Dealing with sexual harassment at the workplace: Lessons from the EY episode

EY decided to let off an employee accused of sexual harassment with just a fine. Here is what HR leaders feel about the episode

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One of the world’s leading professional service providers, Ernst and Young (EY), earned heavy criticism, both internally and externally, when it decided to retain an experienced professional even after he was found guilty of sexual harassment at the workplace.

A disciplinary committee looking into the matter, found that Neil Hutt, a transactions partner for the company, had behaved in an “obscene and aggressive” manner during an annual company skiing trip. Hutt had passed sexually inappropriate comments at a junior woman employee.

His vulgar comments addressed to the junior female colleague “amounted to an abuse of his position and power,” said Rosalind Wright QC, a retired barrister working mainly for the public and regulatory sector.

After the verdict, instead of terminating Hutt, the Company fined him a sum of £75,000. During the internal company investigation, Hutt remarked that he had “taken a joke too far.” After he agreed to attend a training on diversity and inclusiveness, EY allowed Hutt to continue in his position!

“Basically, this person must have been giving a lot of value to the firm, that’s why they must have taken the ‘fine’ route. However, imposing a fine doesn’t seem to be a wise move on the Company’s part”

Emmanuel David, former director, TMTC

That is not all. The Institute of Chartered Accountants in England and Wales (ICAEW) deemed there would be no risk of Hutt repeating his behaviour and fined him £11,900 without removing him from the professional register!

Hutt, however, resigned from the job immediately after the report became public.

Employees at EY are definitely not happy with the way the Company has dealt with the issue, claiming that EY only focussed on keeping away bad press and not in the interest of the employees.

“Fine is not Fine”

Emmanuel David, former director, TMTC, opines on why the firm might have resorted to fining the pepetrator rather than terminating his employment. “Basically, this person must have been giving a lot of value to the firm, that’s why they must have taken the ‘fine’ route. However, imposing a fine doesn’t seem to be a wise move on the Company’s part,” he says.

David enunciates that the firm looked at it as an event, whereas the employees looked at it as a reflection of the organisation’s culture. “However, the transaction doesn’t end because there is a feeling of retribution. Thanks to incidents like these, employees would most definitely be apprehensive of their Company’s culture moving forth. The higher-ups need to look beyond, as a transaction or event, and consider it a reflection of the company’s culture,” says David.

This is not the first time that EY, one of the Big 4, has dealt with sexual harassment charges from within the company.

The accounting giant has told staff that it will do more to tackle inappropriate behaviour at the workplace. It has also said that it would review its disciplinary process It plans to set up an anonymous feedback channel for employees to escalate any harassment matter to the higher-ups.

“Any woman professional would be scared to work with a company where the senior executives appear to get away with misuse of their position and power”

Manish Majumdar, former head-HR, CoE, Novo Nordisk

“The Company needs to look at it from a more holistic perspective. The goal here should be to champion respect for gender at the workplace. If it is just the prevention of acts of sexual harassment at the workplace, then a fine is okay. The fine basically puts a price tag on the act,” explains David.

“Economically hurting somebody may act as a deterrent and prevent them from repeating such offences in the future. But, employees seek psychological safety at the workplace, which a fine will definitely not ensure,” clarifies David.

Opining on how to build a more hospitable work culture, David cites an example from one of his previous tenures, when he was CHRO for Voltas. He recalls how he was tasked with implementing changes to the company’s culture so that incidences of workplace harassment could be avoided. David explains that men and women in any organisation need to come together for business transactions and we need to ensure that they are effective in their work. Therefore, we need to clearly demarcate the do’s and don’ts of behaviour. To determine this, they had invited the opinion of the women employees on what is ‘respect’ and ‘disrespect’. Accordingly, codes of conduct were mandated at the workplace.

David re-emphasises that companies need to act with haste when such cases arise, in order to set the right example.

Disastrous for EY

Manish Majumdar, former head-HR, CoE, Novo Nordisk, says that the way the whole case has played out is disastrous for EY. He is, however, not surprised that such an incident has happened at one of the Big 4 companies, which he says has had its fair share for such cases over the years. “From an HR perspective, imposing a fine is clearly the wrong thing to do. This only signals that the company values business contribution more than behaviour with colleagues, and hence, paints a negative picture of the overall work environment,” Majumdar says.

“No matter how important one is to the company’s balance sheet, one’d still be accountable for one’s actions at the workplace. Therefore, the point to be driven home is that suitable action will be taken against anyone found guilty, irrespective of their contribution to the company’s balance sheet. If that message is not conveyed clearly, then one is only creating an inhospitable work culture for a diverse workforce,” he points out.

Such incidents tarnish the image of the company and also render the company unsuitable for women professionals. After all, those in higher positions could misuse their power within the company and get away with their misdeeds. “Any woman professional would be scared to work with a company where the senior executives appear to get away with misuse of their position and power,” he says.

The woman who was harassed, was a trainee, who described the internal investigation process — which took place one month after the incident — as ‘uncomfortable and embarrassing’. She was apparently forced to repeat Hutt’s remarks to senior EY colleagues.

The investigation panel discovered that the “increasing rumours around the office had left her feeling isolated. Publicity about the incident had significantly increased her embarrassment and shame to the extent that she had found it difficult coming in to work.” This, in Majumdar’s view, is reflective of a biased investigation, where the Company was inherently trying to retain the senior employee by breaking the victim’s case.

“Asking repetitive questions to try to break down the employee who would then recant from their story, is just a way of safeguarding the person in power. It is indicative of an investigation based on inherent bias. The primary aim of protecting the person who is valuable to the balance sheet becomes more apparent,” Majumdar exclaims.

Hutt only resigned after the matter went viral, which happened about five months after the incident took place. This shows that he only let go because of the public pressure that the Company may face.

“POSH investigation is delicate and sensitivity must always be maintained towards the person who is alleging sexual harassment. A neutral perspective is required. Cornering the victim is a clear indication of whom one wants to protect, and hence, retain in the workforce. From an HR perspective, as long as the perpetrators are protected, they only end up being more reckless and bold, as they know they can get away with just anything. This does not deter such behaviour,” asserts Majumdar.

In conclusion, Majumdar says that the way EY dealt with the whole ordeal is disastrous for its reputation as an employer.

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