Business and Economics

The Ethics of Hiring and Firing




Starting in late 2007, the United States, together with much of the world, suffered a steep recession. While the economy began to recover in 2009, growth has not translated into new jobs. Two years into the recovery, unemployment in the US is still over 9 percent.

America’s employment problems have not spared the frum community, and many are unemployed, underemployed, or worried about losing a job. This issue, like all issues vital to our lives, has a Torah aspect: the situation involves employers, employees and job seekers in delicate situations that raise serious ethical questions. I get frequent questions from people in all these situations, some of which I will relate here.

The more things change, the more they stay the same. Dilemmas in employer-employee relationships are widely discussed in the Talmud. One Talmudic discussion is particularly relevant. Among other rules of fair dealing, the Mishnah teaches: “It is forbidden to paint a person.” The Gemara (Bava Metzia 60b) asks:

What is the case of painting a person? Like the instance of an old [white-haired] slave who dyed his hair and his beard. He approached Rava and said to him, “Buy me.” He [Rava] replied [with the words of the Mishnah in Avot]: “Let poor people be among the members of your household.” [The slave] approached Rav Pappa bar Shmuel, who bought him. One day [Rav Pappa bar Shmuel] said to him, “Bring me some water to drink.” He went, and his hair and beard became white [again]. He said to [Rav Pappa bar Shmuel], you see that I am older than your father.

This passage teaches two important lessons. First, as the Mishnah states and the Gemara explains, a worker is not allowed to misrepresent his qualifications when he “sells” himself to the employer. Even if the misrepresentation is passive (after all, the slave never asserted he was a young man), and even if the qualification is indirect (older people can be excellent workers, but white-haired men in the time of the Gemara were less qualified for the hard physical tasks usually demanded of household servants), it is forbidden to give a misleading impression.

Rava teaches us another lesson. He refused to buy the slave because he preferred to hire poor free men, fulfilling the mandate to make the poor members of your household. Thus, hiring workers is not just a question of finding qualified people for the task; often there is an additional aspect of helping out needy people through providing employment.

Q: I have a loyal employee whom I’m reluctant to let go, but business is so slow that he is just not earning his keep. Should I let him go or keep him on and endure the loss?

A: I think it is a wonderful credit to our community that the most common worker-related question that reaches me is not from job seekers who are trying to find out how far they can push the envelope on their resumes, but rather from employers who feel a powerful ethical obligation to keep on employees at all costs, even when it constitutes a hardship for the business. Is there any halachic limitation on firing workers?

While there are some authorities who rule that an employee has some kind of right or ownership of his job, Rabbi Dr. Aaron Levine, a”h, who was my mentor, concludes that “normative halachah rules that the employee-at-will has no legal claim for tenure,” while stipulating that “the employee-at-will is entitled to notice” (Case Studies in Jewish Business Ethics [New Jersey, 1999], p. 250). “Employment at will” means that an employer is allowed to fire a worker at any time for any reason or even for no reason—but not for an illegal or religiously invalid reason. That is the Choshen Mishpat (monetary) aspect of the question.

In normal economic times, and for normal work situations, that is often also the best advice. In my experience, when an employer is unsatisfied with the employee it is a sign not only that he is not the best worker for the job, but also that this is not the best job for the worker. The good of both parties is that the worker should move on and find the position that is best for him.

In a few places Chazal liken finding a job to finding a spouse (Moed Katan 18b; Bereishit Rabbah, Vayetzei 68:4). Sometimes after a few dates the young man or woman just reaches the realization that this match is not bashert. The same can happen in the workplace.

However, there is an additional aspect to this question, one which is usually secondary but which has special importance in today’s job market. In this question, as with so many others, the Choshen Mishpat aspect does not exhaust what the Torah has to say about the issue. Alongside the Choshen Misphat rule there is also a Yoreh Deah aspect—the tzedakah aspect.

• Giving a job to a needy person is considered a fulfillment of the mitzvah of tzedakah. If you have a worker who is not worth his keep but who may have difficulty finding a decent job elsewhere, there are many reasons to maintain that keeping him on should be very high on the tzedakah priority ladder.

• Giving tzedakah through employment is the highest form of charity. “The highest level [of charity] of all is to steady the hand of the Israelite who falters, and give him a gift, or a loan, or make partnership or offer him work, in order to strengthen his hand so that he shouldn’t have to ask” (Rambam, Matnot Aniyim 10:7). In this way the employee maintains his self-image and his standing in the community.

• Your worker should be high on the list of charity recipients. The Torah commands us to give a gemilat chesed loan to “the poor of your city” (Exodus 22:24). Chazal learned from this a concentric circle of preferred charity recipients: “A member of your nation and an alien, your nation comes first; a poor person and a rich person, the poor person has precedence; a poor relative and the poor of your town, the poor relative has precedence; the poor of your town and the poor of a different town, the poor of your town have precedence” (Bava Metzia 71a). A person whom you have worked closely with over a long period of time should be considered “the poor of your town” and, other things being equal, should be higher on the priority list than an anonymous stranger who is receiving tzedakah through a donation to an organization.

This is a very cost-effective form of charity. While your contribution or sacrifice is only the difference between what the worker is worth and what he gets paid, which is probably only a fraction of his salary, his benefit may be the entire amount of the pay, depending on job market conditions. So you get much more “bang for the buck” in this way.

Of course, this does not mean firing workers is always a problem. Sometimes workers are not only unproductive but counterproductive. In this case hiring may not be such a cost-effective way of giving after all. Furthermore, if it is obvious that the worker is unnecessary, then keeping him on may not even achieve the goal of not shaming him. If business is weak, the employer may himself not be making enough money to be giving charity generously. But if you are considering discharging a worker who will have a difficult time finding another job, then it is worth asking yourself if keeping him or her on until the job market improves may not be the best fulfillment of your charity obligation.

Q: Many businesses want to hire only currently employed workers, but it is we unemployed who really need the work. Can I word my resume so it sounds like I am still employed?

Q: I am being “downsized.” Can I indicate on my CV that I quit so that I am not tagged as jetsam?

A: As we learned from the Talmudic passage cited above, the general rule is that one may not make false or even misleading statements on a resume or job application, but the application of this rule may involve ethical challenges.

Here I will focus on one particular area: description of the conditions of discharge.

The sad truth is that getting fired is a compound burden. Most obviously it involves the loss of earnings. The discharged worker now has to look for work in a very slack job market. But even within that slack job market, unemployed workers are at a disadvantage. Employers prefer to hire someone who already has a job.

Job applicants may be tempted to hide the fact that they are unemployed. However, there does not seem to be any heter for this. The employer’s preference for an employed worker is substantive, and discriminating against unemployed workers is generally legal. Actively concealing your unemployed status would be little different than the hoary slave darkening his hair. In fact, it would be worse: having dark hair does not signal any particular age, as young people occasionally have white hair, and even older people occasionally keep their youthful color. So dyeing your hair is really a matter of appearance, as opposed to employment, an objective standard demanded by the employer.

What can be done? Human resource professionals advise to fill that hole in your resume with employment relevant activities, such as volunteer work, training, or consulting.

Another related question involves termination. Often there may be an advantage in terms of benefits for a worker who quits to declare himself as fired, while there is a job market advantage for a worker who is fired to declare himself as quitting.

Job applicants may be tempted to hide the fact that they are unemployed. However, there does not seem to be any heter for this.

Here there is more room for maneuvering. There is not really a sharp line between firing and quitting; it is usually a simple matter for a worker to make himself so unproductive that he gets fired, or for an employer to make life so difficult for an employee that he quits. It is quite common for employer and employee to negotiate the terms of a separation, including what the technical term for the termination will be. To the extent there is no legal issue (for example, defrauding the government regarding unemployment benefits), there is room for negotiation on the technical description of the termination that will appear on the resume. Of course if the applicant is asked about the terms of his separation, he must not conceal any relevant details.Job applicants may be tempted to hide the fact that they are unemployed.

The two aspects can be combined. If you have a worker who needs to be let go, perhaps he can be given an extended notice. The cost of the extra few months of salary over and above the worker’s productivity could be just the tzedakah contribution he needs to be able to find a new job from a position of strength. If the worker is not doing anything, it is not accurate to describe him as working; but if he continues his previous duties, even to a somewhat reduced extent, this is not a misleading description as long as the job description accurately conveys the function the worker continues to fulfill.

Getting back to work in this “recovery” requires plenty of resourcefulness and good fortune, perhaps more than in any other recovery in memory. Getting back to profitability is also an ongoing challenge, but both require strict adherence to Torah law and values. Job applicants need to be scrupulous about honesty in presenting their qualifications, while employers contemplating downsizing would do well to study not only their contractual Choshen Mishpat obligations but also their charitable Yoreh Deah ones as well.

Rabbi Dr. Asher Meir is a senior lecturer in economics and business ethics at the Jerusalem College of Technology.


This article was featured in the Winter 2011 issue of Jewish Action.