Human Resources

6 Examples of HR Gone Wrong

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As part of the remit of working HR, we take precautions to prevent the worst from happening within our organisations.

While we hope that these eventualities will never come to pass, some organisations have experienced some HR disasters.

We’re here to tell you all about them, including the legal implications and how these could have been avoided.

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Urban Outfitters Volunteer Days

Back in 2015, the group owner of Urban Outfitters (URBN) caused chaos when they asked their staff to work for free.

They presented this as a volunteering opportunity for their store-based colleagues to help out in the warehouse during their busy period. They posed the request as an excellent team-building exercise and way to build goodwill among workers.

Naturally, their request for their staff to work a six-hour shift for free was the subject of much derision. As many pointed out, the company wanted the extra working power to get through the busy period but weren’t willing to offer any financial compensation for doing so.

The email was leaked by Gawker, and readers were quick to point out that CEO Richard Hayne has a net worth over a billion dollars, making him one of the richest people in Pennsylvania.

Employees at Urban Outfitters generally make minimum wage, which for many of them meant that volunteering hours was simply not an option.


 

What does the law say?

Although this incident took place in America, we’re using UK law to analyse this situation to make it more relevant for our readers.

In this situation, there is an employment contract between the workers and the company, so they can’t be classed as volunteers. Instead, the time that they spend on these tasks would still be governed by the terms of their contracts. Typically, volunteers don’t have contracts and therefore can’t seek legal recourse for a breach of employment rights.

However, there’s no law in the UK that states overtime must be paid, so they could be asked to work this extra time for no pay. The exception to this would be if the additional unpaid hours caused their average pay to dip below the National Minimum Wage.

As the employees in this case earned minimum wage, adding these hours to their working week would be illegal. If their contract states that they must be paid overtime, then this would be a breach of contract if not adhered to.


 

How could this have been avoided?

Asking workers to donate their time to a very profitable organisation was misguided, to say the least, and there are several things that HR could have done to prevent this from happening.

In the email, the company cited the upcoming busy period for the distribution centre as the cause of the urgency. This is a pivotal point, as HR should be working to anticipate these busy times and bringing in staff when required.

Seasonal peaks are common in the retail industry and HR can work with other departments to forecast for these. The marketing and facilities departments should be able to indicate increases in sales and new sites that require staff.

By paying more than the minimum wage, Urban Outfitters would also be able to request that staff contribute unpaid overtime. In order to do so, there would need to be significant trust and flexibility offered to staff, to ensure that this exchange is equitable.

CIPD guidance on volunteering is very clear:

It’s important not to blur the distinction between volunteers and paid employees... According to the NCVO, volunteers don’t have a contract of employment and can come and go as they please.

Whilst employers aren’t legally required to pay volunteers, employers should agree to cover any expenses, such as food and drink, as well as any travel the individual undertakes as part of their role.

Not only does this help improve people’s access to opportunities, but it shows that your organisation appreciates volunteer’s time and expense which will help individuals remain engaged and committed.

Finally, before any communications were issued, HR should have investigated the legality of the request and how it would likely be received. They could have asked higher level members of staff to contribute their time, as this would likely be seen as less like the company was preying on their lowest paid members of staff.

 

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Culture Trip’s Culture of Fear

Culture Trip has made the headlines as a valuable resource for intrepid travellers. While their network of articles, recommendations and videos have made them popular with visitors, behind the scenes there’s an entirely different culture.

Tech-based news site WIRED broke a damming editorial, featuring accusations from ex-members of staff. Among the accusations, the common denominator was the actions of CEO and founder Kris Naudts. His staff were feeling the effects of his belittling, insulting and bullying behaviour.

While the company offers wellness benefits, the CEO reportedly berated staff to work longer hours and reveal confidential information about previous employers. On top of this, staff reported high levels of uncertainty, with a staggering staff turnover and seismic shifts in direction at a moment’s notice.

Naudts had also allegedly devalued employees by publicly humiliating them; in one case he reportedly continued to throw crumpled papers at an employee continuously.

Employees also spoke out against his habit of firing their colleagues suddenly, for seemingly arbitrary reasons. 20 colleagues were reportedly suddenly made redundant, with the only communication being a single email citing a variety of reasons for the severance.

During a series of layoffs, HR was only brought on board after a list of names was mistakenly left in a photocopier, prompting widespread speculation as to whether these employees were facing termination.

NDAs were also widely used within the company, to prevent staff from speaking out on their experience with their employer. However, negative reviews have continued to rack up on the company’s Glassdoor page.

Lastly, the pay date of employees was moved from the 28th of the month, to the 5th of the month with just two weeks’ notice. There was no consultation with employees prior to the change, which had a serious impact on their ability to pay their rent and bills.


 

What does the law say?

There are a lot of unpleasant accusations within the expose, but what are the legal implications? Being a bad boss isn’t inherently illegal, but there are legal implications for many of these allegations.

Workplace bullying isn’t against the law, unless it’s on the basis of a protected class such as age, gender, sexuality, religion etc. If the CEO was bullying female employees but not males, then this would be unlawful. Harassment is illegal, without targeting a protected class, and should be tackled swiftly.

The incident of throwing paper at the employee could be seen as violent harassment and would be deemed unlawful. Under the Health and Safety at Work Act, employers have a duty to protect their employees from violence, perpetrated by other employees and external contacts.

On sudden firing and redundancies, there’s a duty for the employer to ensure that these dismissals are fair and warranted. Employers have to show that there’s a valid reason for the dismissal and that they acted reasonably, including fully investigating any issues and acting consistently.

Employees have the right to ask for a written statement, detailing the reason behind their dismissal, if they have completed 2 years’ service. These employees also have the right to appeal their dismissal on the grounds that it is unfair.

Those with under 2 years’ service can still appeal an unlawful dismissal, which would include dismissal on the grounds of disability or requiring maternity leave.

GDPR laws may have been breached by the person that allowed confidential data relating to employees to be circulated by leaving their documents in the photocopier. Any data breach should be reported to the Information Commissioner within 72 hours, and employees should be informed that their data may have been compromised.

Changing the pay date of employees is legal, but only after a consultative process that ends with a change of the employment contract. Otherwise this may be deemed a breach of contract, as it’s a fundamental change to the employment contract.


 

How could this have been avoided?

A strategic HR practitioner should be able to spot all these legal ramifications, but if they are brought in too late there’s little they can do. With more power given to HR, they can push back on these points and ensure that the company isn’t placed in legal peril.

However, managing the relationships between a CEO and HR can be difficult, especially within a start-up. In these organisations, HR can be caught in a battle between the whims of the founder and their legal obligations. While Culture Trip does have wellness initiatives in place, these clearly sit at odds with the culture of the workplace.

This creates a disconnect between the intention of these perks and the way that employees are expected to act. The organisation should be aligned to avoid sending mixed messages; employees can’t feel comfortable using unlimited holidays if they’re being harangued to work overtime regularly.

As well as ensuring the employer meets their legal obligations to consult with employees on changing pay date, they may also advise that employers add perks to the renegotiated contracts and make discretionary funds available too.

Overall, if HR could be involved in these changes earlier and have more power to advise the C-suite, much of this reputational damage could be avoided.

 

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HMV Employee Live Tweets Layoffs

This act of revenge came from inside the HR department, as one professional took to the company’s Twitter account to voice their displeasure over being laid off. The mass firing took place in 2013, in which 60 employees were laid off in a mass exodus.

Over the course of 15 minutes, one anonymous employee told the world about the firing as marketing executives battled to gain access to the Twitter account. The tweets were later deleted, but quick fingered journalists had already screenshotted them.

Normality was eventually restored, but the reputational damage had already been done. This was during a tumultuous time for the brand, which saw layoffs and store closures giving them some serious bad press.


 

What does the law say?

Employee sabotage isn’t unheard of, but the arm of the law only extends so far. Hacking is illegal and carries a prison sentence of up to life imprisonment, but if the employee had been granted access to the twitter account for authorised use, the situation becomes murkier.

Under the Computer Misuse Act, the employee was authorised to use the social media account and had access but chose to use these for unauthorised purposes. While there may be some civil restitution for the company, they are responsible for the data that they share with employees.

As long as the information the employee shared was truthful, this wouldn’t be prosecutable as libel.


 

How could this have been avoided?

It seems that the source of the employee’s chagrin was the unexpected nature of the mass layoffs. While these may have been unavoidable from a business perspective, they should be handled as empathetically as possible.

When delivering news to so many members of staff, HR should still attempt to soften the blow with personal communications and advanced warning. Where possible, employees should be informed on a personal basis, either one-on-one or as a small group. If you plan to do so on an individual basis, make sure that you act fast as the news may travel quicker than you anticipate.

Appreciate that this will be incredibly difficult news for most people and give them support where appropriate. Some employees may be upset or angry, but this may be unavoidable even in the best circumstances.

On the logistical side, you should work with other departments to restrict access to potentially damaging areas of the business. Although, it’s unclear why HR were able to access the company’s social media platform in this case. By limiting access to those that really need it, you can mitigate the risk of details being used maliciously.

IT and HR should work together on off-boarding procedures, closing off access when no longer needed.

 

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Disability Discrimination at Weston Homes

We all know how important it is to handle disability accommodations discretely and effectively in theory, but in practice the reality can be very different. In handling accommodations for an employee with diabetes it was found that Weston Homes erred, and this cost them £14,000 in compensation.

The claimant, Holly Carr, brought allegations of discrimination and harassment which resulted from adjustments required to manage her type 1 diabetes. During a welcome party for Carr in the early days of her employment, she stated that she wouldn’t be drinking alcohol because of the condition.

Carr hadn’t disclosed this during the interview, as she managed the condition to a degree that it would not impact her working life.

Carr then became aware of an email discussion between managers about her condition, which included a joke at her expense. She was asked to check a manager’s email inbox for a message, when she inadvertently came across the comments.

Her line manager asked that she meet with a representative from HR to discuss her condition and reasonable accommodations. The representative noted that Carr’s manager asked detailed questions, which a judge later ruled to be excessive, invasive and heavy-handed.

In her defence, the HR representative stated it was an opportunity to learn about diabetes, but the judge ruled that this was not appropriate.

After this meeting, Carr’s line manager introduced her to first-aiders and immediately including her diabetic status in the introduction. The judge ruled this to be intrusive and likely to cause embarrassment for Carr.

Alongside this behaviour, it was alleged that the manager created scenarios to catch Carr out with regards to her treatment. This led to further feelings of intimidation, which was then deemed to be harassment on medical grounds.

Carr also detailed a situation in which her work was completed later than intended, as she had been unwell due to low blood sugar. Her manager told her not to disclose this to the chairman’s PA, otherwise she would be fired with immediate effect.

Three months after being hired, Carr was summoned to a meeting with an Executive Associate and fired. Carr was unaware of the purpose of the meeting and when asked, was not provided with specific examples of issues with her performance that had led to the firing.


 

What does the law say?

When working with employees with disabilities, reasonable adjustments should be made discreetly. If employers treat employees in a different way to their colleagues due to these adjustments, this can constitute discrimination against a protected class

As noted above bullying in the workplace isn’t illegal, but by targeting Carr because of a medical condition this becomes illegal. Harassing behaviour is also illegal and aggravated due to medical discrimination.

The manager in this case was surprised to find out about the condition, rather than it being disclosed formally, but there’s no obligation for the employee to do so. Employees only have to make employers aware of a disability if they would like to request adjustments.

If they choose to do so, then employers must keep this confidential unless the employee expressly agrees to colleagues being told. This makes the manager’s actions in loudly proclaiming Carr’s illness illegal and harassing.

In order to fire an employee for issues with performance, employers should document specific instances as examples. They should issue warnings and investigate any issues fully, to ensure that the dismissal is fair and justified. Even serious or gross misconduct must be investigated before action is taken. 


 

How could this have been avoided?

While HR was involved in a discussion with the manager and the employee, it seems that they took a more passive role and allowed invasive questions to continue. This would be a situation in which HR should mediate and lead the conversation, rather than allowing the manager to harass the staff member about a sensitive issue.

If HR got the sense that the manager was being adversarial due to the medical issue, then they should have addressed this. They could have warned the manager of the potential outcome of such hostility and trained them in handling medical accommodations more sensitively.

Ideally, HR would also monitor the situation and catch challenging behaviour from the manager. Carr may have felt she couldn’t approach HR after the meeting, as their representative had not stepped in. This kind of incident can have a knock-on effect, as employees don’t have confidence in HR to intervene on their behalf.

With the right support from HR, Carr could have asked for her manager’s actions to be investigated. This would protect Carr and also the organisation, as they could point to evidence of the investigation as due diligence.

A firing shouldn’t come as a surprise for a low performing employee, as they should have had warnings and opportunities to improve upon this. HR should work alongside managers to document issues and plan improvements. 

 

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Arco Environmental’s Unfair Dismissal

Employee Elise Walker undertook employment with Arco Environmental; three weeks after her start date, she informed the business that she was pregnant. This allegedly led to harassment and abusive behaviour from the director and his wife, who also worked within the business.

Walker felt that these members of staff began treating her differently in the wake of this announcement. She alleged that they stopped speaking to her and make derogatory comments about her pregnancy.

She was later invited to a meeting with the managing director of the firm, who then inappropriately questioned whether Walker knew she was expecting when she accepted the job.

The managing director later admitted that there was allusion to Walker taking the job to gain maternity pay from her new employer, rather than her previous employer. Walker previously worked for her husband; it was suggested that she sought employment elsewhere to gain maternity pay from another employer. 

After the meeting, Walker sent a message to her manager stating her commitment to the job and her unhappiness about the content of the meeting. They had a final meeting and then Walker submitted her resignation.

She then brought her case to a tribunal with claims of breach of contract, unfair dismissal, and harassment. She also successfully claimed for failure to supply written particulars of her employment, as she wasn’t given any documentation from the employer. This factor led the tribunal to state that she would receive a higher amount from the claim, as the employer had failed in their basic duties. 


 

What does the law say?

It’s important to note in this case, that even though Walker resigned she did so because of harassing behaviour. This is known as a constructive dismissal, which can then be claimed to be unfair.

Employees generally must have been employed for at least two years to claim unfair dismissal, but Walker was discriminated against and harassed, based on her gender as she was pregnant. This is a protected class which allowed Walker to claim for a shorter period of employment. 

As the employer was aware of and complicit in this harassment, they’re liable to pay damages to the employee.

Failure to give written particulars of employment can be brought to a tribunal, however there’s no financial compensation for this as a standalone charge. The intention of the tribunal is to decide what should be included in these particulars to determine the validity of related claims, rather than setting out punitive damages.

The employment judge did state that this aggravated the situation and would lead to a higher pay-out for the victim in this case.


 

How could this have been avoided?

HR could have intervened in this scenario to ensure that the company was behaving lawfully. The managing director in this case admitted that he was unhappy about the announcement of the pregnancy because of the HR issues that it would cause.

Later, he consulted with an outsourced HR service who gave him further advice. If the company had an HR department, they may have given more in-depth advice and observed the situation more closely.

Ideally, this representative would be present at meetings with the employee to prevent intrusive and potentially harassing questioning. They should also have been working to ensure that all employees are treated well by their colleagues, investigating any issues raised by employees.

HR should also have a full onboarding process, which should include issuing of documents, contracts and job descriptions. This is basic best practice for HR and makes for a compliant, positive employee experience.

Planning for parental leave can seem daunting for employers, but with proper succession planning and internal skills development you can already have an employee ready to step into the role. This removes stress from upper management, as they’re aware of plans that already exist to share the workload.

 

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Diversity Disaster at Pobl Group

This Swansea based housing association hosted an equality and diversity training event for their staff. While this may have been planned with the best of intentions, the outcome was an HR disaster.

Theresa Georges, a cleaner in the company and claimant in the case, attended the training event and was shocked at the way it was conducted.

During the course of the training, the trainer asked members of the audience to shout out offensive words, so she could write them out in full on a flipchart. She further encouraged them to use “the most derogatory and offensive words they could think of”.

As the only person of colour in the room, the claimant felt uncomfortable with the racial epithets being repeated and written down. These offensive terms were clearly discriminatory to people of colour and should not have been repeated in the workplace without mitigating context.

After the training, Georges immediately requested annual leave and did not appear at work the next day. In a call with her line manager, Georges expressed her discomfort with hearing racially charged words at a training event several times the previous day. She then later filed a complaint with the HR department and took sick leave due to stress.

This complaint was investigated by a senior member of the HR team, who found that there was no racial harassment present in the training. Georges appealed the outcome of the investigation, but it was again not upheld. Her next step was to take this to an employment tribunal.

The tribunal unanimously ruled in favour of Georges, condemning the language used within the training session. The employer claimed that the complaint was in retaliation for a fraudulently filled timesheet, which they had reprimanded Georges for. This was not upheld by the tribunal, as they were satisfied with the evidence presented by Georges.


 

What does the law say?

The Equality Act 2010 protects Georges in this case, as the trainer and attendees acted in an unwanted manner based on race. This had the effect of creating an intimidating, hostile, degrading and offensive environment for Georges.

The intention of the trainer to educate is irrelevant, as the tribunal found that the outcome was a racially offensive atmosphere. The trainer failed to give full context as to why the words were used and why a different training method was not used.

The employment tribunal has ruled in a number of similar cases and this precedent was used to inform their decision in this case.


 

How could this have been avoided?

Training on discrimination is important, but this case shows us how important it is that this is handled with care.

Georges felt singled out as the only person of colour in this training, which may also indicate that diversity in recruitment is lacking. It’s possible that if the training team was more diverse, this would have been pointed out as inappropriate from the outset.

Georges voiced her issues with the training, but the result of the investigation was not in her favour. This could have been because the investigator was not well versed in case law, as the cases cited in the tribunal’s decision could have been used as an indicator of whether the training was lawful.

This may be down to a lack of knowledge and experience in the HR department. It’s essential for HR practitioners to look beyond the complaint to the law and recent cases, to get a full view of the appropriate action.

 

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HR have a multitude of tasks when it comes to protecting organisations and employees. In each of these cases, HR could have had a bearing on the outcome and prevented these cases from getting to the tribunal stage.

Sound HR knowledge could be called upon in each of these situations to keep the organisation on the right side of the law.

 


Make sure your HR department’s knowledge is up to scratch; train your teams with CIPD qualifications.