Ethical Dilemma

1. Worker Exploitation vs. Meeting Demand: Top Glove, a Malaysian rubber glove manufacturer, is
accused of underpaying and deceiving factory workers to meet the increased global demand for
rubber gloves during the COVID-19 pandemic. On one hand, there's a need to produce an essential
medical supply to meet the increased demand and help protect healthcare workers and the public.
On the other hand, exploiting workers by underpaying them and deceiving them about their rights
and working conditions is unethical and goes against principles of fairness and workers' rights.

2. Health and Safety vs. Profit: Ensuring the health and safety of workers is a fundamental ethical
responsibility for any company. The COVID-19 pandemic adds an additional layer of concern, as
working conditions that put employees at risk could contribute to the spread of the virus. Prioritizing
profit over the health and safety of workers is ethically questionable and can lead to significant harm.

3. Transparency and Honesty: Deceiving workers about their rights and working conditions raises
ethical concerns related to transparency and honesty. Workers have a right to accurate information
about their employment and the conditions they will be working in. Misleading them undermines
their ability to make informed decisions and can lead to exploitation.

4. Legal Compliance vs. Ethical Responsibility: While a company might argue that it is following local
labor laws, this doesn't necessarily absolve them of ethical responsibility. Ethical standards can
extend beyond legal requirements, and businesses should aim to uphold both legal and ethical
standards in their operations.

Why did the company behave in such manner?

1. Profit Maximization

All the companies might prioritize their bottom line and profits, leading them to cut costs by
reducing wages and benefits for workers. Top Glove also not under exception.

They have generate huge profit during the pandemic time. Based on the Straits Times (2020), Due to
strong demand for gloves, production efficiency improvements, and higher selling prices, Malaysia's
Top Glove Corp reported a more than 20-fold increase in first-quarter net profit on Wednesday (Dec.
9), exceeding record earnings from three months prior.
https://www.straitstimes.com/business/companies-markets/top-glove-posts-2030-jump-in-
quarterly-profit-to-781-million

Pandemic trend has aids Top Glove to higher level and it also takes the opportunity to hit the field.
They could have explored new markets or expanded their distribution networks to reach more
customers and increase sales. Then, the production has to increase to meet the surge in demand for
rubber gloves. They need more labour to meet the market need.

2. Labour shortage
Meanwhile, they meet labour shortage during this pandemic. The Straits Times (2020) also
mentioned that Following an outbreak in which more than 5,000 of its employees tested positive for
Covid-19, Top Glove gradually closed parts of its operations in Malaysia last month (Nov 2020).

3. Global Demand and Competition

Within the labour shortage, they also facing the pressure from the other competitors and the
increased demand for rubber gloves during the pandemic. This pressure could lead to shortcuts
being taken in worker treatment as they want produce more gloves at a faster rate. They might have
feared that prioritizing worker safety would lead to slower production and loss of market share to
competitors who were willing to take greater risks. Then, they take advantage of lax regulatory
oversight or enforcement to engage in unethical practices. As workers in such situation also have
limited bargaining power due to economic conditions.

4. Medical facilities lack supply

The global demand for medical supplies, including rubber gloves, increased significantly during the
pandemic. Companies like Top Glove might have faced immense pressure to meet this demand
quickly, potentially leading to compromises in safety protocols.

They have donated 2.5 million pairs of medical gloves to help battle the COVID-19 outbreak.
https://www.topglove.com/single-press-release-en?id=111&title=top-glove-lends-helping-hand-to-
support-war-on-covid-19

Other than that, the pandemic disrupted supply chains and logistics, making it challenging to source
raw materials and maintain normal production processes. This disruption could have forced
companies to prioritize output over worker. Top Gloves playing the significant role here, therefore,
they would be strict and ignore the employee’s safety to continue supply the raw material.

They have feared that prioritizing worker safety would lead to slower production and loss of market
share to competitors who were willing to take greater risks.

Solutions: [https://www.topglove.com/continuous-improvement-report]

1. Increased Benefits Visibly & Intrinsically: Top Glove announced plans to improve benefits for
their workers from external & internal factors. This included raising basic salaries, providing bonuses,
and enhancing other intrinsic values =>

-Ensure high quality welfare, health, working conditions, and living accommodation for their
workforce;
-Comply with labor standards to ensure fair treatment of workers and their human rights by engaged
with stakeholders like labor rights groups, government agencies, and non-governmental consultants
to address concerns and improve worker conditions

a. FAIR RECRUITMENT PRACTICES OF FOREIGN WORKERS

i. Continue to work with the relevant Ministry and Government agencies, to

strengthen existing regulation and related standing operating procedures, to continuously enhance
the workplace and living conditions of workers

ii. Appointed Impact, an independent and highly respected ethical trade

consultancy, to review their policies and procedures in order to ensure workers receive the right
support and are properly treated by recruitment agencies

1. Any recruitment agency that does not meet the best practices set by Impactt or in any way
mistreats workers will be blacklisted by Top Glove.

2. Also, engaged with seven principled recruitment agencies from Malaysia and abroad

iii. Operated Zero Cost Recruitment Policy since January 2019 to clear the debt
bondage, one of the forced labour indicators. They bear all recruitment related fees by ensuring that
all workers not pay recruitment fees during the recruitment process with Top Glove

iv. Remediated workers who have previously paid recruitment fees to agents at
their source country and included all those who have joined on or after January 1, 2019, even those
who have left our employment

v. Adopted a robust due diligence procedure (encompassing checks on

business background, practices, and processes) to ensure potential agencies fully comply with the
Sedex Members Ethical Trade Audit (SMETA) and/or the Business Social Compliance Initiative’s (BSCI)
code of conduct, as well as applicable local laws and regulations

vi. Reimbursed a total of over MYR 150 million to our workers in relation to
recruitment agency fees started on 10 August 2021 and had made the final lump sum payment of
this on April 2021. This covers more than 13,000 foreign workers

b. FAIR WORKING HOURS AND WAGES OF WORKERS

i. Rewarded respective workers with additional outstanding performance

payment totalling RM3.6m for their contribution in 2020 and 2021, also with workers’ yearly bonus &
performance incentive

ii. Tightened the monitoring processes to ensure one full rest day each week
and nobody works more than four hours overtime per day. These processes are being verified by
external audits and by the Malaysian government authorities

2. Improved Accommodations: Top Glove pledged to enhance the living conditions of its
workers by upgrading their accommodations and addressing issues related to overcrowding and
hygiene => ensuring their welfare, wellbeing, and happiness

a. CONTINUOUS IMPROVEMENT OF WORKERS’ ACCOMMODATION

 i. Adhering to the legal requirements of the Workers’ Minimum Standards of
Housing and Amenities Act 1990 (Act 446) to ensure workers live in a decent standard of
accommodation

ii. Moved workers to more suitable accommodation, ensuring full compliance

to social distancing (differentiate with male & female and distancing measures in cafeteria during
pandemic) within the accommodations, and the availability of all required amenities and facilities at
workers’ accommodations with investment on storey houses and hostels with full facilities.

1. Example of amenities for hostels: barber shops, prayer halls, mini market, ATMs, laundromat,
recreational areas, etc.

iii. Have newly established a Hostel Management Committee in December 2020

to manage workers’ accommodation issues including hostel inspection, hostel maintenance, hostel
set up in compliance with Act 446

iv. Other plans: Increasing investment on purchasing and renting additional

facilities and accommodation for workers nationwide approximately to RM232 millions of funding
and 11,404 pax of workforces.

v. [https://www.topglove.com/storage/sustainability-continuous-
improvement/34.3%20Continuous%20Improvement%2020.12.2022.pdf]

3. Regular Audits and Monitoring: The company conducted audits and assessments of its
facilities to identify and rectify any violations of labor standards or exploitation of workers.

a. Audits:

i. Completed more than 100 international external audits at Top Glove’s

factories since January 2019

b. Monitoring:

i. CONTINUED SAFETY AND HEALTH OR OUR WORKFORCE

1. Needed to extend comprehensive health services to all employees by undertaking regular

comprehensive audits of our facilities and practices by independent experts => expanding Top Glove
Wellness Team from perspectives of medical, wellness and fitness professionals on regular health
services, establishing whistle blower system with native languages to report on health safety issues &
installing additional security systems like CCTV

2. Commissioned ethical trade consultancy Impactt to monitor and audit on resolving 11 forced
labour indicators issued by the International Labour Organisation (ILO) among their direct employees
and foreign workers

ii. MORE STRINGENT SAFETY MEASURES FOR OUR WORKFORCE POST COVID-
19

1. Supported the Special Committee on COVID 19 Vaccine Supply to have all their local staff and
foreign workers will be guaranteed free access to vaccines under the National Immunisation
Programme & registered with Ministry of International Trade & Industry (MITI) for the industrial
phase onsite vaccination programme for their employees in order to increase higher vaccination rate
in Malaysia.

4. Transparency Initiatives: Top Glove took steps to improve transparency by sharing

information about their efforts to address worker welfare and the steps taken to rectify the issues.

a. Committed to work with ethical recruitment agents to safeguard their workers benefits
specifically for foreign workers. We practice transparent and fair open tender process with clear
Tender Notice for Recruitment of Foreign Worker Services.

i. Interested recruitment agencies to provide recruitment services should align

with stages achievement on Self-Assessment Questionnaire, due diligence (Eg. these workers can get
appointed under licensed sub-agents and intermediaries), mentoring and capacity building

ii. Fully commit on all related fees to the selected recruitment agencies through
appropriate lead time and fair payment timelines based on mutual agreements of both parties

iii. Established grievance helplines in worker's native languages to raise

grievance and concerns on all workers related issues included recruitment fee investigate fairly on
any reports arose and take any appropriate corrective action

iv. [https://www.topglove.com/storage/sustainability-continuous-
improvement/27052021%20Tender%20Notice%20for%20Recruitment%20of%20Foreign%20Worker
%20Services%20Final.pdf]

b. Pledged to support a set of 31 principles listed in the United Nations Guiding Principles on
Business and Human Rights (UNGP BHR)

i. To protect human rights, to have and exercise corporate responsibility, and

to provide greater remedies for victims of business-related human rights abuse

ii. For ensuring the welfare and wellbeing of their workforce of 22,000 people,
Top Glove’s must have higher commitment on following the standards of international human rights

4.0 Suggestion

1. Provide compensation to their employees for underpaying salary of employee

 to calm down indignant of employees

 Example: Provide RM250 compensation to each employee

 To rebuild the reputation of Top Glove

2. Established a feedback programme

 To understand well on which part of company’s organisation should be improved

 To improve relationship between employee and company

 To improve company’s organisation in order to achieve long-term goal

3. Top Glove should set a company policy to ensure Top Glove will not underpay employee’s
salaries.

 To build the trust between employee and company

4. Top Glove should concern on employee’s health and safety whenever the demand of Top
Glove is high or low.

 Ensure employees are not infected with Covid-19 and they are in healthy condition.

 Ensure the process of production will not be influenced due to employee health conditions.

 Establish a body check up programme for employees every year.