The Big Four and the #MeToo movement

The Big Four have recently revealed the number of partners who have been let go in the wake of sexual harassment and other bullying allegations. While this demonstrates a genuine move towards transparency in the industry, a year on from #metoo there is still some way to go before firms can honestly say they have harassment free workplaces.

After Deloitte revealed that around 20 partners have been let go in the last four years because of bullying and sexual harassment, PwC (5 partners), EY (5 partners) and KPMG (7 partners) have all followed suit. Other firms outside of the Big Four (including Grant Thornton and BDO) have also disclosed statistics.

What can we learn from the figures published by the major firms, and what has changed in the twelve months since #metoo began?

What is sexual harassment?

The statutory definitions of sexual harassment are set out in the Equality Act 2010. Any unwanted conduct which is of a sexual nature or which relates to sex and which has the purpose or effect of violating someone’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for an individual can amount to harassment. Treating an employee less favourably because they either have submitted to or have rejected unwanted conduct of a sexual nature which has that purpose or effect also amounts to harassment.

A key element of the statutory definitions is the “purpose or effect” wording – even conduct which is not intended to be offensive can amount to harassment. The commonly used “It was just banter” is not an effective defence if a colleague has found behaviour offensive.

What do these statistics tell us?

Whilst they demonstrate a welcome move towards transparency, the numbers released by the Big Four do not provide much meaningful information about the culture within those firms or the scale of any problem. We do not know how many of the partner expulsions are related to sexual harassment (rather than the broader “bullying” referred to); we do not have information about the nature of the allegations; nor do we know how the number of expulsions compares to the number of complaints made during the same period.

What we do know is that more and more employers are actively encouraging people – both victims and bystanders – to speak out about inappropriate behaviour in the workplace. There is no longer an expectation that individuals who have experienced sexual harassment should keep quiet and behaviour that might once have been accepted is now being called out as unacceptable. Firms are more likely to investigate properly and deal with complaints rather than brushing (and hushing) them under the carpet – not least because failure to do so has such potentially damaging reputational consequences.

Speaking out is still incredibly difficult for victims, but developments in technology and social media are facilitating disclosure for those who would struggle to take action single-handedly – take the Ted Baker “forced hugging” scandal which was exposed by way of an anonymous online petition or the Google walkout organised via social media. This is likely to be a growing trend which employers in all sectors should be prepared for.

How should firms treat complaints of sexual harassment?

A complaint of sexual harassment, whether or not it is in writing, is likely to constitute a grievance. Employees may say they want to raise the issue informally or that they do not want any action to be taken – even in those circumstances, it is best practice to carry out a thorough investigation into any allegations of harassment.

In doing so, firms should consider the following:

• Who will carry out the investigation? The investigator should be appropriately senior but must not have been involved, even indirectly, in the allegations. Consider instructing an external investigator, particularly for sensitive or high-profile complaints.
• Ensure proper procedure is followed. Do the internal grievance and disciplinary procedures apply to partners as well as employees, or are there separate procedures in the partnership documentation?
• Should the alleged harasser be suspended? Suspension should not be a knee jerk reaction – rather a last resort having considered all other alternatives. Other changes such as temporary changes to reporting lines may be more appropriate.
• The investigation should be carried out as quickly as possible, particularly if either party is suspended or otherwise out of the office.
• Take care not to over promise on confidentiality. The alleged harasser has a right to know the nature of the allegations against him/her and this will usually involve knowing the identity of the complainant.
• Bear in mind regulatory duties and whether a report needs to be made to the Regulator.

Once the investigation is complete, the Firm will need to consider what, if any, disciplinary action is appropriate in all the circumstances. We have seen clear and welcome indications from the Big Four in their recent statements that inappropriate behaviour will not be tolerated.

Beth Hale is Technical Director at CM Murray LLP, specialising in employment, partnership and discrimination law