Employment law clinic No 6 Company restructuring

Handling people issues effectively when reorganising a business at the time
of, and following, a merger includes anticipating the tensions that arise from
inter-personal relationships. Harassment and bullying claims often arise in
these situations. Elaine Aarons, employment Law Partner, and Robbie Gilbert, HR
Consultant of international law firm Eversheds examine these issues

Our kaleidoscope culture of merger, acquisition and rationalisation is a
perfect breeding ground for harassment. People who worked well under the old
structures are dislocated and unsure whether they can cope. New jobs can
involve inconvenient hours and duties. Line managers lacking guidance become
more stressed. Managers who feel their jobs are under scrutiny within the new
structure may become over-macho in their eagerness to prove themselves.

To ensure harassment and bullying does not frustrate the gains merger should
bring, the following legal and HR points may be useful.

Legal issues

– Potential liability can even arise from acts pre-merger as well as
post-merger. If the merger is a "transfer of an undertaking" and falls
within the Tupe regulations, the "new" employer will inherit any
liability of the "old" employer

– Pre-merger, assess the risk. Is there a history of cases or complaints?
Due diligence should identify any potential claims of which the "old"
employer is aware, in addition to any current or past litigation

– Identify as soon as possible employees with a past history of stress or
mental illness. These individuals are at higher risk of bringing successful
personal injury claims if overworked or harassed. Exposure to disability
discrimination claims should also be considered

– Interim managers who are not employed directly by the employer are often
retained in merger and change scenarios. Employees bullied or harassed by them
could have claims against their employer for this. Similarly, agency workers
could themselves make claims if harassed

– Employers may find themselves vicariously liable for the acts of
harassment or bullying by their employees, unless they have taken all
reasonably practicable steps to prevent the conduct

– Even if the harassment or bullying is not by reason of sex, race or
disability, employers may still be liable for personal injury claims and/or
claims for breach of the contract of employment by virtue of having breached
their duty of trust and confidence owed to the employee

– Individuals guilty of harassment and bullying are unlikely to be able to
hide behind the Human Rights Act by claiming the defence of freedom of speech

– Statutory protection for employees is expanding. Under the Framework
Directive on Equal Treatment in Employment and the Directive on Race and Ethnic
Origin the Government must introduce new laws by 2003 expressly defining
harassment for the first time in UK discrimination law

HR issues

– With proper consultation ensure job restructuring observes diversity
principles. Consider trial periods and reviews

– Clarity is always in the business interest, but particularly at a time of
change. Define the new roles and their objectives, plus to whom people should
go when problems emerge. The removal of needless uncertainty sharply reduces
stress. Stressed managers can become harassers and bullies

– In the midst of change, revisit the organisation’s commitment to dignity
at work. A strong diversity/equal opportunities policy is not a "we’ll do
it when we have time" option. It needs to be central to the change
strategy, with highly visible, top-level, buy in

– Provide an environment which is not psychologically damaging to the
welfare of employees

– Have a developed harassment policy. Consider your target population and
their vulnerabilities. Define harassment and give examples. Distinguish between
unacceptable behaviour and what is needed to deliver effective management or
good team performance. Assess the policy’s effectiveness through your regular
attitude surveys

– Appropriate, confidential procedures for raising harassment complaints are
essential, usually as an add-on to standard grievance procedures. These enable
issues to be raised with somebody outside the relevant line reporting
structures – to a member of the HR team, or even via a confidential phone line,
for example

– Roll out the policy to staff with documents and briefing. Include training
in dignity at work and diversity policies, with due emphasis on harassment, to
prepare managers for the new structure

– Harassment can take place outside strict "office hours". If
there is a history or culture of work-related socialising, ensure employees are
aware how far the policy extends.

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