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Ethical working vs Corporate Responsibility

As the UK begins to introduce measures to ease lockdown, businesses are now considering their ‘exit strategy’ and reflecting on the way they have adapted in the crisis. Whilst they will likely need to make some difficult decisions in the months to come, there are many lessons to be learned from the challenges faced in recent months. Now more than ever businesses will be weighing their ethical actions against their commercial responsibilities and assessing the balance.

A responsible reaction to COVID-19
The way that businesses across all sectors have conducted themselves during this crisis will be remembered for years to come. The pandemic has laid bare the importance of ethical treatment of people – whether employees, suppliers or customers – and while those with people at the centre of their response and actions may well take a small commercial hit in the short term, they will likely benefit from greater trust and employee and customer engagement in the long run.

Companies like Sainsbury’s, McDonald’s and Pret a Manger have been praised for their efforts to protect the personal safety of their staff throughout the pandemic, although others have been condemned for prioritising profit over people.

Following the announcement that the government retention furlough scheme will be extended to October, HMRC revealed that it was receiving a high number of reports from worried employees who have been encouraged to continue working. Unfortunately, while many businesses have been doing all they can to support their workforce during the crisis, there will be those that act less honourably.

Putting people first: employees, customers, and suppliers
Supermarket chains initially came under fire when images circulated of bare shelves in March, but many have since demonstrated great adaptability. Retailers have shown that they can service the community in different ways – committing to key worker only shopping hours and priority delivery slots for vulnerable people – helping to manage their reputation and protect their bottom line.

Morrisons has also promised to pay all small suppliers immediately to ensure that they do not struggle during the pandemic.

Earlier this month it was announced that the athletic brand Under Armour would join its rivals Nike and Adidas in committing to pay its factories in full and on time for all apparel and footwear in production when the coronavirus pandemic hit. Subsequently, Under Armour’s sales fell 23% in the first quarter of 2020, but despite the impact on its bottom line it continues to prioritise payments and has not asked for supplier price cuts.[1] 

Moving towards the ‘new normal’
Uncertainty abounds as to exactly what ‘new normal’ will look like for everyone.

Despite major disruption, the pandemic has opened up new possibilities for many employees and employers, such as remote working or diversification of services, which prior to this may have been considered challenges to tackle in the distant future.

There has long been a need for greater diversity in business, highlighted by the campaigns for women on boards. It is very hard for employers  to continue to argue about the negative impact of flexible or remote working if roles are successfully fulfilled during the crisis, which should open up more opportunity for senior and serious career progression for individuals.  It is likely that those juggling work and family commitments will be particular beneficiaries (and in turn so will their employers).  

Considering the options for future recruitment, if it is the case that a requirement for  set hours on set days is no longer required, employers will also be able to recruit from further afield, hopefully leading to a more diverse workforce.

Throughout Britain’s lockdown, businesses have had a unique opportunity to reflect on and assess their operations to determine a way forward that supports both their staff and the bottom line. Many have already adapted to maintain a commercially viable operation whilst accounting for the safety and wellbeing – financial and physical in some cases – of their employees, suppliers, and customers. We can hope that going forward businesses will uphold their commitments to operate ethically in a post-pandemic world. Ethics and profit are not mutually exclusive concepts.

[1] https://www-forbes-com.cdn.ampproject.org/c/s/www.forbes.com/sites/elizabethlcline/2020/05/13/under-armour-joins-rivals-nike-and-adidas-in-paying-garment-factories/amp/

Andrew Rayment, Employment and Human Resources partner at Walker Morris LLP

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