Companies who blacklist workers could be sacked by the town hall if recommendations from a new report get the nod.

The “shameful practice” of blacklisting – using secret files to keep union members or safety whistleblowers out of work – was the subject of an Islington Council scrutiny paper published on Monday.

It recommends a clause in future contracts allowing the council to terminate a contract if the company is implicated in blacklisting – a scheme that will now go before the council’s ruling executive for approval.

Cllr Troy Gallagher, chairman of the committee, who commissioned the report, said: “Blacklisting is a shameful practice and workers who were placed on this list were deprived of an honest living through no fault of their own.

“Islington Labour, with the GMB, have been at the forefront of the campaign against blacklisting and my report shows the measures authorities can take to ensure this terrible practice is never allowed to happen again.

Scandal

“I will also be writing to the Secretary of State for Local Government to request an urgent public enquiry.”

Cllr Richard Watts, council leader, said the construction blacklisting scandal has “destroyed lives” and the council “will not do business with people who have ruined decent people’s lives.”

Peter Farrell, chairman of the construction safety campaign, who staged a demonstration against blacklisting in King’s Cross last month, said: “It’s absolutely brilliant, really good stuff and I congratulate Islington. [MP for Islington North] Jeremy Crobyn has also been a very strong supporter.

“I’d urge other authorities to follow suit.”

Paul Kenny, General Secretary of the GMB added: “We are delighted Labour in Islington has taken an important step to ensure those companies guilty of blacklisting workers will get no more of the public contracts until they own up, clean up and pay up for what they did to their 3,213 victims.

“It’s now time for other local authorities to follow Islington’s lead.”

The national scandal erupted after a raid in 2009, where more than 3,200 workers were found to be blacklisted in the UK by more than 40 companies.