Management at your company is arbitrary, unresponsive, and unconcerned or unknowledgeable about employment law, and you are asking who has the problem? In the first place, there is not a problem. There are several problems, all of which are owned by management.
When managers treat employees in the way that you describe, some of the additional problems they are likely to face include resentment, sabotage, lawsuits, absenteeism, and turnover. And speaking of turnover, you are asking what can be done about the management problem in your company, and one logical answer is being provided by your loyal co-workers who are rushing the exits.
Management at your company has made it very clear that the employees' interests, needs, and inputs are of no importance. Unless there is a change in leadership a major event hits the company hard, this is not going to change. Today's best companies treat their employees with respect and trust, while yours is aggressively pursuing the exact opposite approach. This is a classical toxic environment, and it is not a great idea to work or play in areas with this designation.
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