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French restructuring shows potentially deadly toll of poor management practices

4 July 2018

The former chief executive of France Telecom, as well as six other executives, will stand trial for the suicides of about 60 workers.

In 2006, France Telecom announced plans to restructure the business in an effort to modernise. Over three years, 22,000 workers would be made redundant and another 14,000 would be moved and retrained.

At the same time 6000 younger, more tech-savvy recruits would be hired. The chief executive reportedly said "I'll get them out one way or another, through the window or through the door." This statement was a disturbing foreshadowing of what was to come.

A 32-year-old employee threw herself out the Paris office window after emailing her father a suicide note. Another woman tried to kill herself when she learnt she was being transferred for the third time that year. One worker burned himself alive in the company carpark in Merignac. Another stabbed himself repeatedly in the stomach when he was transferred again.

A technician in Marseille left a note saying "management by terror" had driven him over the edge. "I am committing suicide because of my work at France Telecom. That's the only reason." Despite this, France Telecom has maintained the suicides were caused by personal issues, not work.

In France the workforce is highly unionised and labour laws so robust that it is incredibly hard to dismiss an employee. Instead, a practice called "being sent to the closet" has developed. The employer makes the worker's work life so miserable they quit.

It is asserted France Telecom used this strategy to speed up job losses. The prosecutor in the case says 4000 France Telecom executives were trained each year to "make people move" by exerting maximum pressure. Executives reportedly received bonuses proportionate to the number of workers they forced out.

Methods included assigning working mothers to jobs two hours from their homes and ordering workers to carry out duties for which they were not trained.

Although reported numbers vary, in all around 60 workers took their own lives over a three year period. Many others attempted suicide or suffered from depressive illnesses.

Virtually all restructures are inherently stressful; however the extreme example of France Telecom goes far beyond the usual stresses of a restructure.

New Zealand businesses and organisations are regularly restructured. Interestingly, Spark, is carrying out a restructure which affects 40 per cent of staff. Thankfully the fallout and stress of restructuring in New Zealand is almost always far less severe than the case of France Telecom.

In New Zealand, restructuring businesses are bound by strong good faith obligations intended to minimise the stress caused to workers. Employers must provide all affected employees with all relevant information and consult with then. The proposed changes should be put to staff in a proposal document which sets out the business case for the changes.

No decisions should be made until employees have been given a reasonable chance to give feedback and that feedback has been genuinely considered.

In 2009, Massey University in Palmerston North carried out a restructure. Two senior lecturers, Martin Wrigley and Terry Kelly, were made redundant. They had been given significant information about the restructure, the new roles, the selection criteria for who would be appointed to new roles, who would be on the interview panel, and so forth.

Despite this, Wrigley and Kelly took a claim to the Employment Court that they had not received all relevant information, most notably the notes taken by the interview panellists, each candidate's assessment sheet, and the document comparing all the candidates.

The full Employment Court decided the documents were directly relevant to Massey's decision to dismiss Wrigley and Kelly and appoint other candidates. As such, that information should have been provided to Wrigley and Kelly for comment.

The court also emphasised the importance of New Zealand's restructure requirements.

Involving and informing employees promotes better decision-making by employers and greater understanding of those decisions by employees. This should reduce the harm to employees and accordingly the likelihood of personal grievances being raised.

Unfortunately, even when a restructure is managed well and clearly communicated, workers may still experience stress. Harmful workplace stress is a recognised health and safety risk. Does responsibility for preventing stress lie with the business or workers?

New Zealand legislation requires workers to take reasonable care for their own health and safety. The business must ensure the health and safety of workers and provide a risk-free workplace, so far as is reasonably practicable. So while the business is primarily responsible for health and safety, including stress, the business cannot reasonably ensure workers experience no stress.

The business should follow best practice, comply with legal requirements, and offer support and counselling. If the business meets its obligations but a worker still suffers stress, the worker must manage it themselves.

France Telecom engaged in behaviour that clearly caused stress to workers, resulting in significant harm. This behaviour would be a clear breach of New Zealand's health and safety law.

Since New Zealand's health and safety laws have been revamped, it is an offence to breach health and safety duties. Unfortunately, executives have at times not been held accountable personally for their actions where they have caused death.

Police recently decided not to prosecute anyone for the CTV building which collapsed, killing 115 people, in the 2011 Canterbury earthquake. Police said there wasn't a reasonable chance of conviction. In light of this, Justice Minister Andrew Little isconsidering whether an offence of "corporate manslaughter" should be introduced.

Other countries, including Australia, the United Kingdom, and Canada, have a corporate manslaughter offence to hold senior executives personally accountable for deaths caused by their corporation.

Does New Zealand need a corporate manslaughter offence? Should France Telecom executives be held accountable?

The French government is considering changing their labour laws. Whether this will help prevent such tragic loss of life remains to be seen, but clearly something needs to change.

Cullen - The Employment Law Firm was one of the first eleven law firms in New Zealand approved to provide employment law services to Government and the public sector.

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