Rules of Engagement

It may come as a surprise to us all, but HR people have friends. I can even confess that I have several friends who are openly 'HR' and I respect them for it.

We may titter a moment at the idea of friendless HR people but there is a serious point here. With the rise of Social Networking Media and all its wide choice of communication that it offers to us and our friends, there is also the aspect that it is public. Very public.

I remember a story of a person who attended the European Championships in Germany and waved excitedly at the camera when they realised they were on the big screen. They had forgotten that their boss also liked football and was watching back home and the person had not booked holiday but had done a bunk pretending to be sick. It resulted in instant dismissal.

There have been cases of individuals losing their jobs because of You Tube videos of them drunk while holiday or a tour. We may feel very strongly what we do in our spare time is own business but when we risk having such unsavoury antics posted publicly then we are exposing ourselves to the criticism and much more of others. It is very difficult to stop these days as often these clips can be posted without your permission. That may not help when your boss, tutor or best customer sees it.

The fact is that Facebook and all the multifarious derivatives are very open to public view. I even know of a case of where a young PA was so obsessed with using Facebook through the day, one of her bosses had even requested to be her friend, an invitation she accepted, and he promptly sent her a message to get him a cup of tea while sitting no more than two desks away. The point being that the boss felt it was becoming the only way to communicate with her while she was cheesed off she got found out that she was browsing Facebook all day in company time.

At one place I worked a few years ago, there was a high percentage of staff who were relatively young (can I say that anymore?) who were desk based in a large open office. Over 75% had Facebook as their home page and they communicated to each other all day via the messages when they actually sat at the furthest points no more than 20 metres apart. Facebook and the likes can be very counterproductive in the modern office and that's a real problem for employers.

For the employee, it also exposes what they are doing. Messages are timed and public as are the photos. It can be all too easy to be monitored and this can pose serious problems. The adage of 'What goes on on tour, goes on You Tube' is becoming a new mantra and it is getting a little more serious. As we relish the thought of knowing MP Expenses details, would it not be nice to know how much time our paid employees are spending on social network sites during the hours of work?

There are many instances of people who have posted disparaging remarks about their bosses or companies on the web and getting disciplined at minimum while others simply get fired. We all get frustrated and bored in our jobs, we may even dislike the company and individuals such as our boss or a colleague. We may even choose to tell our friends and family, but you wouldn't necessarily take out a TV advertisement with your name on it and let the world know, would you? That's what social networking can be. It's an uncontrolled medium that is public in many places and so it can be monitored far more easily than we like and our bosses and even HR people can have accounts too.

Imagine 'slagging off' a colleague on a social networking site and then that employee raises a grievance that they are being bullied at work - would your comments be evidence of such bullying? Indeed they would.

It is as well to have your own 'Rules of Engagement' on social networking - if you use it extensively, have your own guidelines for when you communicate, how you communicate, what you want others to say to you and what you don't want shown. It makes just a little sense to think this all through beforehand rather than discover a 'mate' has posted a picture of you drunk in gutter when you were meant to be at home ill.

It's as well to be very wary of this. There is a fine line for companies to pry too much into what employees are doing in or out of work hours than can be construed as breaching our privacy. But when we are silly enough to make it all very public, well that's just asking for trouble.

Can A Grievance Be Avoided By Winding Up A Company?

Here is a case I heard about over the weekend and is one to vex the legally minded. I may not have all the specific details but the gist is interesting enough. No names, no pack drill, at this stage.

A company is one of 4 operating out of the same building and has at least one director common with all the others, the MD. The company has raced into the recession with all graphs pointing up and is very bullish about its future and so has been taking on staff. The inevitable happens and a brick wall is hit as the recession takes over and so the company figures have a massive and sudden decline. A first step is taken to reduce staff and the MD fires a few people for lack of performance.

Within a quarter, the situation has further deteriorated dramatically. The company has lost half its sales within the period and clearly a commensurate amount of cost needs to be reduced. Dismissal of a swathe of staff is actioned and the staff are 'made redundant' and the selection criteria is based around performance. The company has now reduced staff by 50% within a short period.

Of the outgoing staff, several raise grievances against the employer for different reasons and one female raises a grievance involving sexual harassment. To complicate matters, the officer who needs to answer the grievances is a family member of the MD. The pressure starts to build as the grievances are dealt with, and it is clear that the sexual harassment grievance is one which will not go away easily.

Then the MD does something 'innovative'. Due to financial pressure, he 'winds up' the company that employed all those staff. Under advice, presumably from a lawyer, he believes that there is no longer a company to answer any of those grievances and so all of the claims have to be dropped.

The 3 other companies in the same building are moved to a new building and carry on - in fact some of the remaining staff of the old company move too.

Grievances And The Law

As the details of the dismissals are sketchy, it would be wrong to assume that there was anything untoward happening. Dismissal by redundancy is perfectly allowable under law if a company is not doing well financially. I have argued previously that many companies use redundancy the wrong way in order to 'clear out dead wood' and not focus on the job roles which need to be lost and this becomes the source of many grievances in a situation where redundancies are made.

In an earlier, comprehensive article on redundancy, I highlighted that redundancy should be about making the role redundant due bad finances in the first step. After deciding which roles can be done without, then you start applying objective and fair criteria to the people occupying such roles, particularly if they are many who occupy such roles but only a proportion have to go. Using performance based criteria as an objective measurement for distinguishing which individuals should be made redundant is a potential minefield, particularly if it is the major or only criteria used but also if due management procedure has not been implemented - by that I mean there should have been regular performance reviews documented for all such staff, proper targets set and that all staff have been treated equally under the process.

It could be too easy under such criteria for an affected employee to argue that they were not given the same opportunities as others, or there were extenuating circumstances like a recession or their main customer also suffered a downturn. This latter one becomes a spiral argument - if the company experiences tough times due a major client experiencing a tough time because of a recession as its customers are experiencing a tough time, it is rather stupid to assume the employee could be successful in such an environment and so merely making someone redundant in a recession due to performance becomes a real minefield. Can they be blamed for a recession? Should management have anticipated this beforehand and done something about it?

It easy to see why this company had grievances raised by using performance as a major criterion in making staff redundant. However, the allegation of sexual harassment takes centre stage. This a grievance that has legs and cannot be dismissed easily. Most lawyers start salivating at the prospect of such a case as, if there is a genuine basis to it, it comes with a pathway to unlimited compensation in the eyes of a tribunal.

In this instant, against overwhelming pressure from the grievances, the MD took the step to wind up the company all the complaining staff had worked for and then retrenched his activities on his 3 other companies of which he was a director. By doing so, he effectively killed off the entity against which the former employees had a complaint and so there is no entity to answer the complaint. Game over.

Or is it? In my own comprehensive article on redundancy, in which I argue that redundancy should be the point of last resort for companies managing a recession-affected business, there is an assumption that grievances have to be answered by all companies. But what if a company ceases to exist? Do, in its cessation, all outstanding grievances become null and void? It is hard to get any information on this on the web and so it is clearly a rare subject.

Thinking logically, there are many people who have been made redundant and their employer then goes bust. In such cases, pay outs can be as little as nothing because there is literally no money in the pot left to pay any salaries for anyone. Directors have a habit of rising phoenix-like from the ashes of folded companies and starting again - in fact, there are many 'pre-packs' offered by accountancy firms which allow companies to do this with almost impunity to rid themselves of creditors in a very questionable way, almost over night.

If that can be done with ease, what happens to outstanding grievances? In one way, grievances are potential 'creditors' and so any dispersal of assets in liquidation needs to account for this - or do they? It seems a very convenient and easy method for a company to rid itself of troublesome grievance cases, particularly if they are ones which are likely to be heard sympathetically by any tribunal and may award compensation to the claimants.

And what happens to the directors of the company in question? In winding up a company and carrying on in others, do the directors conveniently deflect the complaints also? Finally, in the case of sexual harassment, the most serious of the complaints in the eyes of the law, does the named individual in the complaint also evaporate when the company is wound up, even if the person named is not a director?

I do not have the answers to those questions. I would appreciate comments and insight from those who have understanding and expertise in these areas or from those who have experienced the same. I will also keep everyone informed as this is the first case I have seen where a company has rather cynically tried to rid itself of its responsibilities to treat staff being made redundant fairly by deliberately winding up a company and carrying in others.

It seems too easy and, having been involved as witness in an industrial tribunal involving sex discrimination, I know that individuals and not the company per se, have to answer to the charges. My suspicion is that this action does not mitigate an individual's responsibility when it comes to sexual harassment.

But I may be wrong.

The Answer To The Question

As I alluded to, life is not that simple. Three aspects of the law come into play in this situation.

Firstly, it is unclear what the ownerships between the company wound up and the other companies are. I suspect that one of the 3 other companies is either the whole or majority shareholder in the wound up company and if so liability for all grievances simply transfers up the chain.

Secondly, if any of the remaining staff of the wound up company have been absorbed into any of the other companies which involves the transfer of business undertakings like servicing a client base, then the laws of TUPE (Transfer of Undertakings) comes into play and again all current claims against the company by former employees have to be listened to in the same way as before.

Finally, as I thought, any claim involving sexual harassment or discrimination names individuals and can be claimed on an individual even if the company no longer exists.