ETHICAL & LEGAL

ISSUES & CONCERNS

IN HUMAN RESOURCE
MANAGEMENT
 What are Ethical Issues?

An ethical issue is rooted in morals that call for an individual or a

company to choose between alternatives that can be evaluated as
wrong (unethical) or right (ethical). It is based upon the perception of
the rightness or the wrongness of an act or a situation and thereby
affects the society or other individuals. An ethical issue also raises
questions of virtue and is often guided by one’s sense of the right and
the wrong.
 What are Ethical Issues?

A legal issue can be defined as a question or a situation that primarily

involves the application of principles of law. Legal issues arise due to
the in-adherence or the noncompliance with the principles of law which
can be considered as an offence against the law.
What is the difference between Ethical and Legal Issues?

Ethical issues are not governed

by a set of rules and thereby are
not punishable by law

What is legal can be unethical.

What is ethical can be illegal

 7 Ethical Issues Faced by Human Resource

1. Employment Issues
HR professionals are likely to face maximum ethical dilemmas in the areas of hiring of
employees.

Major challenges in this area are:

a. Pressure to hire a friend or relative of a highly placed executive.

b. Faked credentials submitted by a job applicant.

c. Discovery that an employee who has been with the organization for some time, is
skilled and has established a successful record, had lied about his educational
credentials.
 7 Ethical Issues Faced by Human Resource

2. Cash and Incentive Plans

Cash and incentive plans include issues like basic salaries, annual increments or incentives, executive perquisites
and long-term incentive plans:
Basic Salaries:
HR managers must justify a higher level of basic salaries or higher level of percentage increase than the
competitors to retain some employees.

Executive Perquisites:
In the name of executive perquisites, sometimes excesses are often committed, the ethical burden of which falls
on the HR managers.
Long term incentive Plans. Long term incentive plans are to be drawn by the HR managers in consultation with
the CEO and an external consultant. Ethical issues arise when the HR manager is put to pressure to favour top
executive interests over the interests of the other employees and the investors.
 7 Ethical Issues Faced by Human Resource

3. Employees Discriminations
A framework of laws and regulations has been evolved to avoid the practices of
treatment of employees based on their caste, sex, religion, disability, age etc. No
organization can openly practice any discriminatory policies, about selection, training,
development, appraisal etc. 

4. Performance Appraisal
Ethics should be the basis of performance evaluation. Highly ethical performance
appraisal demands that there should be an honest assessment of the performance
and steps should be taken to improve the effectiveness of employees.
 7 Ethical Issues Faced by Human Resource

5. Privacy
The private life of an employee which is not affecting his professional life should be
free from intrusive and unwarranted actions.
HR managers face three dilemmas in this aspect:

a. The first dilemma relates to information technology.

b. The second ethical dilemma relates to the AIDS

testing.

c. The third ethical dilemma relates to Whistle Blowing.

 7 Ethical Issues Faced by Human Resource

6. Safety and Health

Industrial work is often hazardous to the safety and health of the employees.
Legislations have been created making it mandatory on the organizations and
managers to compensate the victims of occupational hazards. Ethical dilemmas of HR
managers arise when the justice is denied to the victims by the organization.

7. Restructuring and layoffs

Restructuring of the organizations often result in layoffs and retrenchments. This is
not unethical, if it is conducted in an atmosphere of fairness and equity and with the
interests of the affected employees in mind. If the restructuring company requires
closing of the plant, the process by which the plant is chosen, how the news is to be
communicated and the time frame for completing the layoffs is ethically important.
Top 7 Legal Issues Faced in Human Resources Management
1. Confidentiality

2. Verification
3. Special Company Strategies
4. Workplace policies on different health issues
5. Labour Rights and implications
6. Tax Laws Of Organization
7. Laws of the Organization
Labor Code of the Philippines

It’s been said that “ignorance of the law excuses no one.” This is especially
significant for employers and their HR personnel who need to know the
essential labor laws to ensure their employees’ well-being and the
organization’s compliance with the law.

Labor laws were established to protect and safeguard the rights of employees
in the workplace. Employers should observe these and abide by them lest they
want to get in trouble with the law.

https://blr.dole.gov.ph/2014/12/11/labor-code-of-the-philippines
 The Basic Rights of Filipino Employees

1. Equal Work Opportunities for All

2. Security of Tenure
3. Work Days and Hours
4. Weekly Rest Day
5. Wage and Wage-Related Benefits
6. Female Employees
7. Payment of Wages
8. Employment of Children
9. Safe Working Conditions
10. Rights to Self-Organization and Collective Bargaining
 Employment Types in the Philippines

1. Regular Employment
2. Casual Employment
3. Probationary Employment
4. Project Employment
5. Seasonal Employment
6. Fixed-term Employment
Government-mandated Contributions
and Benefits
1. Social Security System (SSS)
2. Home Development Mutual Fund (Pag-IBIG)
3. Philippine Health Insurance Corporation (PhilHealth)
4. Leave Benefits
a. Sick Leave
b. Vacation Leave
c. Parental Leave
d. Bereavement Leave
e. Special Leaves
5. Benefits:
a. 13th-Month Pay
b. Overtime Pay
c. Premium Pay
d. Night Shift Differential
e. Separation Pay
f. Retirement Pay