The City is tackling workplace bullies—but what about everyone else?

              

 

This is an abbreviated article by Liz Barclay – read the full article at Business111.com/news

Nearly 40,000 financial firms are coming under tougher rules governing serious workplace misconduct. The changes should make it harder for abusive managers to escape scrutiny by moving jobs. It is a major step for the City—but bullying and intimidation do not stop at the Square Mile.

BAD BEHAVIOUR ISN’T JUST A CITY PROBLEM

From September 2026, approximately 37,000 to 40,000 financial services firms will come under strengthened Financial Conduct Authority rules covering serious non-financial misconduct.

Serious bullying, harassment, discrimination or violence may call into question whether someone is fit and proper to work in regulated financial services.

Where misconduct has been properly established, relevant information may also need to be included in regulatory references supplied to future financial-sector employers.

The aim is to stop “rolling bad apples”: individuals who move between firms without their new employer being told about serious misconduct.

However, toxic behaviour affects every sector, not only banking, insurance and investment.

Conflict costs £28.5bn

Acas estimates that workplace conflict costs UK employers approximately £28.5 billion a year—more than £1,000 for every employee.

The figure includes grievance and disciplinary procedures, sickness absence, resignations, dismissals, recruitment, legal processes and lost productivity.

Not all workplace conflict involves bullying or harassment, so the entire bill cannot be attributed to misconduct.

However, toxic management can cause damage far beyond the original complaint.

Productivity falls, mistakes increase and decisions take longer. Good employees leave, taking their knowledge and customer relationships with them. Sickness absence rises and managers lose working time to investigations and disputes.

Innovation also suffers. Employees will not challenge bad decisions or suggest improvements if they expect to be ridiculed or punished.

Small firms can be hit hardest

Microbusinesses rarely have HR departments or independent reporting systems.

In a team of five, a conflict involving two employees directly affects 40% of the workforce. There may be no alternative team, manager or workplace to which someone can be moved.

A grievance can require external advice, extensive management time and repeated meetings. One resignation or lengthy absence may remove a significant proportion of the firm’s capacity.

The business’s reputation can also be damaged quickly through a tribunal judgment, public complaint or social-media post.

However, small firms should not be expected to recreate the FCA’s regulatory system.

A bank and a family shop have very different resources and risks. Any wider rules must be proportionate.

Should the rules apply everywhere?

The principles should extend beyond finance, but the FCA regime should not simply be copied and imposed on every business.

Complaints must be investigated fairly. Information given to future employers must be accurate, relevant and based on established facts.

An untested allegation should not become a permanent stain on someone’s career.

Employers must also consider confidentiality, data protection and defamation. The system must protect genuine complainants without allowing malicious or unsupported allegations to follow people between jobs.

Every workplace should nevertheless follow some basic principles:

• Give workers a safe way to raise concerns
• Investigate serious complaints fairly
• Protect complainants from retaliation
• Keep accurate records
• Do not conceal proven misconduct
• Provide truthful and fair references

Prevention is cheaper

Policies and management training can look like another cost at a time when small firms are already under intense financial pressure.

But prevention is far cheaper than prolonged absence, lost employees, legal advice or a tribunal claim.

A microbusiness does not need a hundred-page employee handbook. It needs a short conduct policy, a clear reporting route, an alternative contact where the manager is implicated and access to reliable external advice.

Workplace misconduct is not merely an HR issue.

It reduces output, drives away good employees, increases absence, suppresses innovation and exposes businesses to legal and reputational damage.

The FCA’s action recognises that serious personal misconduct can reveal whether someone is suitable to hold responsibility within a regulated firm.

That principle matters outside finance too.

If Britain wants stronger productivity, safer workplaces and more resilient businesses, misconduct reporting cannot stop at the Square Mile.

Bad behaviour is not just a City problem. It is a national business problem—and preventing it is an investment, not an administrative luxury.

This is an abbreviated article by Liz Barclay – read the full article at Business111.com/news

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