IKEA’s French business has been fined €1.1m after being found guilty of spying on its employees. It is a shocking case, made even more surprising when it involves the retailer we normally associate with a Scandinavian, laid-back, friendly culture.
It’s difficult to see how any employer can ever justify the steps IKEA France took. The details of the case are quite staggering. It hired private investigators to do background checks on candidates and staff to identify those who had the potential to cause trouble. This included fraudulently accessing police databases to check their criminal records and illegally eliciting other personal information. Data was gathered on over 400 candidates and staff over the period 2009-2012.
The basis of the prosecution was the receipt of personal data by fraudulent means, which is a crime in France. IKEA France and several key senior managers (including the former CEO and head of risk management who both received fines and suspended sentences, narrowly escaping time in prison) not only grossly invaded these individuals’ privacy but also breached their human rights, in my view.
The case provides several lessons for other employers, particularly around background checking, corporate governance, and ensuring a corporate culture is demonstrated in practice across a business.
Background checking as part of recruitment process
Background checking is still an important feature of the recruitment process. If poor references or other important facts not known at the time of hiring someone subsequently come to light, it is possible to end that employee’s employment, provided a fair procedure is followed.
However, there are strict boundaries under data privacy laws (GDPR) in terms of collecting personal data, human rights legislation, what is permitted by the employment contract, and of course under criminal law in countries where these types of breaches can attract criminal sanctions, as in IKEA France’s case.
The type of background checking that is acceptable will vary depending on the jurisdiction, but generally, employers should stick to accessing publicly available data. Over the last few years checking social media has formed part of the recruitment process.
If more detailed background checking is required, it should only take place with the candidate’s explicit consent. Generally, this kind of enhanced scrutiny should be role-specific, rather than employers taking a blanket approach.
An employer’s approach to background checking must be able to stand up to scrutiny, especially in heavily unionised jurisdictions and where the law plays a key part in regulating steps taken to gain access to personal data.
Importance of corporate governance
To me, this case shows an extraordinary lack of trust by IKEA France of candidates and employees, and an endemic culture throughout that business as several departments were involved, including HR.
In contrast, IKEA portrays itself as a family-friendly, cool, and laid-back Scandinavian business. The reality of IKEA France at that time couldn’t have been more different. Even if this isn’t how those at IKEA HQ would run their business, it shows a distinct lack of wider corporate governance that these practices were allowed to go on.
These events happened in the period up to 2012 and IKEA has improved its governance since then, including the introduction of a code of conduct for employees. IKEA has said it is also reviewing its governance and risk management approach again in light of the court’s decision.
Embedding culture and values across a business
This case shows how crucial it is for a business, particularly an international one with multiple business units, to ensure its culture and values are recognised, accepted, and embedded in every corner of the company and that decisive action is taken to address breaches when they arise.
It’s not enough for a company’s HQ to tell its employees what the vision and values are, and publicise them to their customers, if steps aren’t taken to ensure the employees understand and live up to them in the workplace. That is where effective leadership comes in, which includes accountability on the part of all those with management responsibilities to ensure the company lives up to its promises.