Spiritual and
Ethical Issues Religious and Ethical Challenges of Money [5] by Dr. Meir Tamari QUESTION: "Reuven is an employee of Shimon's and a major part of his job is traveling abroad on his behalf. Resulting from Reuven's travels there are now accumulated mileage points that the airlines give to their frequent fliers. These give reduced fares or even free flights to the beneficiary and my question is to whom does the mileage points and thus the benefits accrue; to the owner or to the employee whose flights earned them? Would your answer be different if Reuven advanced the funds for the tickets, to be reimbursed later by Shimon"? ANSWER: "You may consider this to be similar to the case in which the seller gives a present to the buyer (Ketubot 96b). There we make a difference between those instances where the seller is selling at a definite fixed price or conditions, and those instances where everything fluctuates. In the latter case, the gift belongs to whoever provided the funds and so is the cause of the whole transaction. In the former case it belongs to the employer, since one is not allowed to profit from some one's money or from their name without compensating them (Rabbi Yitschak Alfasi, Fez, N. Africa, 1013-1103). However, according to the Shulchan Arukh (Choshen Mishpat 183:6), if the agent advanced the funds, they should divide the gift, since although he owns the money that made the sale possible, the agent generated the transaction. However, our case has no resemblance to that discussion. The benefit given by the airlines is a condition of the sale and so is something known and fixed. [It is not meant as a gift but is tantamount to a reduction in price and so is a condition of the sale]. Therefore, it belongs to the one who generates that sale, in this case, Shimon." [Teshuvot Shevet Levi 308; Rabbi S. Wozner, Bnei Brak]. The whole nature of benefits to employees, managers, agents and consumers, raises a host of ethical issues and this seems the place to raise them even when we do not always have legal answers, as we had in regard to the mileage benefits. Gifts given to buying agents or to public sector employees and elected officials who determine the allocation of permits, licenses or the participation in public works, are often nothing more than bribes. So too, private gifts to teachers. Benefits to consumers are essentially a form of [non-price] competition and are halachically permitted in all those cases where competition is fair. "Rabbi Yehuda holds that there is an element of robbery in benefits given by a storekeeper, as their whole purpose is to steal or entice away consumers. The Rabbis argue that it is not unfair or fraudulent as all parties can easily duplicate or substitute these benefits" (Bava Metzia 4:12). However, all agree that they are not permitted where they cannot be duplicated by the competitors, as, for instance, where one can sell cheaper or can offer other benefits, only because he is illegally avoiding conditions imposed by an outside factor such as V.A.T. or import duties. This would also apply to those not having the required licenses such as taxi medallions or academic accreditation. There is a further ethical issue of fraud and theft when the employee or agent abuses the benefit for their own purposes or profit. From the Torah, workers can eat from the produce that they were working with (D'varim 23:25-26); that in subsistence economies was a great social benefit. However, they may not abuse that right, take it home or give it to members of their family; that would be fraud. Many of the perks enjoyed by workers today pose the same problem. Where it is left to them, workers able to buy their own tickets all too often will buy the most expensive ones earning mileage benefits at the employer's expense, and then using that benefit for themselves. Owner-managers in closely-held or family held firms usually draw their return on capital in non- dividend forms in the form of expenses, registered in the firm's accounts as tax deductible business expenses, but actually private benefits of travel, entertainment, etc.; these in addition to inflated salaries. They thereby defraud not only the tax authorities but also other share- holders who, not being active in the daily running of the firm, are unable to benefit from these non-dividend forms of profit distribution. In managerial remuneration, in large listed corporations, managers often set their own salaries or grant themselves perks such as costly headquarters or costly artwork and expensive office furnishings, ostensibly for the firm's benefit but often for their own prestige and benefit; all of these are a reduction in the shareholders profits that the shareholders are usually powerless to decide. Stock options not geared to increased profits or output too, have an ethical problem of theft, since they are meant to give the employees an incentive to work, something for which they already were paid a salary to do. Regarding the legitimate benefits or perks given to employees, we would have to decide whether they are to the employees benefit or not; in the latter case they would be forbidden. The Talmud permits payment of debts in near money, when the debtor has run out of cash, since the creditor can easily and at no cost realize the alternative forms of payment. This included payments in kind like immovable property, spices that were rare and costly, camels and cloths etc (Baba Kama 7a and 14b). This was not allowed in the case of wages; these had to be in paid in cash. This ruling was based on the assumption that the workers would suffer a loss in money or time if they had to sell the goods that were paid in lieu of wages. Therefore, we may conclude that whenever the benefits or perks involve the recipients in a present or future loss, real or only anticipated, then they would be forbidden. 19th century industry in the U.K. and the U.S.A. was often based in company towns where the workers not only lived in housing belonging to the employers but bought in their stores, sent the children to be educated in their schools, read their newspapers and, as often as not, voted as they were told. Where the stock options, pension benefits, corporate cars, vacation facilities and liberal health schemes that are common all over the world are not transferable, the employees often find themselves in a golden cage that makes mobility almost impossible. It is doubtful whether Judaism that teaches that Jews are servants only to G-d, could approve such servitude. [The Parshat Vayeitzei Homepage]
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