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PAPERS:
Jussi Vahtera, Mika Kivimäki, Jaana Pentti, Anne Linna, Marianna Virtanen, Pekka Virtanen, and Jane E Ferrie
Organisational downsizing, sickness absence, and mortality: 10-town prospective cohort study
BMJ 2004; 328: 555 [Abstract] [Full text]
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[Read Rapid Response] Implications for corporate governance
Peter H.M. Brooks   (6 March 2004)

Implications for corporate governance 6 March 2004
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Peter H.M. Brooks,
Non medical
Auckland

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Re: Implications for corporate governance

This would seem to have interesting implications for companies that downsize either because of economic conditions or because of mergers. It would seem that there would be a case of corporate liability if somebody dies within four years of a downsizing in which they keep their job. Presumably if the company was reckless in downsizing in either not considering its effect on health or embarking on the downsizing for avoidable reasons - there might, for example, have been a takeover or merger that led to downsizing that could be argued to be unnecessary - there would be a liability.

I'm not sure how this would work in retrospect, a company that downsized before this effect on mortality might be excused on the grounds of ignorance - though it would be reasonable to suppose that the health of workers would suffer from a downsizing.

For companies contemplating downsizing in the future, though, this could be quite a problem. Those who keep their jobs but have to go through the downsizing have had their risk of death increased by the company's action - presumably, death is the extreme of a general increase in morbidity - for all of which the company would be liable.

Would it be wise for any company considering an event that might result in downsizing to make financial provision for class action suits against it for recklessly endangering the health of its employees, for increased sickness in the workforce and claims, maybe years later, that this period of increased morbidity has led to long-term health problems?

It looks a bit like corporate 'Gulf War syndrome' - only; in this case, there is concrete evidence that there is a direct causal connection.

Competing interests: None declared