Morale Plummets at Firms Amid Redundancies and Efforts to Silence Departing Staff

It’s been a trying time for staff at firms with redundancies, affecting morale as layoffs mount amid an effort to silence dissent in the ranks for those departing.

Last month, the Financial Times reported that PwC had launched a round of “silent layoffs” in the U.K. Affected staff had to stick to a “suggested wording” if they wanted to send colleagues goodbye messages, while any mention of why they were actually leaving needed to be strictly omitted.

Staff who were offered a package to leave were notified individually and informed they must not tell other staff if they accept the offer, according to the FT. Additionally, FT reported they were told to follow a script provided by human resources extolling the benefits of working at the firm and the opportunities ahead if they wanted to send goodbye notes to colleagues.

In guidance sent to affected employees, PwC said “naturally” any goodbye message “must … not be derogatory to PwC or its employees/partners. It is down to business discretion as to when this message can be sent out and if the business wishes to review messages before they are sent out.”

Unfortunately, some employees at PwC did not feel like keeping quiet, and predictably leaked everything, including to the press.

The firm’s approach received a mixed response, particularly on websites where employees can confidentially discuss employers’ actions. One respondent called it “egregious behavior,” while another said PwC was “taking the severance package hostage and demanding employees agree to their silly requirements.”

Liz Sebag-Montefiore, co-founder and director of HR consultancy 10Eighty, believes PwC’s approach has been a serious misfire that has made the firm “look much worse as both an employer and leader.”

“People don’t like this approach: they don’t want to lie to colleagues, they don’t see why they should when they are carrying the can for what they see as poor decisions made by their leadership. They feel alienated and resentful, as though their displacement is being minimized and discounted. It’s not a good look,” she said.

Some have questioned why any firm would need to be quiet about asking people if they wanted to take a (presumably generous) severance offer rather than face a cull since redundancy is an accepted part of working life?

Others, however, see the actions as legitimate practice. “I think it’s reasonable for a company to offer compensation to an employee they are terminating in exchange for that employee not bashing the firm on their way out,” said one commentator.

Whatever one might think of the practice, however, U.K. law allows it.

Louise Taft, employment consultant at law firm Jurit, said it is not unusual for companies’ voluntary redundancy agreements to include non-disclosure agreements (NDAs).

“The Big Four have endured a tumultuous year and it is not surprising to see PwC include an NDA and guidance to those being made redundant as part of their voluntary redundancy process. In fact, many companies do this, both to protect their brand and wider perception in the market, as well as to retain talent,” Taft said.

“While it can look Draconian, by ensuring that those benefitting from a redundancy payout cannot tell their colleagues why they are leaving or what payment they have received, companies like PwC can ensure that their workforce isn’t adversely disrupted,” she added.

Fiona Morgan, head of employment at Arbor Law, said that used wisely, confidentiality and non-disparagement clauses can benefit both employees and employers, as they can provide clarity and comfort in what will and will not be said about the other in any given situation.

In redundancies, however, “there is virtually no benefit in companies seeking to gag employees from disclosing their reasons for leaving,” she said.

“Businesses should assess each employee’s individual situation rather than seeking to impose the same blanket confidentiality clauses in all settlement deals,” Morgan added.

By fLEXI tEAM