ISL452U-BUSINESS ETHICS
Chapter 4: Employees and Ethics
Introduction
Employment relations has its roots in the industrial revolution which took place from the 18th to 19th centuries.
The revolution paved the way for large-scale industry and mechanized manufacturing and the factory system. Furthermore, it leads to the emergence of two important actors in the employment relationship; employees and employers. Just after the revolution, the employees faced horrendous working conditions, i.e., extended working hours (12-16 hour shifts), low wages, dangerous working conditions, and child labor.
Employment relations has its roots in the industrial revolution which took place from the 18th to 19th centuries. The revolution paved the way for large-scale industry and mechanized manufacturing and the factory system. Furthermore, it leads to the emergence of two important actors in the employment relationship; employees and employers. Just after the revolution, the employees faced horrendous working conditions, i.e., extended working hours (12-16 hour shifts), low wages, dangerous working conditions, and child labor. On the other hand, these multinational companies deal with totally different issues such as cyberbullying, diversity management or whistleblowing. Therefore, ethical issues of employees vary from core labor standards to employee privacy.
The Changing Nature of Work
Technology and innovations have transformed living and working standards. Life expectancy has increased, basic health care and education have become widespread, new jobs are created, productivity has increased, and the income levels of some certain employees have risen. On the other hand, particularly manufacturing jobs are being lost to automation, the inequality has risen, and the working conditions have become unstable and insecure.
The World Bank (2019, pp.2-9, 18-32) notes certain changes in the nature of work. For instance, digital technologies allow firms for a quick scale up or down and blur the boundaries of firms, as evident in the rise of platform marketplaces. Moreover, today not just new jobs are replacing old jobs, but the skills profile of existing jobs are changing. Technology is replacing some jobs, but also creates new ones. Furthermore, the ‘generation X’ is replaced by the ‘generation Y’, and the ‘generation Z’. These new generations present challenges of their own for managements and organizations. They come with their own set of expectations, demands and skills, including incredible technology literacy. Technology has also transformed where we live and work. It has given rise to new forms of employment all around the world. Finally, instead of the once standard long-term employment contracts, technology has given rise to more short-term and insecure work. Due to the increased temporary works, the job security is under threat.
Today, the classical employment relationship and social contract have also been changing to reflect society’s expanded expectations of business. Nowadays the number of short-time jobs has been increasing, and the employees are less loyal, more mobile and diverse (Table 4.1). Today, even fulltime employees do not look for a promise for lifetime employment. Consequently, the evolving social contract is reshaping the employment relationship (Carrol, Brown & Buchholtz, 2018, pp. 522-523).
The International Labour Organisation (ILO) and the Fundamental Principles and Rights at Work
The International Labour Organisation (ILO), created in 1919 as part of the Treaty of Versailles that ended World War I, is devoted to promote accessible, productive and sustainable work in conditions of freedom, equity, security and dignity. The ILO, the unique United Nations tripartite agency bringing together governments, employers and workers representatives of 187 member states, sets the labor standards and develops the policies and programs promoting decent work for all women and men. The ILO defends the belief that universal and lasting peace can be accomplished only if it is based on social justice.
The ILO develops international labor standards, setting out basic principles and rights at work. It produces social standards at work by means of conventions and recommendations. ILO has developed guidelines for employment and labor policies. Since its founding in 1919, the ILO adopted several conventions which could be ratified by governments of ILO member countries and many recommendations on various issues such as working time, child labor, occupational health and safety. The ILO also adopted the Declaration on Fundamental Principles and Rights at Work on 18 June 1998. The Declaration consists of four basic rights and principles at work (Table 4.2): Freedom of association and the effective recognition of the right to collective bargaining, the elimination of all forms of forced or compulsory labor, the effective abolition of child labor, the elimination of discrimination in respect of employment and occupation. The Declaration commits member states to respect and promote rights and principles mentioned above, and monitors whether or not they have ratified the relevant conventions. These rights and principles, guaranteed by the Constitution, the Labour Act No: 4857 and Trade Unions, and Collective Labour Agreement Act No: 6356 in Turkey, are the core labor standards as a social minimum for the global economy.
In a world that remains rife with decent work deficits, the global framework agreements (GFAs) have been signed between particularly multinational companies and global trade unions. With GFAs, companies consent to respect workers’ rights and to promote decent work globally within their subsidiaries and along their global supply chain. Nearly all these agreements, a step towards building a global labor relations system, refer to the ILO standards by explicitly mentioning either ‘the core ILO conventions’
or ‘the ILO Declaration on Fundamental Principles and Rights at Work’ (Drouin, 2008, p.238; Hadwiger, 2015, p. 5).
Employee and Employer Responsibilities
The employment contract establishes a personal relationship between the employer and the employee. It also imposes obligations on both parties. In other words, both employers and employees have mutual duties and responsibilities derived from the employment contract. The Labour Act No: 4857 regulates these mutual responsibilities in detail.
There are two main responsibilities of employees; duty to work, and duty of loyalty and whistleblowing. The basic duty of the employee under the employment contract is to perform his/her tasks. S/he is further obliged to work personally. In other words, work to be performed by the employee is, as a general rule, a personal attribute that cannot be transferred, unlike in case of a lease, loan or sales contract. Because the employee’s personality, capabilities, skills and experience were considered in the conclusion of his/her employment contract, s/he may not delegate his/her tasks to a third party. Similarly, in case of the employee’s death, his/her such duty shall not pass or descent to his/her heirs. The employee must fulfil his/her obligation to work under the mandatory rules of labor legislation, individual employment contract and the collective agreement.
The employee must perform the work not only personally but also with care and diligence. Consequently, the employee is under the duty to duly use the employer’s such machinery, equipment, tools and instruments, technical systems, facilities and motor vehicles and to show care and diligence to such materials entrusted to him in order to do his/her tasks (Centel, 2017, p.106).
The employment relations, as a fiduciary one, creates some primary responsibilities that lie with the employee, such as duties of loyalty, obedience and confidentiality, among others. The duty of loyalty, often called as faithful service or fidelity, is regarded as a fundamental obligation of employees. It is based on the principles of honesty, faithfulness, good faith, confidentiality and trust. It intends to protect the business interests of the employer and to avoid any act that could harm these interests (Centel, 2017, p.107).
The duty of loyalty could include not harming the company and supporting the success of the company as well as committing to the core values and mission of the company. However, the duty of loyalty is limited. It should not include doing or supporting unethical or illegal activities, covering up wrongdoing in the company or by supervisors. In some cases, an employee may override the duty of loyalty and blow the whistle on significant wrongdoings within the company (Becker, 2019, p. 131). “Whistle-blowing is the act, for an employee (or former employee), of disclosing what he/she believes to be
unethical or illegal behavior to the higher management (internal whistle-blowing) or to an external authority or to the public (external whistle-blowing)” (Bouville, 2008, p. 579).
Employers also have responsibilities towards their employees. These are the duty of wage payment, the duty to protect the employee, and the duty to equal treatment.
Remuneration, as a counterpart of the employee’s duty to work, is one of the fundamental responsibilities of the employer. The wage is often the unique or the main income of an employee. Thus, there are strict legal regulations about the wage that should be paid regularly and in full to the employees. To protect employees against unduly low pay, the national minimum wage is determined in many countries, including Turkey. Alongside the notion of the minimum wage, there is also the concept of fair wages.
Furthermore, the employers should protect their employees physically and psychologically, and create a decent working environment. Accordingly, under the duty to protect the employees, the employer should adopt some certain measures to prevent occupational accidents and diseases. It is also crucial to protect the personality and privacy of employees as well as to prevent any sexual or psychological harassment (Centel, 2017, p. 123).
Harassment is defined as any act of intimidation, degrading, humiliating or embarrassing behavior that is intended to violate human dignity or give rise to such a result including psychological and sexual types. Harassment in the workplace, regardless of whether it is a sexual or psychological one, is against the personal rights of the employee (Centel, 2017, p. 125). Psychological harassment is also named as bullying or mobbing.
Cyber-bullying has emerged as a new form of harassment not only among children and adolescents but also among employees. Cyberbullying is defined as inappropriate, unwanted social exchange behaviors initiated by a perpetrator through online communication technology and devices (Piotrowski, 2012, p. 45). It comprises written- verbal acts, such as abusive emails, visual acts, such as posting an embarrassing video on a website, exclusion and impersonation (Coyne, et.al, 2017, p. 946).
Sexual harassment in the workplace is also a worldwide problem with negative consequences, such as decreased job satisfaction and organizational commitment, withdrawal from work, poor physical and mental health. There are two broad types of sexual harassment in the workplace. First is called quid pro quo harassment which is a situation where something is given or received for something else. Second is what is called hostile work environment harassment. In this type, nothing is given or received, but the employee faces a hostile work environment by sexual oriented behaviors, such as sexual teasing or jokes, e-mails with sexual pictures or cartoons (Carrol, Brown and Buchholtz, 2016, p. 597).
Respecting employee privacy, based on the right to privacy explicitly stated at the Universal Declaration of Human Rights, is also one of the important duties of the employer. Particularly, the protection of personal data (informational privacy) and monitoring (physical privacy) are the most problematic issues challenging employee privacy.
The employers have the fundamental duty to equal treatment. Otherwise, the employees are not generally protected from discrimination. Equality (non- discrimination) at work is one of the aspects of the expansion of human rights system into the domains of working life (Süral, 2009, p. 245) and also a crucial element for diversity management. Discrimination at work is a differential and less favorable treatment of certain individuals because of any of characteristics, such as race, color, sex, political opinion, disability, age, trade union membership, regardless of their ability to fulfil the requirements of the job. Accordingly, diversity management is the process of creating and maintaining a workplace which enables all employees -regardless of individual characteristics- to reach their full potential while pursuing organizational objectives.
In Turkey, according to the Penal Code, in case a person goes for an unfair discrimination among the applicants for a job on the basis of language, religion, gender, political, philosophical belief or opinion, sect or similar factors, this person shall be sentenced to imprisonment from six months to one year or imposed punitive fine (article 122).
Most of the countries set also some affirmative action policies and legislations to abolish the discrimination at the workplaces. The affirmative action (positive discrimination) measures designed to ensure that persons in disadvantaged groups (such as the disabled or women) enjoy equal employment opportunities at all levels of employment and are equitably represented in the workforce of a relevant employer.
Lay-Off Procedures
The employment contracts are not long-lasting and could be terminated by the employer or the employee. However, the lay-offs are very problematic particularly in an economic environment with high unemployment rates. Therefore, the lay-offs should be fair and based on a valid reason. Informational justice, defined as providing employees with adequate explanations in a timely manner, is an efficient way to prevent employees’ perceptions of unfairness.
In countries with job security systems, the dismissals should be based on a valid reason. Decrease in employee’s productivity, performance and concentration, poor or insufficient manner in spite of warnings, frequent late attendances in the office, long telephone calls, gossiping, cyberloafing, economic crisis, applying new technologies or new working methods, downsizing, decline in sales, orders and demand could be accepted as valid reasons to
dismiss an employee. However, union membership and union activities, recourse to administrative or judicial authorities against employer, race, color, sex, marital status, family responsibilities, pregnancy, confinement, religion, political opinion and similar reasons or absence from work during maternity leave shall not constitute a valid reason for termination.
In accordance with the ‘last resort’ principle (ultima- ratio), even where an employer may rely on one of these valid reasons mentioned above for termination, all the other possible practices that would maintain the employment relationship must have been tried before termination. In other words, a dismissal may not be pronounced, until all reasonable measures or possibilities of reaching an understanding have been exhausted.
When an employer decides to dismiss some employees for operational reasons, such as downsizing or economic crisis, the decision of whom to dismiss must be based on social selection criterion. In accordance with this principle, which has a common use particularly in Germany, the employee selected is the one for whom dismissal will have the least effect.
Employee Participation and Association
The human relations approach to management emphasized the importance of communication between employees and their employers. Research has proved that employee participation increases effort, which subsequently improves efficiency and productivity, it reduces the cost of monitoring employees and leads to increased commitment (Cabrera, et.al., 2003, p. 44). Employee participation, a right often clashing with the management’s duty to determine how best to protect the interests of owners, comprises all practices that give employees some influence in how the workplace is organized, managed and governed. Today, the key issue about employee participation is not so much as whether employees should have a right to participate in decisions, but rather to what degree this should take place (Crane & Matten, 2016, p. 305).
The levels of employee participation differ widely with regard to their functions and powers, ranging from informative participation to decision participation (Figure 4.7). As an initial stage, at the informative participation level, employees can participate by receiving information about crucial decisions that have an effect on their work. At the consultative participation level, employees may have the opportunity to express their views on potential decisions planned by the employer. At this level, the final decision belongs to the employer but employees have a chance to influence the decision. At the administrative participation level, employees may have a greater degree of share in the authority and responsibility in the management functions, and can be delegated control over a range of decisions relevant to their jobs. As the most far reaching level, the decision participation (co-
determination) covers employees have a full and codified right to determine major decisions in the company.
Trade unions delegate the employees at workplaces and provide administrative employee participation via collective bargaining. There are three fundamental and complimentary union rights: the right to associate, the right to collective bargaining and the right to go on a strike (Figure 4.8). These rights are vital for workplace democracy and participation. Employees establish and join trade unions to make a “collective voice” and to constitute a countervailing power against the employer.
As a core labor standard, employees should have both positive and negative union freedom. Positive union freedom means the freedom of workers and employers to form and join unions and confederations of their own choosing. Negative union freedom means the freedom of the worker and employers not to join a union or to refrain from resigning or to resign from the union.
Collective bargaining is also the most efficient tool for administrative employee participation. It is a mutual rule making process regulating the terms and conditions of employment. The output of this process, involving negotiations and discussions, is collective labor agreement. The collective agreement may cover the issues such as the levels, payment systems and administration of wages, physical working conditions, fringe benefits, job security, changes in technology, work tool and techniques, grievances, health and safety, disciplinary matters, union activities (Katz, Colvin & Kochan, 2017, p. 13). If a dispute arises during collective bargaining, the trade union can call a strike. Therefore, strike is a mechanism to settle the collective labor disputes, not an objective of a trade union.