Managing Legal and Ethical Issues of Business

PART 2 STAKEHOLDERS
SESSION 8: EMPLOYEES

Overview
The specific role of employees among the various

stakeholder groups Core ethical topics of employees rights and duties Ethical issues and problems faced in businessemployee relations The duties of employees and the companys involvement in enabling employees to live up to their duties Basic issues and problems of managing employees in the different cultural and national contexts necessitated by globalisation

Introduction
An organisation is only as good as the people who

work within it Employees are seen as critical to gaining improvements in organisational performance Could employees be considered the most important stakeholder? More and more employee issues are being left to organizations rather than being covered by the law

Humans as Resources?
Dear Sir, Whilst visiting a patient in Edinburgh's Western General Hospital, I was shocked to see a six-foot long board with large letters proclaiming: HUMAN RESOURCES. This distinguishes people who work in the hospital doctors, nurses, porters, office workers, managers from other resources such as computers, laser beams, toilet rolls, refuse bins etc. If the human resources are ill, are they labelled out of order or broken down and when being treated, are they being repaired? are babies listed as in process of being manufactured? and an expected date when they will be operational. When we define humans as resources, we are in danger of forgetting that we are dealing with people!

Legal issues
Usually a contract between the firm and employee

stating the rights and duties of the two parties Employee law varies considerably around the globe There is a considerable and growing grey area

Rights of employees as stakeholders of the firm

Employee rights Right to freedom from discrimination Right to privacy Right to due process Right to participation and association Right to healthy and safe working conditions Right to fair wages Right to freedom of conscience and speech Right to work Issues involved E qual opportunities, Affirmative action, Reverse discrimination, Sexual and racial harassment Health and drug testing, Work-life balance, Presenteeism, E lectronic privacy and data protection Promotion, Firing, Disciplinary proceedings Organization of workers in works councils and trade unions, Participation in the companys decisions Working conditions, Occupational health and safety Pay, Industrial action, New forms of work Whistleblowing Fair treatment in the interview, Non-discriminatory rules for recruitment

Discrimination
Discrimination in the business context occurs

when employees receive preferential (or less preferential) treatment on grounds that are not directly related to their qualifications and performance in the job Relates to Justice/Human dignity Managing diversity prominent feature of contemporary business Extensive legislation, but still inequalities exist

Addressing Discrimination
Equal Opportunities 2. Managing Diversity 3. Affirmative Action Potential for reverse discrimination?
1.

Employee Privacy
Four different types of privacy we may want to protect

Physical privacy Social privacy Informational privacy Psychological privacy

Health Testing
Highly contested issue

Despite these criticisms, such tests have

increasingly become common, particularly in the USA

Electronic privacy and data protection

Computer as a work tool enables new forms of

surveillance

Time and pace of work Usage of employee time for private reasons

E-mail and internet

Issue of privacy in situations where data is saved

and processed electronically

Data protection

Due process and lay-offs

Ethical considerations in the process of

downsizing

Right to know well ahead of the actual point of the redundancy that their job is on the line Compensation packages employees receive when laid off

Employee participation and association

Working conditions and work-life balance

Right to healthy and safe working conditions one of the

very first ethical concerns for employees Dense network of health, safety and environmental (HSE) regulation Main issue is enforcement and implementation
Work/life balance

Excessive working hours and presenteeism Flexible working patterns

Fair wages
The basis for determining fair wages is commonly

the expectations placed on the employee and their performance towards goals Problems of performance-related pay (PRP)

Risk Representation

Duties of employees as stakeholders of the firm

Employee duties Duty to comply with labour contract Issues involved Acceptable level of performance Work quality Loyalty to the firm

Duty to comply with the law Duty to respect the employers property

Bribery

Working time Unauthorized use of company resources for private purposes Fraud, theft, embezzlement

The ethical challenges of globalisation

Different cultures will view employee rights and

responsibilities differently This means that managers dealing with employees overseas need to first understand the cultural basis of morality in that country Raises the question of whether it is fair to treat people differently on the basis of where they live Relativism vs. absolutism

Some guidelines for ethical decision-making

Start with human rights as a basic compass for

providing direction Differences in the treatment of employees on a global scale depend on the relative economic development of the country in which the practice is taking place

The race to the bottom

Many critics argue that MNCs play a role in changing

standards in countries Globalisation allows corporations to have broad range of choice of location Developing countries compete to attract foreign investment Large investors tend to choose country with most preferable conditions

Lowest level of regulation and social provision for employee

Leads to race to the bottom in environmental and

social standards

Ruggies framework
Protect

Respect
Remedy

Summary
The specific role of employees among the various

stakeholder groups Core ethical topics of employees rights and duties Ethical issues and problems faced in business-employee relations The duties of employees and the companys involvement in enabling employees to live up to their duties Basic issues and problems of managing employees in the different cultural and national contexts necessitated by globalisation