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OUTSOURCING giants Capita and FDM are facing legal action from former employees who claim that they were kept in “tied servitude” by allegedly unlawful graduate training schemes.
The companies both run schemes requiring recruits to undergo up to four months of unpaid training before being given employment with other companies, for which they must work for two years or pay as much as £20,000 in training fees.
Capita is responsible for massive government contracts, including electronic tagging of prisoners, running London’s congestion charge scheme and collecting BBC licence fees, while FDM provides consultants to the Home Office.
Both now face being dragged to the High Court by four former trainees who argue that the five-figure release fees represent an “unlawful restraint of trade.”
One man who signed up to Capita’s Novus graduate programme was hit with a £15,000 bill when he wanted to be with the mother of his unborn child. He was told that he could not move as the company had no clients in that area.
A former FDM trainee was given just 14 days to pay £18,000, minus a month’s withheld wages, and threatened with legal action after trying to leave a few months into his training.
Jolyon Maugham QC, founder of the Good Law Project, which is supporting the claimants, told the Star that many of the training courses were “poor, sometimes valueless.”
He said the law allows an employer to “protect its legitimate expectations,” but added that he believed that what was in effect a “release fee” was unlawful.
Mr Maugham said that unless Capita and FDM took action, the claim would definitely go ahead, adding that he expected to issue legal proceedings against a third company too.
He said: “I’m not going to give it up because I know in my bones that this practice is unlawful and it’s profoundly wrong.
“If I was Capita or FDM and I was confronted with a scheme that I knew was unlawful, I would be desperate to find a way out to avoid the public shaming.”
Tanya de Grunwald, founder of careers blog Graduate Fog, which first revealed Capita’s scheme, said: “This grotesque practice needs to die, now.
“It is the most disturbing development I have seen in the graduate market in the eight years I’ve been campaigning for fair jobs for young people.
“Graduates are being terrorised into staying put, or hounded for money they’re told they owe if they leave.
“This is no way for any reputable employer to behave.”
Capita declined to comment, while FDM did not respond to requests for comment.
A crowdfunding campaign has been launched to raise £50,000 to cover legal costs in the event of the claimants losing. To donate, go to crowdjustice.com/case/indentured-labour-is-happening.
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