SECTION B OE Answer the compulsory questions from this section 4. Pekka has discovered that many fishing businesses in Finland and neighbouring countries pay their trawler crew members by hourly wages, whilst others use a piece-rate payment system which rewards workers based on the volume of the fish caught at sea. In order to improve the liquidity position of the business and to remain competitive, Pekka is considering the introduction of a time-rate payment system for the trawler crews. At a recent meeting with Tapio and their parents, Pekka proposed the following changes, to take effect from May 2020: Trawler crew members are to be paid $15 per hour (higher than the industry average) whilst they are out at sea. When adverse weather prevents the crews from going out to sea, they will receive payment of $8 per hour, but may be expected to help at the office or warehouse. Trawler captains will remain as salaried employees, but this will be reviewed on an annual basis. Due to stricter laws on overfishing and fishing quotas, bonuses will no longer to be paid. SODE Tapio is against these proposals and believes PST should continue to pay good salaries and bonuses (lines 63 - 64), Shae and Patsy are in support of Pokka as he takes full responsibility for all activities related to the company's trawlers and crews (lines 20-21). Pekka is not worried about labour turnover, given that only 3 people left the company in 2019. He also stated during the meeting that the fishermen are unlikely to move to jobs in other markets, such as the technology industry, due to the lack of suitable skills Pekka strongly believes that if the changes are not implemented, some employees will have to be made redundant by the end of the year. The family members do agree on one thing - change is needed due to the growing concerns about environmental sustainability in the commercial fishing industry. (a) Define the term environmental sustainability (line 20). [2 marks) 12 marks] (b) Calculate the labour turnover rate for PST in 2019. (c) With reference to Appendix 1 calculate the following financial ratios for PST in 2018 and 2019: (1) current ratio quick ratio. [2 marks] [2 marks) (d) Outline one external constraint on PST's operations. [2 marks] (e) Using the case study materials and additional information in this section, discuss the costs and benefits for PST if it implements a time based payment system for the trawler crew members. (10 marks)