News
When tough management crosses the line
First published in The Independent, 14 May 2008.
We hear it all the time – especially in relation to sport:
"Youngsters these days don't have enough respect for authority. The problem with [insert the name of your favourite sporting team] is that the coach doesn't rule with an iron fist."
There appears to be a perception that a tough management style may not only be acceptable in our society but even desirable in particular situations.
A tough management style in a workplace can, however, lead to problems and, ultimately, legal exposure for an employer. A recent decision from the United Kingdom illustrates how things can go wrong.
The appellant in Parsons v Bristol Street Fourth Investments Limited [2008] UKEAT 581 was a sales executive in a car dealership. The dealership was underperforming and the owner thought that the right tonic would be to hire a new manager – with a new management style.
The new manager, a Mr Lawrence, had a reputation as being tough and uncompromising. He had previous experience in the motor industry and had, in fact, previously managed Parsons.
Lawrence's reputation proved to be accurate. He introduced a new style of leadership to which Parsons objected – and which ultimately caused Parsons to resign from his job.
Parsons complained that Lawrence used foul language, and he gave nicknames to staff members in a manner intended to demean and humiliate them.
Parsons, an older member of staff, was referred to variously as "the old parsonage", "old buzzard" and "old git". Two other sales executives who had been unfortunate enough to have been disqualified from driving were referred to as "the bus pass".
For his part, Lawrence accepted that he regularly used "industrial language" but that he applied this management style to all staff equally.
In other words, Lawrence argued that his abuse was dolled out on an egalitarian basis.
Parsons also complained of some odd instances of what he described as "dangerous behaviour". Lawrence apparently condoned the use of an air gun in the workplace (presumably as part of his management style). In addition, Parsons said that a mini motorbike and go-cart were operated in the workplace in a dangerous fashion.
Parsons said that the last straw which prompted his resignation was an incident in which Lawrence arranged a mock inspection of the workplace by a trading standards inspector. The inspection gave rise to a concern that a real inspection would find the operation to be wanting in certain key respects. That led to Lawrence calling the sales team together and addressing them in terms which the judge described as the "hair dryer" treatment – reminiscent of the style that a football manager might take to an underperforming side.
Parsons resigned, stating in his resignation letter that he had been forced to do so as a result of Lawrence's managerial style, which he said had constituted physical and mental abuse and harassment. In response, Lawrence refuted Parsons' charges and said " I make no apology for the change in regime."
Constructive dismissal claims are, by their nature, often difficult to establish. A claimant is required to show that he or she had no reasonable option other than to resign from employment.
As may be self-evident, any breaches which led to resignation must be sufficiently significant to fatally wound the employment relationship. The claimant must show that he or she was not being hyper-sensitive in responding to the challenges in the workplace – and that any reasonable person would have similarly acted to get out of the environment.
In this case, the Employment Appeal Tribunal found that Lawrence's conduct was "likely to destroy the employment relationship." In other words, the court held that Lawrence's management style went beyond that which would be considered reasonable in the eyes of the law.
It is likely that a similar result would be generated under New Zealand law. It is accepted that a manager may adopt a "tough" management style. Indeed, depending upon the particular workplace and the issues faced by it, an uncompromising style requiring the highest standards of performance may be quite acceptable.
What took this case across the line, however, was the nature and detail of the personal abuse that accompanied the manager's style. It was unnecessary and unreasonable, and caused the court to find that Parsons had been acting as a reasonable employee in resigning from his job.
