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NOTW Fiasco – What Can Businesses Learn?

The shock closure of the News Of The World and the phone hacking scandal has left many of the British public shocked. The most popular English-language newspaper in the world was published for the last time in July, which has left politicians, News International, The Metropolitan Police, and the NOTW employees battling to find out who is to blame.

Public speculation, police questioning, political debate, and media coverage is certain to go on for the foreseeable future but, in the meantime, there are lessons the business community can learn from the demise of the NOTW.

Leading North-east HR and health & safety firm Empire is encouraging businesses to learn from the NOTW situation, as it could serves as a timely reminder that no business is immune from closure, and very large, successful businesses can be destroyed by the actions of a few employees.

Aberdeen-based firm Empire say it is important that businesses throughout the UK take on board the lessons learnt, and most importantly ensure steps are taken to prevent the same thing happening to them.

Claire Wiltshire, Employment Law Advisor, said: “It’s unlikely that just one person will be blamed for the NOTW crisis. Whilst criminal action may be taken against individuals, the causes of the crisis are likely to be far wider. Business owners, HR managers and employers should be asking themselves whether they are doing all they can to encourage an organisational culture that supports their business in an ethical way.”

Empire has prepared a list of potential learning points for businesses to take in to account:

Organisational culture must not be neglected

Does the culture of your business encourage employees to push the wrong boundaries, go to extremes and turn a blind eye to bad practices? A journalist deleting the voicemail messages of murder victim Millie Dowler is an extreme example of this, but can you be sure that your employees wouldn’t be tempted to break the law if pressurised? In the case of the NOTW, serious questions need to be asked about why journalists felt the need to go to such extremes to get a story. Could the HR department or line managers have prevented this incident by fostering a different organisational culture?

Ethics are important

In an increasingly transparent business community, it is more important than ever to ensure your business is ethical. At the most basic level, customers tend not to want to buy goods from a supplier with questionable ethics. Suppliers may not wish to associate with a business with a poor reputation for ethics, and this was clearly demonstrated when advertisers withdrew from the NOTW. Ethics can be the foundation of a positive organisational culture and the two are closely linked.

Whistleblowing can help a business

A good whistleblowing policy encourages employees to come forward if they become aware of malpractice or breaches of the law. This allows a manager or HR department to be made aware of the issue as early as possible, therefore preventing an escalation. It is likely that the NOTW did have a policy, but employees did not feel able to use it. The importance of encouraging an effective whistleblowing policy was also demonstrated by the recent care home scandal in Bristol, in which a senior nurse broke the silence of abuse of patients, resulting in closure of the home. It is not enough to simply have a policy, it must be circulated and utilised appropriately.

Seek legal advice before announcing redundancies

The NOTW’s 200 employees were collectively advised of their impending redundancies during a staff meeting in the office on the week of the disaster. This potentially breaches several requirements of employment law, namely that they should have been collectively consulted prior to the final decision being made. The Secretary of State must also be notified when there is a proposal to make 20 or more employees redundant. A failure to consult may result in an award of 90 days’ pay to each employee as well as potential unfair dismissal claims.

Transfers may incur TUPE liability

There is speculation that News International will simply start publishing The Sun on a Sunday to replace the NOTW. This could result in what is known as a TUPE transfer, whereby NOTW employees should have their employment protected and transferred. Further details on this are expected in the near future, but the NOTW would be well advised to seek legal advice on this immediately. Businesses must always ensure that advice is sought prior to mergers, buyouts and the sale of businesses in order to avoid unexpected liability for transferred employees.

Be mindful of the Bribery Act 2010

This came into force on 1 July 2011 and establishes four offences relating to bribery and corruption. The NOTW is now facing allegations of bribing police officers, clearly demonstrating the need for regulation. The Act places obligations on businesses to ensure they have robust policies in place to prevent bribery and corruption. No business is exempt from the new Act, so it is advisable to seek legal advice with a view to drawing up the relevant policies now.

If you need guidance and support on HR and employment law issues, contact Empire’s advice line team on 01224 701383 or visit www.empirehr.com

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