MILAN, June 9 (Reuters) - A judge on Tuesday upheld a decision to place the Italian arm of U.S. builder Caddell Construction under judicial control, as it faces an investigation into alleged worker abuse at Milan's new U.S. consulate site, documents seen by Reuters showed.

The emergency measure was imposed on May 29 by Milan prosecutors -- the latest step in a broad crackdown on labour exploitation across several sectors over the past three years.

In a 38-page ruling, a Milan court judge said that based on available evidence, the Italian unit of the Alabama company had recruited workers in India through an intermediary and put them to work "on exhausting shifts, underpaid, without safety protections and under the constant threat of dismissal".

The judge added that the treatment of workers "does not appear to be the result of occasional initiatives ... but rather a sort of corporate practice".

The court appointed a judicial administrator to work alongside the company's management and report to the judge every three months, with the task of ensuring compliance with labour laws and regularising the existing workforce.

US FIRMS SAYS COMMITTED TO TREATING WORKERS FAIRLY

Caddell Construction said in a statement it was "fully and proactively cooperating both with local and judicial authorities, as well as conducting our own comprehensive inquiry into this matter to ensure all our global partners are in compliance with all labour standards and legal requirements".

"Caddell is committed to treating and paying workers fairly", it added in the statement released through its lawyer Andrea Puccio.

Caddell Construction specialises in large-scale projects, including contracts for U.S. embassies and military facilities. According to its website, it has "a portfolio including projects worth more than $24 billion throughout the United States and in 38 countries across five continents".

Construction on the U.S. consulate in Milan started in 2022. The contract was worth almost $210 million and work was initially scheduled to finish in 2025, but this date was subsequently put back to 2028.

A U.S. State Department spokesperson told Reuters that "U.S. law enforcement is working in full cooperation with Italian authorities. The U.S. government does not tolerate labour exploitation".

Days after imposing the emergency judicial measure, Milan prosecutors arrested the head of Caddell's Italian branch as he was about to board a flight to Turkey, as well as one of the supervisors of the Indian workers.