MGMT3701 Study Notes
1. What Is Labour Law?
Labour Law: The Regulation of Work
• Workplace = site of complex interactions btw employers/ees, state & rep. bodies
• Pluralist view of society à these interactions need to be regulated o Codify the rights/obligations of parties
• Developed as academic discipline in 1950s:
“A body of legal rules – formal & customary – that order & regulate labour for ‘specific goals’” (Johnstone et al, 2012:1)
“Labour law encompasses a broad & amorphous body of rules and regulations that govern an enormous array of features of the working lives & economic welfare of workers and their families” (Donohue, cited in Pittard and Naughton, 2015:2)
“Provide[s] a legal framework within which collective industrial relations may take place between workers and employers. And in supplementation of that framework, the role of the law has been, to varying degrees, to provide minimum legislative standards for employees, the protection of individuals against workplace discrimination and the maintenance of standards of health and safety in the work process and environment” (Mitchell and Wu, 1997)
• Recognition that labour law must be situated to the society & workplaces that it seeks to regulate
• Rejection of focus on ‘black letter law’, narrow examination of case law, precedents,
& technical issues (Dabscheck, 1998: 6).
Competing Philosophies of Labour Law Protective View
• Recognition that parties do not have equal power:
o Common law offers insufficient protection, is expensive, advantages those with most resources
o Contract law assumes equality between parties
o Labour law can provide protective capacity in 2 main ways:
§ 1) Laws that structure & regulate the enterprise bargaining process
• Create ‘level playing field’
• Allow less powerful to have a say (freedom of association)
§ 2) Laws for those unable to bargain
• Set minimum standards
• Prevent ‘race to the bottom’
Market View
• The market represents ‘the natural order of things’
o Law should not interfere unduly in contract making
o Law should facilitate negotiations of the sellers & purchasers of labour o But can the state maintain neutrality? I.e. in protecting the ‘free market’, do
they limit the power of those who try to organise themselves within it?
MGMT3701 Study Notes
Consequences & Contradictions
• Social cohesion
o Notion that job entitles worker to a decent standard of living o Threat of social discord when exploitation apparent/economic flux
• Protection
o Recognition that bargaining power, resources are not equal o Mechanisms to redress inequality of bargaining power o Codify minimum standards
• Redistributive justice
o Set/monitor distribution of wealth (decent wages, safety, bargaining power) o Set limits on exploitation (child labour laws)
• But the law also protects employers’ interests:
o ‘A realisation that labour law may be concerned with other issues – such as
‘economic management’, or the protection of (employers’) property rights’
moderates scholarly claims that social justice is the only rationale (Dabscheck, 1998: 6)
o Law often represents conflicting principles: business efficiency vs. worker protections
o Law has a disciplining effect: prevent strikes & restrain wages The Shaping of Labour Law Legislation (Naughton, 2014)
• Thesis that there are 4 core elements underlying the Australian IR system which became part of the ‘Australian psyche’:
o Oversight role for an independent statutory tribunal o Public interest taken into consideration
o Tradition of ‘protecting the weak’
o Trade unions balance the bargaining power of parties
• ‘Fairness’ as underlying principle
• Naughton argues that, despite EB, these elements must remain in place:
o Role of tribunal in agreement-making
o ‘No disadvantage’ test is a mandatory requirement for agreements o Award & minimum standards continued to protect the weak o Unions represent employees and are entitled to recognition Where Did Labour Law Originate?
• Early labour laws were about control of workers
• Growth of democracy/liberalism required more ‘even-handed’ approach:
o Provides apparent benefits for both sides o State as ‘independent umpire’
o Allows parties to seek rule change in their interest
• In Australia, the collectivist legal approach embodied in the tribunal system overrode the individualistic, contractual approach of the common law... for a time
Current Questions
MGMT3701 Study Notes
• Is a 21st-century worker very different from the industrial worker of the 19th and 20th centuries?
• Is the law of work becoming merely a sub-section of commercial/contract law?
• Is the distinction between an employee and a contractor becoming less relevant to the modern workplace?
• Should the responsibility for setting minimum standards lie with the market or the state?
• Can the nation state have influence when the content of law varies according to social, economic, geographical, and political circumstances?
• Is there a moral/ethical dimension to such debates?
Is Labour a Commodity?
• Flanders (1974) argues that debates about the employment relationship comprise 2 key elements: market & managerial relations:
o 1) Market relations:
§ Labour as a commodity
§ Key driver of labour law change = contest re: whether labour can be viewed as a commodity
o 2) Managerial relations:
§ Labour as a potential power (embodied in the worker)
§ Purchaser of labour as a commodity doesn’t have complete power over its exercise
§ Employer has to ‘persuade’ through rules, culture, bribes, etc.
§ Unlike other commodities, the employment relationship is mediated by third parties:
• State regulation
• Trade union & power to represent/intervene Is the Employment Contract Made Freely?
• Liberal view that in capitalist society individuals are free, sentient beings, capable of choosing their life course
• Locke argued that private property was essential for liberty: ‘every man has a property in his own person. The labour of his body, and the work of his hands, we may say, are properly his’ (Locke, 1689: 27)
• The notion of choice is often upheld by FWC today: when newly hired workers agree to poor contractual terms, rarely will it be determined that they were deceived Is Labour a Commodity?
Supporting Arguments:
• Every individual free to act according to calculations of self-interest
• A notion of free choice underpins assumptions that both parties benefit from contracts into which they freely enter, because individuals would not enter a contract from which they do not benefit
Opposing Arguments:
• The ability to labour is an intimate part of a person, not to be traded like property (Polanyi, 1944)