfair, but it is-
Peter Cheese: I hope that is not the reaction, and I understand that it could be a perception. As we have already explored, the limits of our powers are not huge, in all reality. We have a membership organisation and can expel people from membership; we are not a licence to practise. As I said in response to some of the earlier questions, I believe very strongly that our remit and what we need to do is to help to improve professional standards much more broadly across HR. I do not think there is consistency, so that is what we need to do. In doing that, having more people who are members and are signed up to our codes of practice, where we can enact something, would be a very good thing.
At one level, I absolutely want to repeat that I believe we are part of, and I want us to be part of, the solution. We were very troubled and concerned by blacklisting and condemn it outright. You have raised the point; we were as concerned as you are to find out about it when we did. When I look at it, look back at the organisation and look back at some of my own professional career in this, was I ever aware of this stuff going on? No, I was not. Should I have been aware? I do not know. These were hidden, covert practices. As we have already explored, finding evidence that can call people to account for this stuff has proved difficult. That is the fact on the complaints that we have had. As I said, even when the Blacklist Support Group was invited to submit a formal complaint, it did not, but we carried on our own investigation anyway.
Q3100 Lindsay Roy: What are the most important things you have taken away from this evidence session?
Peter Cheese: First of all-and I did not doubt this for a minute-that the Committee is extremely serious about, and committed to, these issues. I am reassured by that, because I take them very seriously as well. I understand the questions and, to some degree, the sense of concern about how much we can do and whether we could not do more. If we were a licence to practise-maybe that is where the future of the profession should be, and it should be more like the finance profession-I would have more teeth to act. In circumstances like this, I would personally welcome that.
I think it has been a good, broad conversation about some of the issues related to this but that at this stage all of us are waiting for a series of processes-tribunals and other actions that are being taken-to see where they land us. Where does the ICO really stand on this? How powerful are these laws-employment regulations, Employment Relations Acts and so forth-at holding people properly to account and imposing the proper penalties? As I said, I can only speculate on that. I am not a qualified lawyer, so I think it is a shared concern. Where does this ultimately lead us?
Another thing that I would observe is that we are working to try to give better guidance-more updated guidance is probably a better way to describe it-on what pre-employment vetting should look like in a modern world. We are involved in a wide consultation on that, across all industry sectors, and are working specifically with a number of the construction industry sector bodies, recognising some of the history that we have been exploring. I want me personally and the CIPD to be active in promoting what these practices should be and to clarify and reinforce our professional codes of conduct in that regard, to ensure that the message is spread far and wide that blacklisting in all its shapes and forms is to be condemned. However, if you take a broader definition of blacklisting as a space where my name is on some list I do not know about, where information is being held about me that I do not know about, and where that information is being used in some way to compromise my ability to get a job, we are entering a whole new world. I cannot tell you what information is held about me on the internet or where it is. That is troubling. We are working with the Information Commissioner’s Office on these sorts of things.
Further actions we are taking with the Information Commissioner’s Office regarding the 19 people are that we have requested the information that it has on the Consulting Association lists. We are able to go to its offices-we cannot take the information away-and look at the information it has about those 19 people. That is what it told us it could do. I would, therefore, support what you have already said about what else the ICO could do. Perhaps it could be more open about publishing what was on the list-redacted versions or whatever-so that people are more aware of the kind of information that was being held. If that information comes to light more broadly, maybe it will flush out other examples. I do not know, but I think that will be part of the purpose of trying to bring that information more into the public domain. So we would support that as well.
Lindsay Roy: That is very helpful.
Q3101 Chair: Do you or your minders have any final points?
Peter Cheese: No. I think we had a to-do-to come back to you to clarify some points about our own procedures.
Chair: You will get the minutes and so on. I assume that when you say you will do something, you will do it, so I was not going to run over that just now. Thank you very much for coming along.