Capita faces legal action after hitting graduates with bills for thousands when they try to leave

Naive or desperate graduates subjected to 'desperate unfairness' under 'astonishingly asymmetric' contract, says barrister leading case

(PA)

Outsourcing firms Capita and FDM are facing legal action for handing graduates bills for thousands of pounds when they left jobs at the companies in what amounts to “indentured labour”, according to the barrister bringing the case.

Under both companies’ schemes, graduates must undergo training at a cost of up to £21,000 and then complete two years’ work. If they leave before this date, they are liable to pay the full cost of the training.

Jolyon Maugham QC of the Good Law Project, who is preparing to bring a claim to ban the practice, told The Independent that naive or desperate graduates were subjected to “desperate unfairness” under “astonishingly asymmetric” contract terms.

Mr Maugham said training was “very, very poor and the fees charged are massively inflated at a large multiple of the cost to the company of providing it”.

Capita used to charge up to £21,000 for its programme but dropped the maximum to £13,000 last year.

After completing training, employees can be dismissed at any time and then pressured to pay the penalty fee.

Workers can be moved anywhere in the country at short notice and travel expenses are not guaranteed, sometimes leaving people who are already on a low wage significantly out of pocket, Mr Maugham said.

He added that graduates don’t know if the bills are legally enforceable, but they often can’t afford to pay so they stay despite wanting or needing to leave. “This is why I refer to it as indentured servitude,” he said, adding that FDM had “aggressively pursued” some former employees for debts.

Mr Maugham’s team is attempting to raise £50,000 via the crowdfunding site CrowdJustice to support the case. He is also backing legal action against the Vote Leave campaign and Uber.

Capita, which provides a broad range of services from the tagging of offenders to collecting the BBC licence fee, has attracted criticism for its role in a number of controversial government outsourcing contracts.

Earlier this month it was accused of putting patients “at serious risk of harm” after women were dropped from national cervical cancer screening programmes and medical records and supplies went undelivered because of NHS England’s “deeply unsatisfactory” cost-cutting contract with the firm

In a damning review, the National Audit Office lamented the failure of the contract, saying neither the NHS nor Capita understood the complexity of the service.

The company last month confirmed plans to tap shareholders for £700m after writing down the value of its business and issuing a profit warning.

An FDM spokesperson said: “FDM Group’s training programme provides an opportunity for all graduates to gain and build a successful career in IT.

“We provide an average of 10 weeks of training which equips trainees with the skills and knowledge and nationally recognised qualifications that are essential for them to become an IT or business consultant, across a number of service areas.

“We have a clear and unwavering commitment for all trainees and employees to be treated and compensated fairly and in compliance with all applicable laws and regulations. Our employees also receive a competitive graduate salary that far exceeds national minimum wage levels.”

Capita had not responded to a request for comment at the time of publication.