Pandemic pressure tempts companies to non-compliance

Employees need to be heard on ethical dangers

Neta Meidav is co-founder and CEO of Vault Platform, a tech company disrupting workplace misconduct reporting and resolution. Neta worked as a senior adviser to the UK Government for over ten years and is a knowledgeable resource on solutions to the problem of harassment and bullying in the workplace.

Companies should be bracing for a wave of lawsuits as a by-product of the already significant disruption caused by COVID-19. A grave warning came from Matthew Taylor, interim director of Labour Market Enforcement and chief of The RSA, who said in late July that the pandemic was putting pressure on companies to cut corners regarding employee safety and wellbeing in a bid to stay in business.

As he launched the UK Labour Market Enforcement Annual Report, Taylor said a high-pressure economic environment would lead to the increased temptation of non-compliance, while simultaneously lowering the resistance of individuals at risk of being exploited as they struggle with employment.

In the city of Leicester, which faced increased lockdown restrictions following a spike in Coronavirus infections, a Sunday Times investigation found that workers in the garment factories for which the city is well known were offered well below the UK’s minimum wage and worked in conditions that defied social distancing rules. The UK care home sector is also under fire, from both the families of residents and employees themselves, over conditions in an industry that is one of the hardest hit by the virus.

Meanwhile, the latest bulletin from the Gangmasters & Labour Abuse Authority raised similar concerns over the findings of its own investigations during the first quarter of the year which focused on a surge of reports from the car washing, agriculture, hotels and restaurants, food processing, and construction sectors. Yet it’s not just industries that require workers to be on-site facing backlash from disgruntled workers. Office-based jobs that have moved to a work-from-home model are facing legal action from employees that feel unsupported with difficult working conditions, the pressure of childcare, and even the risk of domestic violence. Furthermore, interpersonal misconduct such as racism, bullying, discrimination, and harassment hasn’t gone away with reduced physical interaction, it’s simply changed vector to become an online problem.

Farore Law issued this advice: “An employer’s liability for the conduct of their employees is not waived simply because a victim is working from home. If such conduct is related to a protected characteristic and done ‘in the course of employment’ then the employer will be liable for the discriminatory detriment that the worker suffers.”

Indeed, 2020 has been eventful in that there are multiple new crises faced by businesses – not just Coronavirus directly – that share commonalities in that they have surfaced new risks and vulnerabilities, deepened public understanding and concern, and started to shine a light on a set of new policy and operational challenges. One such challenge is that of discrimination and racism within the workplace, which is in part driven by the pandemic as Black and minority ethnic employees are disproportionately exposed, but has also gathered significant momentum in its own right.

These risks of non-compliance and ethical failings bring with them the opportunity for significant reputational and financial damage through negative media coverage and settlement costs. Furthermore, one thing that’s become increasingly clear is that employees are becoming more organised and more confident when it comes to speaking up.

The Future of Work survey carried out by Herbert Smith Freehills revealed that 80% of surveyed enterprises globally expect to see a rise in activism among both employees and casual workers in the future. The expectation is higher among large companies (those with annual revenue of $1bn or more), where 86% say they are more likely to see a rise in activism, with social media continuing to play a key role as a tool for both coordinating and amplifying workforce activism. Some 95% of respondents to the law firm’s survey said they expect to see an increase in their workforce making its voice heard through social media channels in the future.

Hitting the headlines for the wrong reasons is obviously not good and in many respects is entirely preventable. One of the common problems is that companies weren’t listening to their employees, or if they were, they couldn’t hear them. There are commonalities in the required solution. If we take Adidas as a case in point, one of the public demands from employees alleging systemic discrimination was for the “creation of an anonymous platform where employees can report instances of racism and discrimination, and for protection against retaliation”.

Employees are actively seeking ways to voice their concerns and if employers fail to provide adequate tools internally, they will likely take their voice to a public platform with potentially disastrous consequences.

Ethics and compliance are no longer process-driven strategies or a list of boxes to be checked off, they’re a part of the modern company culture and legacy listening devices, like ethics hotlines, are part of the old world and little used today. Legacy means passive and passive means inaction. Companies should want to hear from their people what’s really happening on the ground. They should want to get a head’s up on problems before they grow out of control. As the saying goes: “the truth will out,” so companies blinkered to non-compliance now will be saving pain for the future. New technologies have evolved, which offer active listening, essential psychological safety, and empower people to speak up and report and resolve misconduct internally within their companies. Racism, exploitation, and discrimination can be discovered and stopped if companies invest in systemic internal change and open up to innovation in this space. ■

Neta Meidav

CEO & Co-founder

Vault Platform