I.

Introduction

Ethics has been an important issue in business organisation, specifically in Human Resource Management (HRM) for a long time. Along with the innovation of HRM, ethics is perfecting itself and affect many aspects in organisation. The Fair Work Act (2009) has been defining an ethical framework that covers the rights for employees and support employers in managing people. This essay will further demonstrate the ethics theories as well as their application in HRM, and the changes brought by FWA (2009) and their effects on organisation.

II.

Body

1. Ethics
Ethics is defined as a general term referring to both ethical theory and moral beliefs (Kramar et al, 2010). Normative ethical theory offers different moral theories, each proposing a set of moral rules that individuals can apply in the process of judging whether an action is morally right or wrong in various situations (Weber, 1990). Applying ethical stances to HRM is to make significant assumptions about the aim of the organisation, the roles and responsibilities of managers, and the obligations and rights of employees. Utilitarian theory holds that moral worth of practices or actions is determined merely by their consequences. Utilitarianism is performed as the maximisation of the good and the minimisation of harm and evil (Beauchamp and Bowie, 1993). From a human resources management perspective, the managers should consider whether the agreement between the employer and the employees affects other people (Schumann, 2001). However, utilitarianism and HRM face some problems in proving their outcome is indeed the maximisation of utility

for those affected. Those problems could be listed as the question of who is affected, the problem of identifying outcomes, and issue of determining the interests of others (Greenwood, 2002). Kantianism theory is defined as one must act in such a way that you always treat humanity, whether in your own person or in the person of another, never simply as a means, but always at the same time (Kant, 1964). Treating people as a means is to regard them as something we use for our own purposes without their full and free agreements. Kantianism drives people to treat a person as end-in-themselves; which means provide them with some of the endthings needed for their sustenance and well-being (Greenwood, 2002). Such practices include training and skill development, participation and empowerment and teams development. Virtue ethics, which are different from the Kantianism, focusing on the principles of action and utilitarianism, aim to the person who performs the action but not on the action. Virtue ethics can be said as a necessary complement to Kantianism and utilitarianism theories (Kramar et al, 2010). However, as virtues are different from one society or situation to another, a change in strategic orientation in HRM can cause a corresponding change in the virtues valued in human resources managers. Justice ethics are based on the duty to treat all parties fairly and to distribute risks and benefits equitably (Kramar et al, 2010). Justice refers to evaluation and revision against nondiscrimination, equality, fairness and retribution. Rights ethics mention the moral protection of vulnerable people. Employees should be protected in the workplace from practices that transgress human dignity and self-respect has translated into the promotion of employees right for non-discrimination, safety and freedom of speech among others (Kramar et al, 2010).

The stakeholder theory of the corporation, developed by Freeman (1984), stated that all those who have a stake in or claim on the organisation have equal rights and responsibilities within organisation. Employees are seen as unique stakeholders by virtue of their investment of intellectual, physical and emotional labour in the firm and the risks involved in making such investments (Kramar et al, 2010). Since there is no clear, or any singular critical way to be presented as a standard across the board for any organization as every organization has its own culture, the developing and embedding of an ethics system could be different from organizations. However, as the ethics system must be implemented pragmatically and with appropriate caution for the expectations, needs and personalities of the stakeholders, the human resources managers should balance the justice ethics and the right ethics in order to ensure the human rights of stakeholders as well as provide an appropriate justice that can best-off the employment relation (Schuman, 2001). Kramar et al (2010) also stated that the discussion of human rights, which is prevalent in the twentieth century, leads to the focus on moral protection of vulnerable people of business ethics.

2. Fair Work Act (2009)

The Fair Work Act (FWA), passed on March, 2009, retains many features of WorkChoices from Howard Government. However, the FWA provides many changes in the practice of employment relations and human resource management. This legal system offers the safety net that covers the employees rights, improves the employees bargaining through the unions and reduces the capacity of managers to make decisions unilaterally (Kramar et al, 2010) Although there were many laws in Australia that require employers to meet the minimum requirements from substantive entitlements to more procedural, the FWA gives a more specific meaning to the term safety net. By following the Five Australian Fair Pay and

Conditions Standard established by the Howard Government, The FWA releases the National Employment Standards, covering ten standards. These standards provide employees the right to require flexible working hours, information statement on their rights, minimum notice of termination and redundancy, and entitlements upon commencing employment from their employers (Kramar et al, 2010). Apart from NES, safety net came through modern awards. Awards modernisation process is the continuous part for the awards rationalisation started from Howard Government. The modernisation process replaced 1560 previous state and federal awards by 122 modern awards which mainly covered single industries rather than occupation (Kramar et al, 2010). The modern award system provides a simpler, more comprehensive and more understand safety net. Hence the minimum employees entitlements contained in awards are understood and complied better by employers. The FWA provide the bargaining in good faith, which allow unions much easier in engaging employers in collective bargaining and seeking the assistance of Fair Work Australia if employers are not bargaining in good faith (Forsyth and Stewart, 2009). By abolishing the individual statutory contracts, unions gain more independence from employers. Unions can be easier to represent their members with the right of entry. Furthermore, unions can cover their members interests thanks to the NES and the stronger unfair dismissal laws. Unions can turn to FWA, as an empowered industry umpire, for assistance in solving disputes and forcing compliance (Kramar et al, 2010). The Fair Work regime is not only favourable to unions than the old conciliation and arbitration system before the 1990s, but also contains a number of restrictions on unions that were introduced under WorkChoices (Kramar et al, 2010). Unlike the old conciliation and

arbitration system, under the new legislation, employees are free in joining union and have the rights to whether nominate the union as their bargaining representative. Last but not least, the managers prerogatives in making decisions are significantly reduced due to the cumulative effect of the Fair Work regime. By diminishing statutory individual contracts, strengthening the safety net, encouraging collective bargaining and limiting the opportunities of employees in opposing union representation, the power in relationship was shifted away from managers (Kramar, 2010). The FWA restored protection from unfair dismissal by expanding the coverage to all employers, except the small employers who manage less than 15 employees. The new unfair dismissal did not intend to prevent managers from dismissing employees. Under the new laws, employers were required to introduce decision-making procedures within their organisations to ensure the fairness of employees and allow employees the right to challenge managements decisions if they felt unsatisfied (Kramar et al, 2010).

III.

Conclusion

In this essay, the top five ethical theories and the implementation of FWA as well as their effects on HRM has been discussed in details. The FWA is one big step in applying the ethical theories in HRM.