A man has pleaded guilty to running a covert database containing personal information used to blacklist more than 3,000 construction workers.
Magistrates in Macclesfield sent Ian Kerr for sentencing at crown court because they believe the maximum £5,000 fine they could impose was not sufficient. The crown court can impose an unlimited fine.
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They also ordered full details on Kerr's firm, The Consulting Association, be disclosed so the court could properly sentence him.
Kerr's offices were raided by officials from the Information Commissioner's Office (ICO) in February following a nine-month investigation.
The Consulting Association, based in Droitwich, was found to hold files on 3,213 individuals with data going back 30 years. The files included information on trade union activity, employment history, conduct and personal relationships. There were clippings from newspapers and notes from union meetings.
The ICO also found invoices showing that more than 40 of Britain biggest construction firms, had subscribed to Kerr's services. They paid a £3,000 annual fee and extra for each individual search and updating of information.
Kerr was charged with offences under the Data Protection Act of not registering as a data user and not handling data correctly. Kerr's solicitor, James Strong, told the magistrate that Kerr was only an employee of The Consulting Association, drawing a £47,000 annual salary, but he was unable to give any further information about the group.
Mick Gorrill, assistant information commissioner, said that Kerr's offences "went to the heart" of the Data Protection Act because people were unaware of the information held on them and could not check it.
The information commissioner is now looking at issuing enforcement notices against some of the construction firms which subscribed to Kerr's services.
A dozen construction workers who had been blacklisted were at the court to hear the verdict.
Steve Acheson, a Manchester electrician, said: "People have got a right to be a trade union member and it is not right you should be blacklisted just for that. I am pleased at what has happened today."