Workplace Misconduct and Human Resources

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Wealth giant AMP has found itself embroiled in its own #metoo moment, shedding light on the mishandling of workplace misconduct allegations.

The case, which involves allegations against AMP Capital chief executive Boe Pahari by former AMP employee Julia Szlakowski was in the news again this week, with AMP refusing to release documents pertaining to the internal investigation to Ms Szlakowski lawyers.

AMP's handling of the misconduct charges is a timely example of how not to deal with workplace allegations of this nature and can play an essential role in teaching organisations, and human resource executives, about the importance of HR processes and regulations in dealing with workplace misconduct.

The AMP Workplace Accusations

People often make the mistake of believing that the larger the company, the more money and resources at stake and the greater the implications of a workplace scandal, the more diligent they will be in dealing with workplace misconduct charges.

However, as is seemingly the case with AMP, this is not always so.

After three years of remaining quiet, former AMP employee Julia Szlakowski 'said she was moved to break her silence on the events of 2017 after AMP continued to downplay the behaviour of its new AMP Capital chief executive'.

Ms Szlakowski, an AMP executive at the time, alleges that in 2017 her then-boss, Boe Pahari, insisted she fly to London for a meeting and then accompany him to an exclusive club with a group of his friends from the Ferrari club. Once there, he allegedly insisted she extend her stay in London, but keep the reason for the extension a secret from the company. 

Further to this, he allegedly demanded she accept gifts of clothing, stating that a refusal would be tantamount to 'humiliating' him and accusing him of having a 'limp dick'.

The Workplace Investigation

When Ms Szlakowski brought these allegations to AMP, an internal workplace investigation was launched. The problem was in its approach to the investigation, which ostensibly attempted to sweep the allegations under the carpet, rather than addressing the matter head on to bring about lasting change.

Chief principal at Maurice Blackburn lawyers, Josh Bornstein, who is representing Ms Szlakowski, says the problem lies with the unregulated nature of workplace misconduct investigations within the private sector.

"Workplace investigators act under the radar and in the private sector are not properly regulated," Mr Bornstein said. "Regrettably, over the years I have seen many cases in which organisations have predetermined an outcome and then retain a workplace investigator to deliver it."

This would appear to be the case with AMP, with lead investigator Andrew Burns QC, delivering a report stating the allegations to be 'low level'. AMP penalised Mr Pahari with a 25 per cent reduction in his annual bonus which amounted to $500,000, which was reportedly the same amount paid to Ms Szlakowski to settle the case.

The Fallout

Mr Pahari went on to be promoted to AMP Capital chief executive in late June 2020; however, when the Australian Financial Review later released details of the sexual harassment scandal, staff and shareholders called for action.

Pahari was demoted last week, and chairman David Murray and board director John Fraser both resigned after mounting pressure from investors for accountability around the claims.

While AMP continues to insist this is a one-time event, there are concerns their handling of the allegations may speak to a culture that tolerates and even condones sexual harassment.

Australia's Sex Discrimination Commissioner Kate Jenkins has predicted this scandal will be a watershed moment in sexual harassment cases, with the use of non-disclosure agreements (NDAs) set to become more regulated in the wake of the scandal.

"I notice organisations were more motivated to keep complaints out of the newspapers than they were to stopping sexual harassment. But I feel the tide is turning on that," she said.

The Australian Human Rights Commission is currently working on guidelines for the use of NDAs in the workplace, which will be rolled out after government approval. These changes will include measures that ensure victims of workplace harassment have access to independent advice and are not forced to sign anything while under duress.

While these changes will go some way to helping regulate workplace investigations, it is ultimately up to organisations to create a culture that discourages harassment, discrimination and bullying. With the right HR processes in place, companies can avoid situations like these, which will likely take AMP's brand, and reputation, years, and perhaps decades, to recover from.

At Infinity HR, we help SMEs create people-first cultures that embody your vision and values. Contact Iolanda on 0400 489 743 or email iolanda@infinityhr.com.au for more information.

References:

AMP reels from scandal amid calls for scrutiny of workplace investigations

AMP scandal a 'watershed' moment, says Sex Discrimination Commissioner

'Sexually harassed' AMP executive says the company is still covering up