What can employers learn from the Post Office’s ‘toxic management culture’?

As MPs highlight secrecy and ‘pervasive’ use of NDAs, People Management asks experts for their views

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A “toxic management culture” was the catalyst for the poor treatment of numerous Post Office workers during the Horizon scandal, Marion Fellows, SNP MP for Motherwell and Wishaw, said in parliament.

She added: “The Horizon IT scandal resulted from the Post Office’s management culture.”

More than 900 sub-postmasters and postmistresses were wrongly prosecuted or convicted of stealing between 1999 and 2015 as a result of glitches in its Horizon computer system, which suggested money was missing from accounts of thousands of sub-postmasters. Many suffered financial ruin as they used their money to cover up shortfalls.




As part of the debate on ‘Management culture at Post Office Ltd (POL)’, Fellows said: “The fundamental principles of public life, including openness, honesty and integrity, have not been upheld by the management of POL for decades.”

She reiterated the judgment from Bates and others vs POL, in which Mr Justice Fraser stated that there was “a culture of secrecy and excessive confidentiality” at the Post Office.

Jim Shannon, DUP MP for Strangford, highlighted the “lack of trust and support” given to postmasters, saying: “Morale in the Post Office is at an all-time low.

“In any discussion of the management culture of the Post Office, there needs to be serious cognisance taken of how to rebuild trust. That starts with honest and open communication and the decision to work with Post Office staff at every level.”

‘Little has changed’

Nick Read, who was appointed CEO of POL in September 2019, said in 2021 that he aimed to “overhaul the culture of the organisation”. However, Fallows told MPs she doubted how much change had been achieved. 

“It is worth pointing out that more than 40 current management staff were there throughout the Horizon scandal period,” she said. 

Referring to the multiple failures by the Post Office to disclose evidence during the inquiry, Fellows said: “The clear case of obfuscation on the watch of the current management of Post Office Ltd suggests that very little has changed in the organisation.

“Sub-postmasters have no faith in the current management of POL to turn things around. What they see is an organisation that is top heavy, with multiple layers of management and directors who have self interest at heart.”

What can employers learn?

Martin Tiplady, managing director of Chameleon People Solutions, tells People Management: “The issues here are extreme and reflect an awful set of circumstances but it should demonstrate to us all how secrets in one part of an organisation can easily become immune to challenge and sometimes conceal practices that are inappropriate.”

Kathleen McAdams, director of Albany HR, says: “With a change management programme, which is what the introduction of Horizon was, to make the management of money into and out of the post office more efficient, it’s essential to have strong governance and that seems to have been missing from the beginning.”

McAdams also notes how the Post Office blamed the users for faults with the Horizon computer system, rather than “take accountability”.

“I would like to think that it was ignorance of the fact that technology can get it wrong,” she says. “But it appears that it was in part actually arrogance and a preference to believe the ‘intelligent’ big company executives and lawyers, rather than the ‘lowly, less intelligent’ Post Office workers, and believe that they must be wrong.”

Ian Moore, managing director of HR consultancy Lodge Court, says: “The scandal underscores the importance of transparency, open communication and trust in management.

“Organisations should strive to foster a culture where employees feel comfortable raising concerns and where such concerns are taken seriously and addressed promptly. This includes clear whistleblower policies and promoting an open dialogue across all levels of the business.”

Use of NDAs

During the debate, Sarah Green, Liberal Democrat MP for Chesham and Amersham, highlighted that there was “pervasive use of non-disclosure agreements (NDAs)” in POL.

Green said she had been contacted by a constituent who “has effectively been gagged” after working at the Post Office for more than three decades. He was unable to speak out about the scandal to journalists as he was tied to an NDA he signed when he retired, as well as having signed the Official Secrets Act when he joined the organisation.

Green read a statement a constituent had told her, saying: “The Post Office was very careful to ensure that their employees with links to Horizon were unaware of how the system was operating or the volume of sub-postmasters who were being prosecuted.” 

The statement continued: “The Post Office has used these NDAs to ensure that current and ex-employees are effectively silenced. If not tied by these agreements it is possible that information would have been available to those enquiring about the scandal much earlier in the process.”

The inquiry chair, Sir Wyn Williams, has confirmed that the Post Office will no longer be enforcing the terms of any NDAs.

David Ashmore, employment law partner at Reed Smith, says the scandal shows that, when NDAs are overused, they can have “enormous reputational consequences”.

“NDAs are a legitimate business tool used to protect confidential company information, including the terms of an exit package,” he says. “But an NDA needs to be very carefully worded and kept under review to take into account regulatory guidance.

“It’s really important to avoid any suggestion that the terms of the NDA would stop the employee taking legitimate steps such as reporting concerns to a regulator, giving evidence in court or speaking to a therapist.”

Alan Lewis, partner at Constantine Law, says NDAs were largely used by the Post Office to govern settlement deals with postmasters and that they are “a common feature generally with employers when they enter into settlement agreements with departing employees”.

However, Lewis also points out that confidentiality obligations are no longer enforceable in court if restrictions “prevent an individual from making a protected disclosure”, meaning the disclosure of alleged wrongdoing must be in the public interest.

Role of HR

“It is especially important that HR leads the way,” says Tiplady. “Too often, HR trades in secrets unnecessarily themselves and creates a mystique and approach that becomes impregnable when it doesn’t need to be. How often have we heard staff challenge HR practice because it is not well explained, communicated or justified?”

McAdams adds: “HR professionals should not be put in the position of policing poor organisational behaviours, but should help create and maintain the culture of an organisation and challenge when things are going wrong.

“This whole situation highlighted the value of having HR professionals at board level, to promote fairness and ensure good governance.

“I cannot understand how it was possible that no one was challenging the number of prosecutions after Horizon was introduced and asking questions about where the extra money was coming from, that would have ended up in the Post Office’s coffers.”

Read the CIPD's advice on Toxic Workplaces, Health and Culture