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Ethical issues in business: what are they and how to handle them

women employees working in an office

Running a business comes with many responsibilities. As a business owner, you're expected to focus on growing your business while ensuring that you maintain a healthy working environment that contributes to your employees' welfare. Unfortunately, ethical issues in workplace are still prevalent. If not taken seriously, they risk not only ruining your hard-earned reputation, but may have legal ramifications. It's crucial to identify such issues early and address them effectively.

Before we go through some common ethical concerns that businesses encounter, it’s necessary to first understand what ethical issues mean in a business context.

What are ethical issues in business? 

When an activity in a business environment conflicts with moral human principles and affects individuals involved working within the organisation, it becomes an ethical issue. While government-enforced rules can hold employees and employers accountable for lawbreaking conduct, they can't entirely prevent individuals from acting unethically. Thus it's your responsibility as a business owner to address ethical concerns and establish clear guidelines on what behaviour is and isn't permissible in the workplace.

Common ethical issues in business 


Discrimination is still a major concern in this modern world, and a workplace is no exception. Workplace discrimination happens when an employee is treated unfairly due to prejudice towards a particular gender, age, ethnicity, religious views, and more. For example, if a female employee who does the same amount of work as her male coworker is refused equal pay owing to her gender, it can be identified as discrimination. In a research undertaken by AllVoices to investigate workplace discrimination, a startling 80% of surveyed employees disclosed that they had experienced instances of discrimination while working remotely. These incidents unfolded through various digital means, including video conferences, chat applications, and phone conversations. This data serves as a stark reminder that discrimination is not confined to physical office spaces. Regardless of whether a person is discriminated against intentionally or not, these toxic behaviours must never be entertained and must be reported to the law when necessary.

What you can do to stop discrimination in the workplace:

  • Ensure that all your employees are aware of behavioural rules before joining your organisation, and give people the confidence to bring discrimination to light.

  • Give an option for your employees to report discrimination issues anonymously. In the same AllVoices study, 90% of respondents expressed that they will be willing to report such incidents of discrimination if their identity could be protected.

  • Develop a diverse workforce by hiring individuals who represent various backgrounds. Having a diverse workforce will lower the risk of discrimination and bring in different perspectives and knowledge.

  • Maintain a fair and transparent pay scale and always keep a check on if anybody is over or underutilised for what they are paid.

Read more about workplace entitlements and obligations on the Fair Work Ombudsman website.

Workplace safety 

According to a 2019 report by Safe Work Australia, 183 Australian workers lost their lives at work due to injuries sustained doing a work-related activity. Although the overall the number of fatalities has been decreasing since 2007, every number above zero is one number too many. Regardless of the size of your business or the industry you’re in, as a business owner, you are ultimately responsible for ensuring the health and safety of employees in your workplace. It's also wise to remember that an employee's psychological well-being is just as important as their physical health, and it's important to pay attention to both.

What you can do to create a safe working environment:

  • Regularly inspect your workplace for any potential hazards and assess if your business follows all necessary safety standards.

  • Make sure your business meets the mandatory requirement for having an adequate number of trained first aiders. Apart from that, you can also train all your employees on how to handle emergency situations and give them a hands-on demonstration to use basic first aid equipment.

  • Talk to your employees about their work-related stress and regularly check in to see how they're doing. For example, you can have a scheduled check-in meeting with your employees once every quarter or conduct anonymous surveys to check how the job impacts their stress levels and well-being.

Read more about workplace safety on the Safe Work Australia website.

Social media use 

It's hard to determine the ethics of dismissing or disciplining workers for their social media behaviour outside of work hours. In most situations, an employee can be fired for their online behaviour given that there's a justifiable reason (such as breaching your business policy) rather than an attempt to cover up a business's unlawful activities. However, when the process of determining the valid reason is mishandled, it can cause serious trouble for your business.

What you can do to address ethical concerns related to your employees' social media use:

  • Set a clear social media policy for your business to help employees understand what online behaviour is expected from them, why it's important, and what consequences they may face for violation.

  • Use clear and simple language while drafting your social media policy to ensure that its objective is not misunderstood.

Employee privacy  

With advancements in surveillance technology, you can now track every step your employees make on your business-owned devices. While this move is intended to ensure productivity, it can quickly become unethical when it crosses the line into snooping. At times, employees might use their work devices to read personal emails and store private files, increasing the risk of exposing sensitive data such as health information, bank account details, personal phone numbers, and browsing history. Therefore it's necessary to have a clear set of rules for both parties to ensure the data is being handled responsibly.

What you can do to develop good privacy practices in your workplace:

  • Have a workplace privacy policy that clearly defines what information your business collects about your employees, the areas you monitor, where their information will be stored and why.

  • Create strict guidelines to restrict the use of business-provided gadgets for personal use.

  • Specify how you will respond to a lawful or third-party request to share an employee's personal information.

Wrap up  

Even after taking all necessary precautions, ethical problems can still arise, so it's crucial that you be well-prepared to tackle them. First, be aware of all the ethical concerns your business is likely to face, identify ways to detect them at the earliest, and most importantly, learn to manage such issues fairly without ignoring or denying that the problem exists. Never hesitate to seek legal advice if you're unsure of how to handle a particular situation.

Note: This article is intended to raise awareness on ethical issues in business and should not be interpreted as legal advice for making business decisions.


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