Our experts solve your e-business difficulties

In the latest of an occasional
series on all aspects of e-business, Linda Farrell, partner at law firm
Bristows, and Marie Firmrite, director of the City office of international
career management consultancy Drake Beam Morin, offer guidance

Q: How do we deal with staff that
have sent dubious material on the company intranet? The material isn’t breaking
any laws, but where do we stand?

LF: Hopefully, you will have a policy
in place which sets out the limits of permitted use of your intranet and gives
clear guidance to staff on what they must not do. As a company, you will be
concerned not only about time-wasting but also becoming vicariously liable if
the dissemination of such material leads to a claim for harassment or exposes
the company to public ridicule. A full investigation should take place without
delay. This will involve speaking to the individuals involved and examining their
PCs. If appropriate, the disciplinary procedure should be invoked but care
should be taken to deal fairly and consistently with the culprits. This is not
always straightforward if the employer has turned a blind eye to such behaviour
in the past.

Q: When we launched our Internet
business three years ago, we recruited an impressive team. But although
analysts still rate our business model, our shares have been downgraded and our
staff option packages are no longer the incentive they were. Some key players have
already walked and others might follow. Exit interviews show that people are
nervous about their future and the current dotcom climate does little to
reassure them.

MF: Sadly, you are not the only
organisation facing this problem. Holding on to staff has become a key issue
for new economy companies. But I’m pleased that you are trying to find out why
your staff are leaving. Exit interviews are a fundamental part of any retention

You say that analysts
still believe in the business. If you haven’t done so already, you should be
circulating these analysts’ reports to all staff. Let them see that the wider
business community really does see a future for your company. A strong internal
communications programme may help allay unjustified fears about your future

While you cannot avoid
the uncertainty that a bear market brings, you can at least plan for it. Make
sure your staff know that you understand their values and needs. When you
recruit, introduce selection and orientation practices that promote cultural
fit. That will help ensure that recruits not only possess the skills you need
but also have the attitudes, personality traits and behaviours that promote

You may also consider
introducing compensation plans that help staff balance work and family life.
With so many companies willing to match competitors’ financial offerings, the
value of money or options as a recruitment and retention tool is diminishing.
To be truly effective, packages must combine financial reward with opportunities
to promote feelings of achievement, ownership and involvement.

Finally, you must
recognise that every company loses staff so, when they do depart, make sure
they leave with fond memories. After all, alumni who enjoyed their time with a
past employer may provide new business or referrals, or they may even return
after gaining valuable experience elsewhere.

Q: I am an HR manager for a growing
dotcom and want to know whether I can still rely on traditional restrictive
covenants and garden leave clauses to keep our senior executives away from
competitors when they leave?

LF: It is important to consider the
principles on restraint of trade in the context of the speedier
"e-trade" that prevails in the dotcom world – in other words, the
length of covenants and garden leave that were readily upheld 10 or more years
ago are unlikely to stand up today. Garden leave clauses are now subjected to
as close a scrutiny as restrictive covenants and the dotcom employer will be
well advised to face up at the outset to the "atrophy" of skills
argument that will undoubtedly be raised by an employee who is told to sit at
home for a long period unconnected to his corporate cyberworld. So, yes, you
can still rely on traditional restrictive covenants and garden leave clauses
but they should be realistically framed in the three- to six-months bracket, as
longer periods of purdah are likely to be unenforceable.

Q: I have to set up a sabbatical
policy for our staff. As we are a start-up, there is no-one who has more than
one year’s service so a policy that rewards people after 15 years is unlikely
to impress. Do you have any thoughts on what we might do to motivate staff in
the medium term?

MF: You are right to recognise that
the promise of a sabbatical in 2016 is unlikely to inspire your staff today.
But it does make a statement about belief in your company’s future so it would
be sensible to incorporate one.

As a medium-term
measure, you might consider allowing employees to hold over part of their
annual holiday entitlement for a future year. After five years, someone banking
a week’s holiday each year could combine their backlog with their current
year’s entitlement to take a couple of months off.

If you were to
introduce a policy like this you would have to set limits on the amount of
holiday which could be held over to ensure that all staff have a sensible
annual vacation. You might, for example, insist that everyone takes at least a
two-week break each year.

Q: Is it lawful to monitor employees’
e-mails and the type of Internet sites they visit to ensure they are business
related? I assume I am within my rights to install some kind of Internet
filtering software on our network if I see fit.

LF: Under the Regulation of Investigatory
Powers Act 2000, an employer may be sued by either the sender or the recipient
of a communication if it intercepts communications on its network unless it has
either the consent of both sender and recipient or lawful authority. Under the
Lawful Business Practice Regulations 2000 employers may lawfully monitor (but
not record) to determine whether communications are business-related. However,
the information commissioner (who polices the Data Protection Act) takes the
view that such routine monitoring is likely to amount to unlawful processing of
data unless the employer has reason to believe that specific misuse has been
identified. The draft code of practice due this year states that automated
monitoring is to be referred to human monitoring and it should not intrude
unnecessarily on employees’ privacy or autonomy.

One of my staff has been offered a job by a rival dotcom. We have
first-mover advantage in our sector and we do not want to see this person take
sensitive market information over to the competition. Should we make a counter
offer to retain them?

MF: I was more interested in what you
didn’t say in your question than what you did say. There was no indication of
the value you place on this individual. Reading between the lines I suspect
that if they weren’t off to a competitor, you wouldn’t really mind seeing the
back of them.

Whatever your view,
I’d be very reluctant to make a counter offer. In a worst-case scenario,
they’ll play you off against your rival and you’ll get involved in a bidding
war for someone you may not want. The best case is that they accept your offer.
But if some research I saw in one of our US offices recently is anything to go
by, you won’t keep them for long. This suggested that 72 per cent of people who
accept a counter offer leave their employer within one year. If you do decide
to go ahead with the counter offer, you must consider the impact this could
have on your other staff. It will certainly cause confusion about your value
system, it may lead to resentment in some quarters and it will probably tempt
others into trying for similar offers. And that’s an organisational culture you
could certainly do without.

If, as you indicate,
your chief concern is that the employee in question will take your commercial
secrets with them when they leave, I would suggest that you give them a gentle
reminder of the terms and conditions contained within their contract. But
before doing this, I’d consult your solicitor to determine your legal position
and the exact nature of the restrictive covenants that they signed up to when
they joined the company.

Q: How do I deal with a request for a
former employee who asks to see copies of all e-mails the company holds about

LF: The former employee has a right of
access to all personal data held about him by the company on making a written
request. The company must provide the information within 40 days of receiving
the request.

However, there are
exceptions. The company is not under an obligation to provide: references by
the company about the former employee; or e-mails disclosing information about
another individual, unless that person has consented or the company takes the
view that it is reasonable to disclose the information without consent. One
solution may be to delete references to any other individuals from the e-mails
which the company discloses.

It may also be
possible lawfully to refuse such a request if compliance would involve
disproportionate effort by the company.

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