Business Ethics

Employers and Employees

In 1992 Mike Ashley started the company Sports Direct; it grew rapidly to become the biggest sports retailer in the UK and one of the biggest in Europe. However, in 2016 the lid was lifted on what seemed to be draconian working practices for its employees and it was revealed that workers were not paid the minimum wage. One employee claimed that, "if we went to the toilet more than once every four hours we were called into the manager's office and questioned". "I lasted six days before I quit". Employees were often searched when leaving the store after work  -  sometimes having to strip to their underwear. Employees were docked fifteen minutes' pay for being one minute late. "Sometimes on my zero-hours contract, I would end up working for ten days in a row, for ten hours a day. On other weeks I would get given only one three-hour shift the whole week. There was no routine".

Did Sports Direct do something morally wrong? To make this a little more manageable, let us put aside the illegality of their behaviour. Let's assume that they did nothing illegal in their practice.

Given this we might think that they did not do anything morally wrong. After all, the employees were not press-ganged into working for the company. They were not chained to their desks nor denied access to exits. Employees were not prisoners or slaves but were rational human beings who chose to work for this company. It is plausible that the employees simply failed to read the "small print" in their contracts. In this case why think that the business did anything wrong?

Remember that for an "act utilitarian" an act is morally right if, and only if, it brings about more happiness than any other act, so maybe then Sports Direct did not do anything morally wrong.

In the case of Sports Direct, it might be that the millions of people who gained happiness from owning the cheap sports products outweighed the misery and unhappiness of approximately 27,000 employees. In which case it was morally acceptable for Sports Direct to treat its employees in the way that it did.

Moreover, the act utilitarian has no time for "rights" in general and in "employee's rights" in particular. However, we suspect most people would believe that what Sports Direct did was morally wrong and even if it were legal, people would judge that the company ought not to have acted in the way that it did.

That said perhaps we do not need to draw this conclusion even if we are act utilitarians. This is because Mill said it would be better to be a human dissatisfied than a pig satisfied. He thought that there were "higher" and "lower" pleasures. Only humans can experience higher pleasure, non-human animals cannot.

Mill argues that pleasure should not just be weighed on the qualitative "hedonic" calculus. If we introduce higher and lower pleasures, then we can respect the intuition that what Sports Direct did was morally wrong. Mill thought that higher and lower pleasures were qualitatively distinct. If this is true then we might think that the lower pleasures of, say, a million people having a new tennis racket or owning the latest trendy trainers, is outweighed by the higher pleasure of the three quarter of a million employees being treated fairly.

Furthermore, Consequentialist Theories also spell out the "utility" not in terms of happiness or pleasure but in other terms such as welfare and preferences. A preference or welfare consequentialist might then conclude that what Sports Direct did was morally wrong because its actions did not maximize welfare and/or preferences. Investigating this claim, though, would take us well beyond the scope of this chapter.

Moving away from Act Utilitarianism, we might think that the rule utilitarian would claim that the actions of Sports Direct was morally wrong because the rule "treat your employees fairly" is justifiable on utilitarian grounds. That is, people will typically be happier if this rule is followed than if it is not. Hence, a rule-utilitarian might conclude that what Sports Direct did was morally wrong as arguably Sports Direct did not treat its employees fairly.

What is important then is to realize that it is not as clear-cut as saying that a utilitarian would believe that a certain business practice is morally right or wrong. Rather it will depend on the specifics of the situation and how, according to the position, we should maximize pleasure, happiness, wellbeing, preferences, etc.

So much for the utilitarians, what about the Kantians? Well, the Kantian talks in terms of duty and Categorical Imperatives; for the Kantian it is always morally wrong to treat someone as solely a means to an end.

On first look, we might think that this is precisely what Sports Direct did in treating its employees as a means to an end (profit). But it cannot be that simple. For if this were true then all businesses would be doing something morally wrong because all businesses use their employees to make a profit.

We need to think a bit harder about what Kant is saying. Kant is not saying that businesses cannot use people as a means to an end but that the key is whether the business is treating people as rational and free.

Using a taxi is not morally wrong even though we are using the taxi driver for our own end. This is because we pay the taxi driver and they are voluntarily entering into this means-end relationship. The same then could be said for the employees in a business. Sure, it is true that McDonalds, or Ford, or Body Shop are using their employees as a means to an end but this is acceptable because they pay their employees and their employees are entering the contract of work freely.

Perhaps though the Kantian would say that Sports Direct is different because it practiced a form of exploitation. The people working for Sports Direct are very often from the poorest group of society. This means they do not have lots of jobs to pick from so it is not as if they could leave the job and quickly find another. Moreover, we might suppose that in leaving the job they might end up in a situation which is far worse, perhaps not being able to pay their rent, being on the street, having relationships break down.

In this case, we might wonder if the employees really are freely choosing to work for Sports Direct. If they are not, then Sports Direct is treating its employees as means-to-an-end even though it is paying them. In which case the Kantians would say that what was happening is morally wrong. We'll look at other features of the Kantian position when we consider other issues below.