#GTL2021 - Ruth Dukes (University of Glasgow) - Labour Law and Neoliberalism

so thank you um thank you for that very helpful introduction it's a real pleasure to be with you today thank you to all of you for your time and for your attention um in this lecture i consider the hallmarks of law and especially labour law at a time of neoliberalism i use the uk as a case study and i juxtapose two somewhat stylized accounts of labor law in the shorter 20th century and labor law today by shorter 20th century i mean roughly speaking from the end of the first world war until the election of the conservative party under margaret thatcher in 1979. the conservatives are of course the center-right party in the uk in each case i'll say something about the respective roles of states and markets in the field of work and work relations about the rule of law and thirdly about contract and freedom a basic definition of rule of law i mean to begin with anyway i'll say more about it as i go but a basic definition the principle that society is governed by legal rules so along the way i'll take the opportunity to present some findings from the research project that manueli already mentioned and i just want to acknowledge my co-authors before i do so so for much of the short 20th century it was public policy in the uk to encourage workers to join trade unions and to encourage employers to bargain collectively with the unions sector-wide collective agreements were recognised to take wages out of competition which was thought to be a good thing for as long as policy was informed by keynesian economics unions and collective bargaining were also valued for their capacity to raise wages increasing workers spending power and stimulating demand provided of course that wages didn't get so high as to cause inflation unions and collective bargaining were valued too as a means of addressing poverty and casualization the peculiarly british system of labor law in place for much of the 20th century was often described as voluntarist the role of the state as abstentionist the leading labour law scholar scholar otto confront used the label collectively fair suggesting that the state preferred to leave it to the collective parties to regulate industrial relations and terms and conditions of employment they did this through collective bargaining collective arbitration and if it came to it through industrial action in these ways trade unions and management for primary responsibility for creating and enforcing the rules that regulated wages and other aspects of work relations if the notion of collective laissez faire implied a certain neutrality on the part of the state when it came to the substance of these rules it was certainly not intended to imply state neutrality on the question of the desirability of collective rule setting and enforcement from the time of the first world war until 1979 a variety of means were employed by the state to promote unionization and collective bargaining in time the 1945 election manifesto of the labour party proved to be definitive of what came to be known as the post-war consensus in british politics in that manifesto the objective was made quite explicit of emancipating working people by placing restrictions on market freedoms so i'm quoting now from the manifesto of 1945 the anti-controllers and anti-planners desire to sweep away public controls simply in order to give the profiteering interests and the privileged rich an entirely free hand to plunder the rest of the nation as shamelessly as they did in the 1920s does freedom for the profiteer mean freedom for the ordinary man and woman there are certain so-called freedoms that labor will not tolerate freedom to exploit other people freedom to pay poor wages and to push up prices for selfish profit freedom to deprive the people of the means of living full happy healthy lives well election manifestos don't read like that anymore perhaps unfortunately but the point that i'm making by quoting from that manifesto is that it was not understood in 1945 and in the post-war decades that greater freedom for working people had to be par purchased at the cost of lesser economic efficiency and economic growth as part of a swathe of government actions intended to stimulate demand trade unions and collective bargaining were cast as beneficial too from an economic point of view good for freedom good for the economy how did the principle of the rule of law figure in this voluntarist system the first point of interest here is the existence of fairly widespread agreement or at least loudly declared opinion that the law should stay out of industrial relations under uk law the collective agreement was understood to be a gentleman's agreement rather than a contract binding in honor only and not as a matter of law its breach by either side might well result in industrial sanctions including strikes and log pipes but there could be no legal action for breach of a collective agreement and no legal remedy i'm oversimplifying here a little but the basic point is true even under this so-called voluntarist system however collectively agreed norms were morally binding meaning that they had something like the force of law there were rules these were of general application and they were mostly respected by the affected parties british industrial relations was accordingly understood to be rule bound and ordered mature as khan point putit writing in 1957 did the rule of law provide legitimation of the system in that case i believe it did indeed it was precisely a perception of the breakdown of the post-war rule-based order in the late 1960s which eventually led to rather sweeping legislative change in 1971. of course the notion was also important in terms of legitimation that the collectivist system was democratic in nature it was democratic because it involved workers through their unions in the setting and enforcement of the rules that govern their working relations and working lives so i think this was a particular understanding of the rule of law which ties the notion of law to democratically and past laws democratically and set laws how did contract figure in the british voluntary system according to confront the contract of employment was the cornerstone of the whole system of labour law this was because in the eyes of the law at least it was the agreement of a contract which created an employment relationship it was the contract which constituted the two parties as an employer and employee with certain legal rights enjoyed and obligations owed accordingly in the british case this included first and foremost the collectively negotiated rules found in the collective agreement once you as a worker had agreed on a contract with an employer the rules of the relevant collective agreement applied to you and to it in addition to being contractual relations work relations were recognized by scholars like khan freund to be relations of subordination it followed that contract was necessary but not sufficient to protect the rights and interests of workers if contract was to deliver on its implied promise to offer both parties real freedom of choice it must be supplemented by protective employment laws and collective relations between unions works councils where there were such and employers this is a really key idea i think in 20th century labour law the contract is understood to be necessary but not sufficient when it comes to securing freedom for workers as well as for employers so what about today in contrast to the post-war system the field of work relations and labor law today may be characterized with reference to the weakened state of trade unions and the relative insignificance of collective bargaining collective agreements still exist of course in the uk but they apply only to a minority of workers mostly public sector workers and they're much thinner in substance than they used to be regulating fewer elements of work relations labour law no longer supports trade unionization and collective bargaining as it used to do it neither requires companies to negotiate with unions nor does it even encourage them to do so as it did in the 20th century instead law labour law has been used to curtail the freedom of unions especially the freedom to organize industrial action but also union freedoms to manage their own affairs their own relations with their members and so on law has also been used to empower individual union members against their own union and to empower employers against the unions a second key transformation of labour law in the intervening decades has been the use of statute to create individual rights for workers for example a legal right to a minimum wage to maternity and paternity leave and pay to page holidays and breaks individual employment rights of this type began to be introduced in the 1960s but initially only very gradually and then much more quickly in the late 1990s and early 2000s under the labour government and prime minister tony blair partly as a result of labour the labour government signing up to the social protocol of the maastricht treaty notwithstanding these statutory rights it's nonetheless clear that the rhetoric and the idea of free markets continue to shape government policy in the field of work relations and labour law and that's almost equally true of the labour governments of tony blair and gordon brown as of the conservative governments of recent years especially from the late 1980s the notion of free markets has been used to justify successive waves of anti-trade union legislation and it has also been used to justify the weakening of individual employment rights cast especially by the conservatives as unnecessary red tape by tony blair's labour government the notion of free markets was used to explain why no steps would be taken by them to restore trade union rights to take industrial action and it was used to explain why new individual employment rights would provide minimum protections only with the new minimum wage set for example at a level below the cost of living in 1998 tony blair famously boasted that even after the new government reforms the uk would have the most lightly regulated labor market of any european state to what extent if at all does this flexibility imperative and the ambition to free markets undermine the rule of law doesn't it imply rather that individual companies can do as they like what i would like to suggest here is that law still plays a legitimizing role but now through its provision of basic minimum rights and secondly through the legal institution of contract so let me say a little more about both of these points on paper employees in the uk enjoy a fairly wide range of employment rights a first thing to note however is that many of these rights apply only to employees in the narrow legal sense of that term meaning that they don't apply to agency workers and to various types of casual worker some employment rights additionally come with a minimum length of service requirement which can be as long as two years so for example there is no right under uk law not to be unfairly dismissed until you have been employment been in continuous employment with the same employer for two years even for employees who have been imposed for the requisite length of time significant barriers stand in the way of rights enforcement there is no labour inspectorate in the uk and in the absence of trade unions the sole means of enforcement in the vast majority of cases of breach of the law is via an individual claim before the courts or employment tribunals but this can come with significant costs for a worker both economic and emotional or psychological in low-paid sectors including care of the elderly and disabled and hospitality and catering evidence suggests that minor breaches of employment law are absolutely routine in the uk in our own study of the hospitality sector we found that minor breaches of minimum wage law and working time law were so routine as to have become entirely expected by workers and employers alike breach of formal legal rules had assumed the status of a social norm we suggested reach had become the custom and practice of the sector other studies of different sectors have resulted in similar findings while government acknowledges that breach is common it takes no action to make enforcement more effective we might talk here of deregulation by stealth the rules exist on paper but for many they are simply unenforceable by reason of the relatively thin substance of employment rights in the uk especially when viewed in comparison with other european jurisdictions and by reason two of these difficulties when it comes to enforcement employment rights are not as significant in practice as we might expect them to be together with the weakened nature of trade unions and the sidelining of collective bargaining this has led me to argue that contract is now the key legal institution in the field of work relations in comparison to post-war labour law the role of the contract has expanded very significantly the contract still performs what we might call the gateway function of designating parties as employees and employers in comparison to the post four decades however this gateway function has become more significant we might even say more politicized no longer tamed by trade unions employers have increasingly chosen to draft contracts so that workers do not fall within the legal category employee paying clever lawyers large sums of money no doubt to assist them with that task where that's the case workers are characterized in law instead as self-employed this means that employment law doesn't apply and the employer enjoys consequent savings on wages and other benefits and also on social security and on taxes in addition to the gateway function the contract is now often the primary source of the rules governing the work relation labour law today accords individuals of very wide freedom of contract in practice this undoubtedly means that a wide freedom is enjoyed by the employer the employer can draft contracts unilaterally making workers offers on a ticket or leave it basis that said it must also be acknowledged that the idea of contract can be attractive to workers too what we might call the neo-liberal liberation of contracting for work from its embeddedness in systems of collective bargaining and employment law can be appealing to workers at least in some cases the institutions of the post-war decades and the heavily regulated existence of the forwardist worker may be perceived or portrayed as limiting personal freedom choice and flexibility in daily life in contrast to fixed employment self-employment or entrepreneurship can seem to hold a promise of freedom in the highly individualized and commercialized field of work relations today it is increasingly common for workers to be encouraged to think of themselves as entrepreneurs owning the job marketing themselves in addition to its legal function allowing platforms to escape employment law and social security obligations self-employment or entrepreneurship can perform an ideological function serving to legitimize the expropriation of the workers employment rights so this is my last slide where i reflect on the role of labour law in the uk version of neoliberalism in the neoliberal project if we can think of it in those terms how has neoliberalism shaped the development of labor law and how has labour law influenced the development or unfolding of neoliberalism an idea central to neoliberalism is that states should play an active role in creating and maintaining free markets when we look at uk labour law this idea explains a lot of what we see it explains the anti-union legislation and the restriction of worker and union freedom to take industrial action it helps to explain the steps taken to make it more difficult rather than easier to enforce employment rights and it explains the failure of successive governments to act to address the problem of widespread breach of employment law but it doesn't explain every feature of labour law today labor law has been amended incrementally over the decades the existing law was never swept away wholesale and replaced with a new comprehensive code this means that many old rules remain in force though their significance and meaning may have changed over time even where old rules are no longer enforced old ideas about justice and about fairness can persist here i think we ought to bear in mind the polanian teaching that in society there is not only movement but counter-movement the unfolding of capitalism is not unidirectional but structurally conflict-ridden riven with inconsistencies and contradictions workers claims for justice assert themselves against the structural pressure of markets and competition how successfully they do so depends on the distribution of economic capital but also of political power and the outcomes of the ongoing struggle over it whatever the limitations of our democracies today governments and legislatures remain somewhat answerable to the electorate democratic pressures may account at least in part for the introduction of new employment rights in the blair years in 2017. in past decades sorry we must also take into account the role of the courts the more unlikely pro-worker legislation becomes the greater the temptation for workers and unions to look to the courts to affect legal change in past decades so-called strategic litigation has become more common in the uk and has resulted in some significant court victories we might mention in passing the 2017 decision of the supreme court which ruled that employment tribunal fees constituted so charging workers fees to bring a case to the employment tribunal the court ruled that that constituted a barrier to justice and a contravention of the rule of law also from earlier this year the uber and aslam decision of the supreme court where the court ruled that uber drivers were not self-employed but they were workers with legal rights to a minimum wage and two paid breaks and holidays so we see that with movement there is also counter movement markets and state what of the rule of law way back in 1979 carl clare wrote about liberal legality and about how claims to laws neutrality equality and rationality served to legitimize the legal order looking beyond the field of labor law for a moment we can all probably think of many ways in which law and legal logic have furnished neo-liberal reforms with legitimacy neoliberal thinkers including friedrich hayek even prize the rule of law earth or claim to prize the rule of law above democracy with certain forms of democracy rejected as sectionalism and collectivism as purportedly undemocratic obstruction to the rule of law of course neoliberals understand the rule of law in a very particular way for hayek the law in the rule of law is very specifically the law of liberty and the rule of law is therefore the principle of limited government dictating that government should restrict itself to enforcing rules of just conduct meaning primarily private property and freedom of contract it follows that legislation including especially labour legislation is seen as an illegitimate contravention of the principle of the rule of law despite all the shortcomings of our employment law today in terms of its reach and its enforceability the provision of basic employment rights continues to create at least the impression of a rule-bound sphere of activity interestingly empirical evidence suggests that workers tend to grossly overestimate the extent to which their interests are protected by the law at least until the dispute arises and they have reason to seek legal advice for how long this impression can continue to last in the face of routine breach of the law is another matter in addition to basic statutory rights the legal institution of contract also serves a legitimating or ideological function the notion of being free to negotiate one's own terms and conditions holds an attraction for at least some workers self-employment is more attractive than employment for some for its inherent promise of flexibility and choice closely tied to the ideal of freedom of contract the idea of market justice is also at play today workers may value the opportunity to work hard and get ahead they might assume that those on very low wages deserve nothing more they're unskilled they lack ambition they're afraid of hard work again workers own experience of working life and the labor market are likely to shape their own views so to a brief conclusion in this neoliberal era contract is at once the key legal institution in the field of work relations at least in the uk and contract is also an ideological lens the basic direction of travel is towards nominally free markets and state intervention to achieve and maintain those free markets when it comes to the enforcement of employment rights non-intervention on the part of the state threatens to undermine the rule of law at least for as long as we understand the rule of law to require compliance with legislation insofar as we are persuaded by the hayekian definition of the rule of law we may be satisfied as workers with formal freedom of contract and market justice but for now opinion remains divided the law is inconsistent competing ideas of fairness and justice at work exist side by side and can each make themselves heard influencing the development of the law in different directions you

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Length: 30min 29sec (1829 seconds)

Published: Tue Dec 14 2021