The right to termination of employment is a foundational issue for a code of ethics governing employment relations. The majority of the private workforce in the U.S. is employed “at will” (Bowman and West 2007, 119).
At-will employment means that either side can terminate employment for almost any reason, or even no reason at all. A central concern for business ethics is whether at-will employment is fair.
What is At-Will Employment?
In ethics, at-will employment refers to the doctrine that either the employee or the employer can choose to terminate employment for any reason or no reason whatsoever. This is contrasted with just-cause employment where only some reasons for termination are acceptable.
Legally, at-will employment is considered the default employment contract in many U.S. jurisdictions. In such cases, employees are considered hired at-will unless they can prove otherwise. In practice, at-will employment is almost always regulated to a certain degree. For instance, the U.S., the U.K. and Canada all have laws which protect employees, even those hired at-will, from termination due to discrimination. Only a qualified, local, legal professional can offer advice as to actual contracts governing employment and what reasons for termination may be legally unjustified.
This article will very briefly introduce some of the considerations for and against at-will employment from an ethical standpoint. Since the employer seems to hold the balance of power, it can be argued that the ability to terminate employment benefits the employer more than the employee. Thus a primary issue in business ethics is whether at-will employment is fair to the employee.
At-Will Employment: Minimal Regulation of Termination
At-will employment is often (but not exclusively) supported with reasons that focus on its consequences. Such theories include a broad range of considerations, including economic, in determining whether at-will employment is beneficial to society. For example, it can be argued that fear of termination acts as a motivation for the workforce; this has the consequence of greater productivity. It can also be argued that at-will employment provides opportunities for people who would otherwise have trouble getting hired. Putting such reasons together, a consequentialist argument will make the case that at-will employment provides, on balance, more benefit than harm to employers and employees alike. It is important, however, that the interests of those affected be considered impartially in order for this to be a valid ethical argument.
Evidence that at-will employment is beneficial requires empirical support; as such, it is often contestable. For example, it is arguable whether fear of being fired is an effective motivator. Although supporters of at-will employment often make comparisons of jurisdictions which implement varying degrees of at-will employment, it is often difficult to employ such evidence in causal arguments (i.e. that at-will employment really is the reason for beneficial consequences).
Just Cause Employment: Increased Regulation of Termination
Arguments from rule-based ethics seem well suited to defending just-cause over at-will views of employment. Rule-based ethics focus on the principles which guide ethical decision making. In the case of at-will employment, it can be argued that a principle which allows for at-will contracts prefers the employer’s rights over the rights of employee’s. This can plausibly be supported by Kantian ethics – allowing for employees to be arbitrarily dismissed amounts to treating them as nothing more than a means to the employer’s end. The employer’s ability to terminate a contract without reason undermines the employees potential to set and achieve goals for herself as an autonomous rational agent. The employee’s ability to terminate employment without cause, on the other hand, has comparatively little effect on the company’s ability to set and achieve its ends.
Even if one is swayed by these considerations, however, it can be hard to see exactly what they amount to. There are obvious cases where a reason for termination is just (blatant incompetence), and cases where a reason is unjust (racism or sexism) but there are also many reasons which are hard to determine. Furthermore, after sorting out the gray-areas, it might be hard to enforce them through law or policy. A dishonest company (or manager) is likely to also lie about the reasons for termination.
Forming a Code of Ethics
Businesses might be prone to a consequentialist approach as it seems aligned with the idea of businesses as goal-oriented entities rather than rational agents. This is perfectly valid just so long as the interests of employees and employers are considered with impartiality. Impartiality does not always result in equality. For example, an at-will employment contract may be in the interest of employees whose work is of a temporary nature but not in the interest of those with a more stable position.
Rule based approaches have an advantage in needing less evidential support. They have the drawbacks of any policy-based approach in that it is sometimes difficult to apply broad principles on a case-by-case basis