company shady behaviour?
Discussion
if a company sacks a number of people (not redundancy) and then shortly after announces it has secured a load of external funding from an investor... in what less than above-board ways could those things have been related? Possibly the investor insisted upon some cost-cutting as a condition? Or?
Monkeylegend said:
What level of employees are we talking about and what reasons were given for dismissal?
If it is at a relatively senior level maybe they want to put in their own people and avoid having to pay redundancy.
Is this one of those "friends" threads ?
mid-senior and above, and director level. May also apply to others, but i am aware of a few. If it is at a relatively senior level maybe they want to put in their own people and avoid having to pay redundancy.
Is this one of those "friends" threads ?
Blown2CV said:
if a company sacks a number of people (not redundancy) and then shortly after announces it has secured a load of external funding from an investor... in what less than above-board ways could those things have been related? Possibly the investor insisted upon some cost-cutting as a condition? Or?
Quite common to have cuts to improve the apparent profitability prior to investment or sale, even if it is short-sighted.Blown2CV said:
Monkeylegend said:
What level of employees are we talking about and what reasons were given for dismissal?
If it is at a relatively senior level maybe they want to put in their own people and avoid having to pay redundancy.
Is this one of those "friends" threads ?
mid-senior and above, and director level. May also apply to others, but i am aware of a few. If it is at a relatively senior level maybe they want to put in their own people and avoid having to pay redundancy.
Is this one of those "friends" threads ?
Clearly they hope to minimise the cost of doing so.
Is it a foreign investor?
anonymous said:
[redacted]
I think this is the key question here.The only thing I can think of is if the company offloaded a chunk of overhead in order to portray a healthier financial position than might otherwise have been the case. But even this isn't really 'shady' and in any case, no investor makes a decision in what appears to be a short space of time. They will have done their due diligence and it's most likely this that deemed the need for some to go.
Shady tends to relate to things where an insider works in cahoots with the investor to manipulate things to their favour in return for off-book gratuities.
Just because it isn't illegal doesn't mean it isn't very unethical. 'Shady' as in telling these people that they're not a good fit for their roles and sacking them, so they now have a dismissal on their record, and have been basically lied to? From what I can gather the investment is an equity sale, so maybe the company financials were in fairly dire straits and the investment was a lifeline... not sure.
Blown2CV said:
Just because it isn't illegal doesn't mean it isn't very unethical. 'Shady' as in telling these people that they're not a good fit for their roles and sacking them, so they now have a dismissal on their record, and have been basically lied to? From what I can gather the investment is an equity sale, so maybe the company financials were in fairly dire straits and the investment was a lifeline... not sure.
Yes, it might be unethical but that's distinct from the law. But to your last point, I assume they made them redundant, rather than 'sacked them'?Blown2CV said:
Just because it isn't illegal doesn't mean it isn't very unethical. 'Shady' as in telling these people that they're not a good fit for their roles and sacking them, so they now have a dismissal on their record, and have been basically lied to? From what I can gather the investment is an equity sale, so maybe the company financials were in fairly dire straits and the investment was a lifeline... not sure.
They don't have a "dismissal" on their record. Restructuring is common and easily explained. They haven't necessarily been lied to as they were presumably hired up to 2 years before the current investment?Maybe the investors looked at various metrics and found them to be out of line with the industry/sector averages?
Blown2CV said:
Just because it isn't illegal doesn't mean it isn't very unethical. 'Shady' as in telling these people that they're not a good fit for their roles and sacking them, so they now have a dismissal on their record, and have been basically lied to? From what I can gather the investment is an equity sale, so maybe the company financials were in fairly dire straits and the investment was a lifeline... not sure.
When you say "sacking" them, have they been dismissed for Gross Misconduct? Or just simply given their notice?It may well be a case of getting rid of senior management so that an investor can "insert" some of their own people...
The existence of the new investor is largely irrelevant.
The question is whether the dismissals (and/or redundancies) were properly handled by the company and appropriate compensation paid, where applicable. In most cases the termination will be documented as "by mutual agreement" precisely to avoid any stigma of "termination for misconduct". The employees concerned will hopefully have included the availability of appropriate references as part of that agreement.
The question is whether the dismissals (and/or redundancies) were properly handled by the company and appropriate compensation paid, where applicable. In most cases the termination will be documented as "by mutual agreement" precisely to avoid any stigma of "termination for misconduct". The employees concerned will hopefully have included the availability of appropriate references as part of that agreement.
CharlesElliott said:
Blown2CV said:
Just because it isn't illegal doesn't mean it isn't very unethical. 'Shady' as in telling these people that they're not a good fit for their roles and sacking them, so they now have a dismissal on their record, and have been basically lied to? From what I can gather the investment is an equity sale, so maybe the company financials were in fairly dire straits and the investment was a lifeline... not sure.
Yes, it might be unethical but that's distinct from the law. But to your last point, I assume they made them redundant, rather than 'sacked them'?vaud said:
Blown2CV said:
Just because it isn't illegal doesn't mean it isn't very unethical. 'Shady' as in telling these people that they're not a good fit for their roles and sacking them, so they now have a dismissal on their record, and have been basically lied to? From what I can gather the investment is an equity sale, so maybe the company financials were in fairly dire straits and the investment was a lifeline... not sure.
They don't have a "dismissal" on their record. Restructuring is common and easily explained. They haven't necessarily been lied to as they were presumably hired up to 2 years before the current investment?Maybe the investors looked at various metrics and found them to be out of line with the industry/sector averages?
Panamax said:
The existence of the new investor is largely irrelevant.
The question is whether the dismissals (and/or redundancies) were properly handled by the company and appropriate compensation paid, where applicable. In most cases the termination will be documented as "by mutual agreement" precisely to avoid any stigma of "termination for misconduct". The employees concerned will hopefully have included the availability of appropriate references as part of that agreement.
The existence of the investor may have pushed this situation into being, and given it the urgency which resulted in improper process being followed. I can't speak for all impacted, but it wasn't by mutual agreement. It was given notice and paid in lieu of, FO by the end of the day. They have offered to give proper references. The question is whether the dismissals (and/or redundancies) were properly handled by the company and appropriate compensation paid, where applicable. In most cases the termination will be documented as "by mutual agreement" precisely to avoid any stigma of "termination for misconduct". The employees concerned will hopefully have included the availability of appropriate references as part of that agreement.
Jasandjules said:
Blown2CV said:
Just because it isn't illegal doesn't mean it isn't very unethical. 'Shady' as in telling these people that they're not a good fit for their roles and sacking them, so they now have a dismissal on their record, and have been basically lied to? From what I can gather the investment is an equity sale, so maybe the company financials were in fairly dire straits and the investment was a lifeline... not sure.
When you say "sacking" them, have they been dismissed for Gross Misconduct? Or just simply given their notice?It may well be a case of getting rid of senior management so that an investor can "insert" some of their own people...
Under a law known as "TUPE", incoming investors can in certain situations inherit all of the existing staff and take on liability for their employment so in practice, what often happens is that the company will try to get rid of dead wood and troublemakers to avoid liability passing to the potential new owner. If those staff have under 2 years' service, they typically have little recourse (as they don't have unfair dismissal rights) but if the dismissal is because of the transfer, there may potentially be claims that could be pursued.
What is lawful and what is ethically right are often completely different concepts. If it is yourself that has been affected I would suggest instructing a specialist employment lawyer to review the situation and advise on what claims you may have.
ETA bear in mind that most employment claims are subject to a strict 3 month limitation window so if you don't take certain steps within that timeframe you generally lose all rights to sue.
Edited by R56Cooper on Monday 13th June 14:04
Blown2CV said:
it wasn't by mutual agreement. It was given notice and paid in lieu of, FO by the end of the day. They have offered to give proper references.
In all honesty that sounds like "job done". Uncomfortable for the people involved but they probably have no recourse unless they can roll out the good old racism, sexism, maternity, disability cards.Panamax said:
Blown2CV said:
it wasn't by mutual agreement. It was given notice and paid in lieu of, FO by the end of the day. They have offered to give proper references.
In all honesty that sounds like "job done". Uncomfortable for the people involved but they probably have no recourse unless they can roll out the good old racism, sexism, maternity, disability cards.Largechris said:
They don't have a choice about references - they have to give them.
https://www.gov.uk/work-referenceAn employer doesn’t usually have to give a work reference - but if they do, it must be fair and accurate. Workers may be able to challenge a reference they think is unfair or misleading.
Employers must give a reference if:
there was a written agreement to do so
they’re in a regulated industry, like financial services
If they give a reference it:
must be fair and accurate - and can include details about workers’ performance and if they were sacked
can be brief - such as job title, salary and when the worker was employed
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