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ACCA Strategic Professional · Strategic Business Leader · Enabling success: talent management

Marlow Retail's supplier audit reveals that a contractor supplying its warehouse staff pays below the legal minimum wage and requires excessive overtime. Marlow's HR director argues that because the workers are not Marlow employees, the company has no responsibility. Which view is most consistent with ethical employment practice and stakeholder thinking?

Marlow should act, because contractor workers serving its operations are stakeholders and the company bears reputational and ethical exposure. Sensible responses include contract conditions, audits and remediation, rather than disclaiming responsibility on technical contractual grounds.

  1. AMarlow has no responsibility because the contractual relationship is with the contractor only
  2. BMarlow has responsibility only if the practice is first reported by the media
  3. CMarlow should act, because workers in its extended supply arrangements are stakeholders and reputational and ethical exposure remains with MarlowCorrect
  4. DMarlow should immediately bring all warehouse work in-house regardless of cost

Explanation

Ethical employment responsibility extends to those working on a company's behalf, and reputational and legal risks attach to Marlow. Appropriate action includes contract conditions, audits and remediation. Denying responsibility ignores stakeholder expectations, and immediate insourcing is an extreme response not required by the principle.

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