Redundancy as a Moral Problem

Dr. Meir Tamari

Though the reasons why companies fire employees may vary, the outcomes are typically the same. Beyond the obvious impact to the worker and his family, large-scale firings can have a dramatic effect on society. Large-scale unemployment means a drastic reduction in standards of living, poverty, and financial hardship. This is true, even if these are buffered by unemployment insurance, welfare or other social benefits. Over and above the economic aspects, there is the further psychological suffering caused to the unemployed person by society’s conception that they are redundant, since they no longer play a role in the economy. Prolonged unemployment brings in its wake malaise, personal stagnation and despair. Such human pain and suffering surely requires serious attempts to find solutions. The major question, however, is whose responsibility is it.

Does the employer have an unwritten obligation to care for his workers even when there is no economic justification for their employment? Even if this causes him great financial loss and even perhaps forces him into bankruptcy? Does this obligation flow from the mere fact of employment for which salaries and wages were already paid?

It would seem that in a Jewish perspective there is no such legal obligation over and above that flowing from contracts entered into. Employment is, after all, primarily the hiring of services or labor by one free agent from another. To obligate the employer to provide life-time employment, irrespective of the economic conditions prevailing, would also require the worker to surrender his personal freedom to find alternative employment. This is a form of economic feudalism, similar to that of the Middle Ages in Western Europe, in which people traded their personal freedom in exchange for physical security.

There is, however, a moral obligation for the employer to assist his redundant workers as acts of charity. In the first instance, this would mean retention of workers at a cost which would not cripple the firm even if it did reduce profits. After all, charity always constitutes a reduction in the profits retained by the giver, and this would be no different. Since people are not required to impoverish themselves in order to grant others charity, such retention would of necessity be limited.

There are, however, other methods whereby charity can be done to potentially redundant workers. The corporation could introduce changes in the job structure whereby white collar workers could assume unskilled positions rather than be fired. Available jobs could be shared so that all workers earn less but none would be laid off. (It is irrelevant whether this is done through a reduced work week or through a reduced work load.) During boom periods, part of the undistributed profits could be placed in reserves to provide interest free loans to redundant workers who wish to establish new enterprises. This would be fulfillment of the obligation of all Jews to extend interest-free loans.

These, and similar actions, are applications of the halakhic principle that providing the poor with a job, or with a loan to establish a business, or to enter into a partnership with him, are the highest form of charity. Bearing in mind the limitations imposed by financial reserves of the employer, it is pertinent to point out that there are forms of assistance whose costs are marginal but whose benefits to the recipient are substantial. For example, the corporation can collect and disseminate information regarding alternative avenues of employment, either locally or in other areas, about which the worker may have been ignorant. The same applies to state funded social benefits provided to the unemployed. It is often possible to use the facilities of the employer, at little cost, to retrain the workers for other jobs, or assist them in resume writing, etc.

It is important to note that the rabbinic codes rule that the individual employer also has a moral duly to draw the attention of the public officials to the needs of the poor, in those cases where his own resources cannot solve their problem. This would obligate an entrepreneur to press for government action, at the local or at the national level, for measures to alleviate unemployment. Such measures could include full employment policies, taxation for social needs, and jobs creation.

All of these corporate acts are those of charity, to which the employer is obligated like everybody else. These remedies are not, however, an entitlement of the worker pursuant to the employer-employee relationship.
Dr. Tamari is the former chief economist of the Office of the Governor at the Bank of Israel, and the founder of the JCT Center for Business Ethics and Social Responsibility.