Business pays out to whistleblower who raised concerns over public sector project

A construction company has been ordered to pay £137,000 in compensation to a whistleblower who raised concerns over its profit margins on a public sector construction project.

The claimant, Nigel McArthur, was a regional pre-construction manager at Balfour Beatty.

The company had tendered in 2014 for an £18.5m construction project at Callaghan Square in Cardiff. The scheme was funded by the Welsh Government.

According to McArthur, Balfour Beatty had informed the Welsh Government that its profits would be 3.3% of the total cost of the job. However, he said the business had not submitted the lowest quotes received from sub-contractors and would be making an extra £768,000.

He claimed that this meant Balfour Beatty would actually make 7.34% in profits, which the construction company did not declare to the Welsh Government and its cost consultants for the project, Capita.

McArthur said he raised the issue through Balfour Beatty’s whistleblowing procedures. He resigned in February 2015, suggesting he had been bullied, and began a claim for constructive dismissal through the employment tribunal courts in Bristol.

Balfour Beatty admitted McArthur’s claim in November 2015, shortly before a hearing was due to take place. The court ordered a compensation judgment of £137,000 just before Christmas.

A spokeswoman for Balfour Beatty said: “In the employment tribunal proceedings, Balfour Beatty did not contest Mr McArthur’s claim for unfair dismissal and is paying compensation to him as assessed by the Court. We accept that we failed to properly support our employee following concerns he raised, which resulted in him feeling it was necessary to resign.

“Balfour Beatty encourages its employees to report workplace concerns they may have and we have the tools in place to support them in doing so. We regret that on this occasion we fell short of the high standards we set for ourselves in this area. We will use the lessons learnt from this experience to provide better support to our employees in the future.

Balfour Beatty did not behave illegally or fraudulently in relation to the Callaghan Square project.”

The spokeswoman added: “Once senior management were aware of the facts regarding the Callaghan Square project, we provided full disclosure to the Welsh Assembly.

“The Welsh Assembly later made a decision not to pursue the project for reasons of their own unrelated to this matter.”