RMJM rocked by late pay and staff walkouts

RMJM, the firm of architects famous for its work on the Scottish Parliament building, has been hit by a series of crises at its offices around the world, including mass walk-outs of staff and unrest over late payment of salaries.

• Sources say there is growing disquiet in RMJM's ranks about the strategies being pursued by chief executive Peter Morrison and the increasing influence of Sir Fred Goodwin

Scotland on Sunday has learnt that the firm, which controversially hired the tarnished banker Sir Fred Goodwin as a consultant, has seen 80 staff quit its Hong Kong office in recent weeks. Barry Shapiro, director for Asia, is also understood to have stepped down.

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Several senior staff in the US, where it has offices in Princeton and New York, have also gone, including Ronald Weston, a managing principal for RMJM in America and international design principal Jo Palma, a "big hitter" who worked on the Nato headquarters in Brussels in a previous role at Skidmore, Owings & Merrill.

The fall-out in Asia, where the booming jobs market is more fluid than in other parts of the world, comes amid fears that the authorities in Dubai could remove or freeze RMJM's operating licence following complaints by staff based in the Arab emirate that they are not being paid on time.

A spokesman for RMJM, also known for its work on the Falkirk Wheel, Abu Dhabi's Capital Gate and the controversial Gazprom tower in St Petersburg, said the issues the company faces are shared by many architects which have an international footprint.

"We're a global firm and there will inevitably be some regions which are stronger than others as certain economies emerge from recession faster," he said. "In terms of staff turnover, we're no different from all other major global firms - we have to match our staff numbers, both up and down, to the level of work available. The reduction in the number of principals in the US relates directly to the slowdown in work there and in Hong Kong. Whilst some staff have left in recent months, we've also recruited there in the same period."

But sources in the Dubai office said some employees have received visits from the police after cheques bounced due to the late payment of salaries. Staff in Dubai estimate they have received their pay on time on fewer than three occasions in the past 14 months.

Although the threat to RMJM's licence is unlikely to result in the forced closure of its operation there, sources say it could cause delays to some of the firm's projects in the Middle East. While a licence is frozen, the authorities will not send inspectors to sites.

It is understood the firm recently received a visit from officials from Dubai's Ministry of Labour after it was brought to the attention of the government department that RMJM had not been paying its staff on time.

"They (the officials] came to our offices about a week ago and demanded that staff be paid immediately," one senior member of staff said. "On 30?October, all September salaries were paid. They also made the claim that our October salaries would be paid on time. We should have received this on 1?November but didn't. It's a very harsh environment out here in the Middle East. If people don't get paid on time, cheques bounce and if a cheque bounces it's a criminal offence."

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The RMJM spokesman blamed the problems on a significant client which is behind on its own payments to the firm as a result of the downturn in the Dubai economy. "That in turn has caused cashflow issues, putting us in a similar position to many of our competitors in the region," the spokesman added.

Sources say there is growing disquiet in RMJM's ranks about the strategies being pursued by chief executive Peter Morrison and his father Sir Fraser, who has long been friends with Goodwin, the former chief executive of Royal Bank of Scotland. Questions have been raised about the speed of the firm's expansion in recent years - particularly in the US. There are also concerns about the increasing influence of Goodwin, who was hired as a consultant on a six-figure salary.

One source said: "The recent changes (at the top of the organisation] have resulted in a much harsher regime."

The last available accounts for RMJM showed profits slid to 5.7 million in the 12 months to 30 April 2009 from 7.9m in 2008. Its bank borrowings rose to 18.4m from 11.3m during the period and turnover increased 22 per cent to 121.8m.