Josh Garrett is the head of packaging and distribution for all the branches worldwide for the company Biotech Health and Life Products, known as Biotech. Due to the rising labor cost in the Germany branch and the increasing distribution cost between Europe and North America. Josh is contemplating on moving the some of the Germany operations to a more profitable country like Iceland.
Because Iceland has different labor laws than Germany; there is no minimum wage and the salaries are determined through collective bargaining agreements. The employment for young workers are permitted in Iceland. Young workers are youth, children and young adolescent workers. Youth are under 18 years old, a child is under 15 years old and still in compulsory school and the young adolescent is under 15 years old but no longer in compulsory school which ends at age 16. Young workers category is up to the age of 24, after the age of 18 the workers contract have to be renegotiated. To be full time employee, a person must be 18 years of age. Young workers are restricted depending on the environment, type and time of work.
Salaries in Iceland are slightly higher than the rest of Europe due to higher cost of living and universal health coverage. But even with higher wage cost, because Iceland is the halfway point in the transatlantic route, the cost savings from the change in route will make up the small wage increase difference. Josh also discovered that Iceland is one of the poorest countries in Europe with a high youth unemployment. Josh figured out that he could hire young workers to work up to 40 hours a week and he could negotiate a lower salary. Josh decides to go ahead with the relocation and exclusively staff his business with young workers, then let them go before they reach the age of 19 before the workers contract need renegotiated.
Josh's employment practice came under fire and was deemed unethical by the employees. The workers feel that the company is avoiding to pay fair wages and to gain full time employment when the workers reach the age of 19. Josh knows that if the workers go on the collective bargaining agreement with the wages, which the company will be paying more than reasonable for unskilled labor cost and compromise the move to Iceland. The workers also question the company policy of paying different wages for the same job in other worldwide locations.
1) What is the ethical issue and what is the one unethical issue in the case scenario?
2) Does the case scenario illustrate ethical relativism or Moral universalism?
This question was answered on: Dec 08, 2020
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