#MeToo – The story continues
By Jonathan Iyer, Associate, and Leonie Sheridan, of law firm Lewis Silkin’s Professional Services team.
As former employees of Harvey Weinstein take to the stand at his criminal trial in New York, this is an appropriate time to take stock of what has happened on this side of the pond, and examine how accountancy firms have been tackling the ongoing issue of sexual harassment at work.
The #MeToo and #TimesUp movements generated wave after wave of scandal, which swept across multiple sectors from entertainment to finance and accountancy, often involving very senior staff. As a law firm that specialises in employment law and related investigations, we have continued to see allegations being raised in professional services firms. We have also seen firms seeking advice on what steps they should be taking to demonstrate their commitment to achieving a workplace free from harassment.
In May 2018, we asked if accountancy was next for the #metoo movement and wrote about the steps firms should be taking. Later that year, we discussed the role of settlement agreements in the context of allegations of sexual harassment.
The use of NDAs to prevent employees from reporting allegations of sexual harassment has continued to be a key issue for professional services firms. In 2018, the Financial Reporting Council (FRC) faced political rebuke for failing to be transparent about sexual misconduct in the industry according to the FT, following news that 37 audit partners had been forced out of the Big Four over bullying and harassment allegations since 2014. This triggered the FRC to crack down on the hushing up of complaints in July 2019, as it ordered the six largest audit firms to disclose all complaints of bullying and harassment made against senior staff. This was the first time the FRC had required firms to divulge details about internal investigations into the personal behaviour of their partners and directors.
In October 2019, the Equality and Human Rights Commission (EHRC) announced it was “calling time on NDAs” as it published best practice guidance on the use of confidentiality clauses in employment contracts and settlement agreements. This followed a government announcement that it would introduce legislation to regulate NDAs including, amongst other things, a new requirement for NDAs to make clear that employees can make disclosures to the police, doctors, and lawyers (although these requirements are not yet in force).
Since the FRC order, accountancy firms have been quick to announce steps to prevent sexual harassment and misconduct. Over the recent festive period, many firms introduced policies on alcohol consumption, with “sober chaperones” being appointed in a number of firms. In the past few weeks EY has announced that it is launching “belonging” workshops after a string of complaints about discrimination and inappropriate behaviour.
However, questions remain over whether more should be done. This is a good time for firms to be benchmarking their approach to see if it still reflects best practice. Last month, the EHRC published some detailed and weighty guidance on sexual harassment and harassment at work which is a good place to start.
The EHRC guidance is not legally binding, but it can be taken into account by employment tribunals and we also anticipate that it will lay the groundwork for a new statutory code of conduct. It gives detailed recommendations on steps employers should consider taking. The guidance firmly puts the onus on employers to take more pro-active steps to manage sexual harassment at work. It recommends that firms should proactively look out for any warning signs of sexual harassment, understand any power imbalances within the organisation and carry out regular staff feedback surveys. The guidance also states that firms should carry out sexual harassment risk assessments, and should consider setting up online reporting systems and even publish their anti-harassment policies on their external websites. Importantly, the guidance suggests that, as well as investigating current complaints, firms should investigate complaints about historic sexual harassment and misconduct and should not assume that a matter is unworthy of investigation simply because it took place a long time ago.
In anticipation of a new statutory code of practice, accountancy firms should act now to review and, where necessary, change their practice. Firms should also ensure that all managers and staff are properly trained in what constitutes harassment and what to do when the line is crossed.
They could also consider introducing an internal ‘guardians’ initiative, which involves designating and training employees to act as a ‘go to’ for confidential concerns about workplace issues, including sexual harassment. We (at Lewis Silkin) helped the The Old Vic Theatre set up its Guardians programme which has since been implemented by a range of organisations from all sectors – including the UK parliament which has just announced that it will implement the Guardians programme. Similar initiatives are being set up by firms across a whole range of sectors, and accountancy firms should consider if they might benefit too.