Nigel McArthur FCIOB has won a payout of £137,000 from Balfour Beatty in settlement of a compensation claim for constructive dismissal after he “blew the whistle” over alleged irregularities in a bid process.
McArthur, from Exmouth in Devon, was a regional pre-construction manager at Balfour Beatty. According to his LinkedIn profile, this was after joining the company in 2005 after spells at Rok and Connaught.
Balfour Beatty tendered in 2014 for an £18.5m project at Callaghan Square in Cardiff, funded by the Welsh Government. But McArthur became aware that his employer had not submitted the true prices from subcontractors – and therefore understated its own profit margin.
According to a statement from McArthur’s legal firm, Stephens Scown, Balfour Beatty informed the Welsh Government that its profits would be 3.3% of the total cost of the job.
The statement says: “By not submitting the lowest quotes received from subcontractors… they would be making an extra £768,000. By hiding their true costs, they would in reality be able to make 7.34% in profits, which they did not declare.”
“It is not enough for companies simply to have nice-looking whistleblowing policies in place. They need to ensure that the policies are actually followed and that their employees and management at all levels of the business understand them, why they are necessary and adhere to the spirit of them.”
Terry Falcão, employment law partner, Stephens Scown
McArthur apparently established that Capita, appointed by the Welsh authorities as cost consultant for the project, had not questioned the submitted figures.
According to the statement he then “raised concerns internally through the company’s whistleblowing procedures to his line manager, his line manager’s manager, the company compliance officer and the commercial director who sits on the board – but was met by a mixture of bullying, denial and exclusion”.
McArthur then resigned in February 2015.
Balfour Beatty admitted the claim in November 2015 before the public hearing was due to start at Bristol Employment Tribunal, and the compensation judgement of £137,000 was decided by the court just before Christmas.
Responding, Balfour Beatty said: “We accept that we failed to properly support our employee following concerns he raised, which resulted in him feeling it was necessary to resign.
“We will use the lessons learnt from this experience to provide better support to our employees in the future.”
But the company said it did not “behave illegally or fraudulently” in relation to the project, and that once senior management were aware of the facts, it “provided full disclosure to the Welsh Assembly who were satisfied with our approach”.
Commenting on the case, Terry Falcão, employment law partner at Stephens Scown, said: “Nigel has shown immense integrity throughout this case and has had the courage of his convictions to stand up for the truth.
“He received no severance pay, has not been working for nearly a year now, and has had to meet considerable court and legal fees out his own pocket upfront. I am delighted that he has now received this settlement and been entirely vindicated.
“It is not enough for companies simply to have nice-looking whistleblowing policies in place. They need to ensure that the policies are actually followed and that their employees and management at all levels of the business understand them, why they are necessary and adhere to the spirit of them. Otherwise the policies are not worth the paper they are written on.”
