(Solution) 70S05 Question 1 (AC 1.4) People-Related Ethical Issues for Fitter Threads Ltd

Solution

70S05- Managing People in an International Context

Question 1 (AC 1.4) People-Related Ethical Issues for Fitter Threads Ltd

Labour Exploitation and Fair Wages

Labour exploitation is among the most pressing ethical issue in the garment industry, especially in terms of unfair wages and excessive working hours (Di Marco, 2023). From a general context, the ethical issues are critical for success of modern organisations. The ethical issues influence how sustainable relations are established amongst the employers and employees. Factories workers in countries like Bangladesh, India and Vietnam often earn far below a living wage, meaning employees work full time but still struggle to afford basic necessities (Grimshaw & de Bustillo, 2021). For example, Bangladesh’s legal minimum wage for garment workers is roughly $75 per month, while Asia Floor Wage Alliance estimates that a living wage should be a minimum of $250 per month to ensure basic worker’s survival (Ullah, 2024). Similarly, garment workers in India earn between $100 and $150 a month and a living wage is estimated to be $300 or more (Dutta, 2021). Due to the need for low costs of production and high profit margins, workers are often forced to work excessive overtime, exceeding 60-80 hours per week, and yet often receive no additional compensation for such overtime (Ford & Gillan, 2021). There is a need for appreciating the role played by employees in an organisation for achieving sustainability in relations and operations. This is particularly the case in organisations operating in the highly competitive business environment.

Furthermore, some factories practice wage withholding, where workers are pressured to work for an exceptionally long time before getting paid. According to Di Marco (2023), the lack of formal employment contracts in some cases exacerbates the issue, leaving workers without job security or legal recourse in cases of exploitation. Fitter Threads Ltd should take appropriate measures to ensure compliance on ethical wage practice. Living wage policies can be implemented across its factories to prove commitment to ethical sourcing (San Juan, 2022). This includes transparent payroll systems, making payments regular and fair, as well as aligning compensation with international wage benchmarks (Anggadini et al., 2023). If this issue is not addressed, it can severely damage the company’s reputation because global consumers, media, and advocacy groups closely monitor brands for ethical compliance. High profile cases of labour exploitation, such as the 2020 Boohoo’s Leicester supply chain scandal in the UK, where workers were paid as little as £3.50 per hour, have faced significant financial and reputational consequences (BBC News, 2020).

Health and Safety Standards

Another significant ethical issue…….

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