What businesses need to know in the wake of Rockstar North’s dismissal reports

On 31 October, reports emerged that Rockstar North, the well-known games developer, had dismissed more than 30 staff in the UK – sparking headlines for all the wrong reasons. The Independent Workers’ Union of Great Britain moved quickly to tell the media that the workers affected had been members of the union, and of a chat group on Discord, claiming they were dismissed for “trade union activity” and that the dismissals were “unlawful and retaliatory.”  The controversy comes at a time when Rockstar’s flagship title, Grand Theft Auto, has seen its next instalment delayed yet still managed to scoop up two major industry awards, underscoring the studio’s complex mix of success and scrutiny.

The news has caught the attention of businesses in the UK, particularly in the tech sector, which has seen trade union membership growing over the past few years. There are clear lessons to be learned here for businesses, particularly in Scotland’s burgeoning tech scene, on how to avoid a similar public crisis.

Understand trade unions and the laws protecting them

Trade union activity is strongly protected under UK law and can make disciplinary action risky for employers if it can be argued that they have taken action against staff because of union activity. If the main reason for the dismissal is their union activity, it is automatically unfair and can result in uncapped compensation. The employee is protected regardless of their length of service. If employees claim they were dismissed for union organising, employers can face an uphill evidential and legal task to show any sanction was for another legitimate reason.

It’s important to understand that “gross misconduct” is not some sort of catch-all term for dismissing employees easily. In fact, a tribunal would look very carefully at alleged misconduct and require strong proof of it. If action is taken against an employer, the case may stand or fall on the quality of the investigation and evidence.

When unions challenge dismissals on the grounds of trade union activity, employers who can demonstrate – with thorough documentation – that the dismissal was for unrelated, legitimate reasons will be in a much stronger position to defend their actions than those who act hastily without proper records. However, in some cases, even the best paper trail may not be enough if the conduct in question is too closely linked to union activity to be legally justified.

Employment law changes fairly regularly – but a major change is expected soon with the anticipated passing of the Employment Rights Bill, perhaps before the year is out. When that Bill passes, it is expected to make it much harder for employers to dismiss staff by introducing a right not to be unfairly dismissed after six months, removing the current two-year service requirement. This right is expected to apply to ordinary unfair dismissal, as the automatic unfair dismissal protections (including for trade union activity) already apply from day one. Whilst these changes may not come into effect immediately, we can expect a significant impact on how employers handle dismissals. Considering this likely change, some employers may already be making strategic personnel decisions to get ahead of the Bill passing.

Don’t jump straight to dismissals – even to try to “get ahead” of legal changes

In the event of any dispute or perceived wrongdoing, employers would be wise to first consider settlement discussions that might reduce costs and reputational damage.

If any other businesses are concerned that they could face similar issues to those Rockstar North is reportedly up against, it’s wise to review manager training on what constitutes protected trade union activity, whistleblowing, confidentiality limits, and the importance of evidence. Businesses do not want to find themselves facing costly, arduous legal action because of a misinformed management decision, so it’s vital that decision makers at all levels are up to speed.

It’s generally good practice to review past discipline records and be prepared to treat similar behaviour the same way, to help avoid claims.

Communicating with your staff must be a priority – especially if a major decision or change has been made. Whilst many aspects of HR and dismissal processes can require strict confidentiality, employers should take advice on what they can communicate to other staff so they feel informed and supported, and to avoid causing anxiety and mistrust.

Consider engaging with trade unions first

In cases where union recognition is inevitable and there is clear majority support among staff, a hard-line approach can ultimately prove counterproductive. The forthcoming Employment Rights Bill will make union recognition easier, lowering the thresholds for success.

Some employers may not fully appreciate the positive aspects that trade union or employee representation can bring – not just for employees, but for businesses too. In some cases, constructive engagement with unions including putting in place an appropriate voluntary agreement, supported by legal and HR advice, can lay the groundwork for a positive working relationship.

Well-managed relationships with trade unions can be mutually beneficial. Employers must also realise, and this has been very evident in this recent news, that trade unions are typically well organised, particularly when it comes to media relations and communications. An aggressive approach against a union rarely pays off, as it can quickly lead to the kind of challenging situation Rockstar North finds itself in.

Get your communications right

Aggressive disciplinary action may be challenging to justify. Not only might there be backlash from former staff but, as we are seeing in this case, existing staff may raise issues too – such as the 200-plus Rockstar North staff who have signed a letter demanding “immediate reinstatement” of their dismissed colleagues.

Businesses should take heed of this situation, where the company is now fire-fighting on multiple fronts – with upcoming legal action from dismissed employees, an HR crisis with existing staff, and a public reputation crisis to address.

It’s not clear if this could have been avoided, but it’s a key reason why, when pursuing dismissals or redundancies of large groups, you not only involve lawyers, but also public relations and communications support to manage reputational risks.

Employee rights and power

A major development in the Rockstar North news story has been the collective response from over 200 staff demanding the reinstatement of dismissed colleagues.

For employers, this highlights the risk that robust action against union activity can galvanise support for unionisation and trigger legal and reputational challenges. Constructive engagement with staff can sometimes be more effective than confrontation – helping to protect both your business and workplace culture.

How we can help

If you would like to discuss how this issue might impact you or your business, please contact our employment law Partner, Robin.Turnbull@andersonstrathern.co.uk.