Charlie and Iris are working in the same company but a different department who meets during lunchtime to discuss about their work. Today Iris discussed about a new position being created and Human Resources department starting advertising the position. Charlie then tells Iris “ I have a friend who runs a placement service and an find the right person. Once the position is filled, I will split the finder’s fee with you”.
Iris knows that her company may pay as much as half a years’ salary for the placement services. Charlie’s friend is likely o pay him a substantial amount if Iris awards the placement contract to them. If she can get a good employee and a little extra money on the side, everyone wins.
However, Iris is not comfortable with such an arrangement, and she’s pretty sure it’s against company policy. If this comes to pass, is Charlie or Iris doing anything illegal? What’s ethically wrong with Charlie’s proposal?
Under Australian labour law, the hiring process has to be competitive, transparent and free of discrimination or any other outlawed activities. However, as Charlie suggests in the case study, he aims to have Iris award the placement service tender to a friend of his. This would allow and facilitate the friends firm which runs placement services to land this project without any competitive activity.
Furthermore, as the state in the question, this would be directly in violation of company policy. Equally, the decision would not have been made objectively and as part of corporate strategy to award the tender in this manner, but as part of dubious, underhand dealings between the two with mooted economic gains in the end. The finder’s fee would be the illicit wealth split between the two – Charlie and Iris.
What Iris is suggesting to Charlie runs counter to legal, ethical and company norms. Charlie is right to feel uncomfortable and reject this option as it will be in direct violation of company policy. Such violation may attract severe penalties to Charlie, sanctions which may far outweigh the finder’s fee that is to be split between them. It may do more reputational damage to Charlie and Iris, or even wrap in the friend’s employee placement firm.
Moreover, the mooted actions of Charles are likely to constitute illegalities in legal terms. What Charlie is driving at will likely be seen as a form of collusion as there is a direct economic benefit for the underhand deal, which is dubious and deceitful in the means it will have been achieved.
This could expose the two individuals to criminal prosecution. It may also attract them hefty fines as a result.