US consulate builder in Milan agrees 31 million euro payout over worker abuse

US-based Caddell Construction, which is building the new American consulate in Milan, has agreed to a settlement of nearly 31 million euros (USD 35 million) that includes back pay and damages for foreign workers who prosecutors said were paid less than USD 2 an hour.

The settlement was signed by Milan prosecutors, the Alabama-based company and the court-appointed administrator who took over the site after an investigation into exploitative labour practices. Prosecutors said Caddell remains under administration and the criminal investigation against the company and two of its managers in Italy is continuing.

Caddell did not immediately respond to a request for comment. Italian Labour Minister Marina Calderone called the probe "one of the most significant operations in recent years against illegal labour contracting and worker exploitation" and said the outcome showed that the state would not abandon vulnerable workers. Unions assisting the workers welcomed the settlement and described it as the largest of its kind in Europe.

Nearly 300 workers identified so far will receive an average of 50,000 euros (USD 57,000), with some getting up to 90,000 euros (USD 102,000) in unpaid wages and damages for emotional distress, according to Luca Stanzione, secretary general of the Milan branch of CGIL, a major trade union confederation. "The compensation is an excellent result achieved through the efforts of prosecutors and trade unions," Stanzione told The Associated Press. Of the total settlement amount, about 19.7 million euros has been set aside for direct payments to workers, while the rest will cover obligations to Italy's social security authorities and labour inspectorate.

Most of the workers involved were from India, where they were recruited. The Associated Press also spoke to workers who were recruited from a Caddell embassy project in Africa. Milan prosecutors said the workers were constantly exploited. They said that although workers were promised fair wages during recruitment, their pay slips showed they were paid less than USD 2 an hour and that food and housing costs had been illegally deducted from their wages. The minimum wage for construction workers in Milan starts at 13.19 euros, or over USD 15, an hour.

The construction site was placed under judicial administration to restore legal operations. The new Milan consulate campus is being built on a 10-acre, or 40,000-square metre, site at a former shooting range and will replace the current consulate housed in a high-rise building. Separately, the Labour Ministry said dozens of workers have been granted unemployment benefits, while 265 have received special residence permits and applications for the remaining workers are being processed. Overall, the settlement provides compensation to workers while the investigation into the alleged labour exploitation continues.

With PTI Inputs

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