Empire is encouraging businesses to learn from the NOTW situation, as it 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.
In light of the closure Empire has compiled a list of potential learning points for other businesses to take into account. Over a series of blog posts we will highlight the issues that we feel are important to consider.
Last week we discussed issues concerning Whistle-blowing and Organisational Culture. This week we look at further pointers that should be learned from the NOTW shock closure.
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.
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.
HEALTH & SAFETY
THE DAMAGES (Scotland) ACT 2011
This new act has been introduced to end the long legal battles in pursuit of agreement over damages claims altering the way Scottish courts will now award damages following fatal accidents.
A fixed percentage of 75% of the net income will now be used as the basis for calculating the loss of support entitlement for dependants of the deceased, applicable in all cases except where a court considers that it would result in a ‘manifestly and materially unfair result’.
Furthermore, a spouse’s income will be disregarded when calculating the amount of damages to be paid.
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