THE collapse of construction giant Carillion shows the failure of a “reckless obsession with the free market," a union leader has said.

Scottish Trades Union Congress general secretary Grahame Smith said the firm treated its “workers with contempt”.

A total of 1,371 Carillion workers have been made redundant since the company went into liquidation in January.

The firm was involved in major public projects such as the planned platform extension at Edinburgh Waverley and Aberdeen bypass.

Smith claimed Carillion had made hundreds of millions of pounds from taxpayer funded contracts.

However, he claimed the company eroded the rights of its workforce.

Smith said it “utilised every trick in the book to drive down costs”.

He said: "On the face of it Carillion was a successful construction company.

"It had expanded rapidly by scooping up outsourced public contracts - which it relied on for more than half its work - had 43,000 direct employees globally, 20,000 in the UK and more than 1,000 in Scotland. Its last annual return showed an operating profit of £180 million.

"But behind this façade, Carillion treated its workers with contempt.

"Bogus self-employment; umbrella contracts; a serious disregard for health and safety standards; the systematic blacklisting of workers – it utilised every trick in the book to drive down costs, and transfer risk to its suppliers and workers and to reduce the influence of its workforce in how the company was run.

Smith's attack came as MPs said there were "gross failings of corporate governance and accounting" at Carillion.

Westminster's Work and Pensions and Business select committees made the claim in review published tomorrow (Mon).

A statement from Work and Pensions committee chair Frank Field and Business committee chair Rachel Reeves said: "There are many losers from the Carillion calamity.

"Many of those face an anxious wait to see what the consequences of the gross failings of corporate governance and accounting will be for them, their businesses and their families.

"Not so these omnipresent consulting giants, who can always be relied upon to emerge enrichened from any crisis. As everything collapsed around them, they were merrily cashing cheques.”

Meanwhile, Smith said “Carillion is a microcosm of all that is wrong" with free market capitalism.

He said: "It is a model that has played out with devastating consequence and in individual companies like Carillion; across the nations and regions of the UK; and across industrial sectors, some of which are no more.

"It is a model characterised by a reckless obsession with the free market and privatisation; with maximising shareholder value at the expense of investment in workers’ wages, skills and workplace innovation."

Smith makes the remarks in the forthcoming edition of the Scottish Left Review

The Sunday Herald approached Carillion and the UK Government for a comment.