Nortel Insider – by Desk Jockey

The view from one Desk Jockey

Nortel Executives again display their Machiavellian leanings

with 7 comments

Remember all that talk about Nortel’s “greatest asset being its people?” Well this week we found out once and for all that Nortel management does not share this view.

In their latest example of “the ends justify the means” actions Nortel management has apparently chosen to break the law and pay the fine instead of treating UK employees with the respect they deserve, simply because this option benefits management more!

The issue stems from the lack of a “90 day consultation period” which is the same as a notice period. Instead these employees, some of whom had been with the company for many years, were given 2 hours to pack up and get out. While Nortel has been doing this in North America ever since filing for Ch.11 over in North America they are allowed to do so while under Ch.11 protection.

In the UK it is a different story. Even while under Administration certain rules apply when laying off many employees one of which is that employees be given a 90 day consultation or notice period. However the fine for breaking this law is a mere £5000, much cheaper than actually having to follow the law and give employees the proper consultation period!

If Nortel management really cared about their employees they would follow the law. But we know that isn’t the case as demonstrated from previous incidents and so perhaps it wasn’t surprising that they decided to deliberately break the law and just opt to pay the measly £5000 fine instead!

This is yet another in a long line of incidents where Nortel has demonstrated contempt for those very employees that helped build company that they eventually destroyed. Even after you are laid off their game does not end there. Nortel HR in the US has been using questionable methods in order to trick laid off employees into signing away their right to severance by making some vague promise of allowing pensions to be accessed quicker. They are able to do this because they know the fragile financial position many employees are in. Instead of helping out in this situation they choose to exploit it for their own benefit. Their aim is to make sure as many employees sign away their right to severance as possible, so that the chances of them disrupting the Ch.11 proceedings are reduced.

It is also not surprising that they decided to hide behind their consultants to let them take care of the whole matter. This time they are using E&Y to deliver the layoff news because they don’t have the decency or respect to tell the employees themselves.

Written by Desk Jockey

April 6, 2009 at 6:02 pm

Posted in Uncategorized

Tagged with , ,

7 Responses

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  1. I was one of those “let go” in the UK, I won’t call it redundancy as you normally get some kind of cash compensation for all the years of hard work you put in. I find it amazing that with all the ethics compliance that has been shoved down our throats for so many years, that Nortel and E&Y are breaking UK law to save a few pounds for the execs bonuses. I was amazed that even Ashley Saunders (Head of UK Ops) would go along with this, but he was in the very meeting where I was fired and didn’t say a word. Mr Saunders you’re a disgrace to Nortel and to the employees that work for you.

    In the past,it was only the execs that ever broke the ethics code, not the rank and file employees who actually keep the day to day operation running, these workers are ethically superior than any senior manager or exec in this sinking ship. It’s a sad day for a once great company called Nortel that they have to go to these lengths!!!

    Formerly Nortel

    April 7, 2009 at 6:49 am

  2. Unfortunately, it seems that Nortel took this path, because under the administration period it is protected from paying any liabilities. therefore, while breaking the law and there commitment to the employees should potentially put them in a position that they have to pay fine to the government and if sued, pay the employees as well, during the administration period they practically have only to pay the fine, and any claim from the employees will have to queue with all the creditors.
    however, I would think that E&Y, as the administrators of the company, should have prevented this situation (they are after all, accounting company and obligated to keep the law). now E&Y, not like Nortel, are not under administration and, I would like to believe, should be liable as well.

    Future ex-nortel

    April 7, 2009 at 7:52 am

  3. The question was asked directly to E&Y during the meeting if they knew they were breaking the law in proceeding the way they did. The answer was “yes”.

    Ethics compliance only became a big thing in Nortel after the executives of US companies were brought to court and sentenced and the US government passed a bill to hold execs accountable for the information contained in the financial results of their companies: it was meant to protect our exec’s behind by diverting the accountability to the mass.

    From Mike Z taking a raise of 20-odd percent based on “the average performance of the industry” while the company was going down to cleverly orchestrating a bankrupcy filling to avoid paying severance packages, it is clear that “ethics compliance” was only another business tactic.

    There is something cynical about Nortel using the law to protect itself from creditors on one hand and willingly breaking it when it judges the consequences acceptable on the other.


    April 7, 2009 at 8:02 am

  4. While I certainly don’t agree with Nortel UK’s tactics in this matter, one must also wonder why the British government only imposes a measly £5000 fine? The fine, too, is only paying lip-service to the plight of terminated employees. Perhaps if it were £5000 per un-notified employee it would carry more weight.

    Canadian Norteler

    April 7, 2009 at 10:34 am

  5. This latest action does not surprise me at all.
    When Nortel collapses, no one in their right mind would rehire anyone of these losers in the executive offices. They are essentially raping and pillage the company with KEIP and other sleazy tactics to line their pockets to last them when they are put into a permanent early retirement.

    Happy Ex-Norteler

    April 7, 2009 at 1:38 pm

  6. I have been told by my union that employees in the UK who have not been consulted before termination will be awarded compensation as secured creditors at an industrial tribunal. I hope this is correct information.


    April 7, 2009 at 8:55 pm

  7. Does nobody understand the meaning of a company being in an administration? It is no longer being run by the executives but by Ernst & Young whose job it is to cut costs and pay off as much debt run up by the company as possible. The £5,000 fine was paid because it is the most cost effective way of sorting the HR problem. No, it’s not nice and it’s not fair but that is business I’m afraid and it’s devoid of emotion.

    Deputy Dawg

    September 10, 2009 at 5:16 pm

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