Internet abuse costs Irish SMEs €580m per year

17 Mar 2009

The assistant director of the Small Firms Association (SFA), Avine McNally, has warned that email and internet abuse is costing Irish SMEs €580m per annum.

According to the SFA, Irish businesses are now facing a growing problem over email and internet abuse by employees, and many SMEs are leaving themselves open to future legal action as the majority do not have an anti-abuse policy.

According to McNally: “The growing propensity of mail and internet abuse across society generally is now finding expression in the workplace. The duty of care now rests with the employer to protect their staff and customers from receiving information they may find objectionable.

“If employees misuse email or the internet for only 10 minutes each day, then the cost to Irish small business is approximately €580m a year, in pure productivity terms.

“But email and internet abuse, can leave an employer open to even greater costs, such as libel actions, inadvertent entry into binding contracts, breaches of copyright legislation and exposure to sexual harassment and bullying claims,” McNally said.

“The most important thing for companies to realise is that they will be held to be vicariously liable for the actions of their employees, even if these actions take place without the company’s consent.”

“Companies are easily exposed to claims of harassment, sexual harassment, and bullying in the workplace, originating in email and internet abuse. Under the Employment Equality Act, 1998 & 2004, awards can be made up to two years remuneration in the case of a harassment claim, while compensation in civil actions can be unlimited, so these issues should be taken very seriously by every business.”

McNally cites the example of a leading UK insurance company that was forced to pay £450,000 sterling in damages to a small financial house. A chain email that originated from one of the insurance company’s employees speculating that the financial house was unsound spread throughout the city of London, which led to it going out of business.

For this reason, McNally explained, it is essential for companies to ensure that all emails originating from their systems have an appropriately worded disclaimer in the footer to limit the firm’s liability to libel actions.

With the growing use of social-networking websites, the SFA stressed that it is vital for all companies to put in place a comprehensive email and internet abuse policy, which clearly sets out rules for personal use, prohibits access to offensive material and sets out safeguards to protect the company’s interests.

“SFA analysis shows that 57pc of small businesses have no email and internet abuse policy in place, despite the fact that they will be held legally liable if their employees misuse their IT systems,” McNally said.

“While small businesses have actively embraced technology and have put email and the internet on most desktops in order to achieve productivity gains, this empowerment brings with it a risk that many companies do not realise.”

By Jennifer Yau