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Thursday Thinkpiece: The Law of Work, 2nd Edition

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The Law of Work, Second Edition

Authors: David J. Doorey (with contributors for selected chapters)

ISBN: 978-1-77255-618-6
Publisher: Emond Publishing
Page Count: 696
Publication Date: March, 2020

Regular Price: $93 (print), $72 (e-book)

Excerpt: from Chapter 2, “A Framework for Analyzing the Law of Work,” pp. 20-26, in Part I: The Law of Work: Themes, Frameworks, and Perspectives [Footnotes omitted]

III. A Framework for Analysis of the Law of Work

Treating work law as one of a variety of subsystems operating in society at any given time provides a more realistic depiction of how things actually work. It allows us to see how legal rules relating to the labour relationship are influenced by a whole range of pressures emanating from outside the formal confines of laws targeting the employment relationship. The framework discussed in this section helps us more fully assess the role of law in our society, explain legal rules, and predict the impact of legal rules.

The law of work framework is presented in Figure 2.1. It is descriptive and demonstrates the breadth of our subject, drawing attention to the reality that the law of work is more than the sum of its parts. Every legal rule we encounter in this text is a result of the interaction among a variety of forces, including fierce debates, rich histories, reluctant compromises, and sometimes violent and bloody clashes. The laws that govern work in any society emerge from this complex milieu. Therefore, we need to understand that legal rules do not operate in a vacuum. They shape and are shaped by the many broader social, economic, political, and environmental forces operating in society generally at any given time.

A. The Work Law Subsystem

As noted earlier in this chapter, the separation of laws governing employment into three distinct regimes obscures the important interconnections among the three regimes.12 It presents an incomplete picture of how the laws that govern employment actually function in the real world. To obtain a fuller, more accurate view, we need to step back and view the laws that govern the employment relationship as a distinct subsystem of the broader society in which it functions. This subsystem is presented in the box in Figure 2.1 labelled “The Work Law Subsystem.” Since the work law subsystem is the focus of our attention in this book, it is presented in much greater detail and as central in the framework. …

B. The Internal Feedback Loop

A key to understanding the framework presented in this chapter lies in paying attention to how its various components interact in an ongoing dynamic process. Two types of feedback loops appear in Figure 2.1: (1) an internal feedback loop and (2) an external feedback loop. The internal feedback loop appears in blue and shows how the outputs of each regime “feed back” into the other regimes as information that can influence actors’ behaviour and rule-making processes, and eventually produce new outputs.

To demonstrate, consider an obvious example of regime interaction within the work law subsystem. Regulatory standards, such as the minimum wage found in Canadian employment standards legislation, regulate both individual employment contracts in the common law regime as well as collective agreements in the collective bargaining regime. Neither type of contract can include a wage clause that provides for less than the statutory minimum wage. Nor can either type of contract include a term that discriminates contrary to human rights legislation, to give another example. In these ways, the outputs from the regulatory standards regime directly influence the range of options available to the key actors and legal institutions in the other two regimes. So we cannot fully understand the outputs of the other two regimes without acknowledging the effects of the regulatory standards regime.

Similarly, the legal rules produced by the common law regime affect outputs from the other two regimes. For example, governments have occasionally mimicked rules developed in the common law and incorporated them into regulatory standards. The statutory “notice of termination” requirements in Canadian employment standards legislation are an example; they are modelled after the long-standing common law implied contract term requiring “reasonable notice” of termination. More fundamentally, the common law regime acts as the default legal system. Almost every regulatory standard and every collective bargaining law represents the government’s response to some perceived inadequacy in the common law model. To fully understand what objective statutory laws are seeking to achieve, we need to understand how the common law would deal with the matter in the absence of legislation.

Finally, legal rules produced by the collective bargaining regime in the form of collective bargaining laws and collective agreement provisions influence outputs from the other regimes. Canadian collective bargaining legislation imposes many restrictions on the freedom of employers and individual employees to contract that would otherwise prevail in the common law regime. An obvious example is that in the common law, a strike by workers is a breach of contract and a tortious conspiracy, but collective bargaining legislation shields workers from those actions by protecting a limited right to strike in some circumstances. Also, many modern-day statutory standards mimic terms that unions and employers had originally included in collective agreements. For example, the roots of present-day maximum hours legislation are firmly embedded in the Nine-Hour Movement organized by Canadian unions of the early 1870s, as well as hours of work provisions that appeared later in collective agreements. The three regimes of work law “learn” from one another. See Box 2.2 for another example of how collective bargaining outputs can influence what occurs in the common law regime.

BOX 2.2: An Example of the Internal Feedback Loop: The Dofasco Way

Industrial relations scholars have shown that collective agreements, bargained within the collective bargaining regime, influence the terms of individual employment contracts in non-union workplaces (within the common law regime). This is known as the spillover effect of collective bargaining. *

Some non-union employers pay their employees more than market forces alone would dictate and offer other benefits, including “grievance procedures” that attempt to mirror what unions bargain into their collective agreements, in order to remove or reduce the incentive for their employees to join unions. The spillover effect is an example of the operation of the internal feedback loop: outputs from the collective bargaining regime become inputs in the common law regime, influencing the internal inputs of the actors there, and ultimately the terms of employment contracts and workplace norms within the common law regime. The following excerpt from a newspaper story provides a glimpse into this process.

Robert Perkins thought he had a deal. He gave Dofasco 32 years of his life in the grit and noise of the Hamilton steel mill. In exchange he was to get a secure retirement with a good pension and health benefits.

It was all part of a contract called The Dofasco Way, the package of welfare programs leavened with a healthy dose of fear that kept the company union-free for 75 years, creating what employees always felt was a “family atmosphere” where management really cared about them.

Today, after taking early retirement because of the way his body was worn down in fulfilling his part of that contract, Perkins and several hundred other Hamilton Dofasco veterans fear the old way is dead and the deal has been summarily changed.

“They gave us a package when he retired and now they’ve decided across the board to take away those benefits,” said Perkins’ wife, Bonnie Hamilton. “Something’s just not right here. If they get away with this, what’s going to be next?”

Dating back to 1937, The Dofasco Way combined welfare initiatives such as recreation programs, concerts, picnics and a massive Christmas party with one of Canada’s first profit-sharing plans. Called “The Fund,” the plan gave industrial workers an undreamt-of promise of security in their old age. That promise, however, was always coupled with a far from subtle threat—join a union and it could all be taken away. That combination of threat and promise worked for 75 years, but today, many veteran workers fear The Dofasco Way is dying a “death of a thousand cuts,” as the steel industry concentrates into a few firms with a global reach. …

The Dofasco Way was rooted in the visceral hatred company founders Clifton and Frank Sherman had toward labour unions—an evil they sought to keep out of their Hamilton plants by creating a sense of mutual interest between workers and management. “My father felt a union created unrest in a company,” Frank Sherman Jr. recalled in a 2008 Spectator interview. “He felt if people working in his company were doing as well as people in unions, why would they need one?” †

* R. Freeman and J. Medoff, What Do Unions Do? (New York: Basic Books, 1984); D. Neumark and M. Wachter, “Union Effects on Non-union Wages: Evidence from Panel Data on Industries and Cities” (1995) 49:1 Indus & Lab Rel Rev 20; and L. Kahn, “Union Spillover Effects on Organized Labor Markets” (1980) 15:1 J Hum Resources 87.

† S. Arnold, “The Dofasco Way,” Hamilton Spectator (2012), online: <http://www.thespec .com/news-story/2129793-the-dofasco-way/> .

If we study work law in silos, as three distinct regimes that do not interact, we would miss the relationships described in Box 2.2. If we look only at the collective bargaining regime, we will not even notice the benefits Dofasco gave its employees as a union avoidance strategy and, therefore, the true effects of collective bargaining will be underestimated. If we study only the common law regime, we might wrongly conclude that Dofasco employees used superior negotiating skills to bargain high wages and a generous benefit and retirement package, or that their high productivity justified these generous contractual entitlements. Only by recognizing that the regimes are interconnected through a process of ongoing information feedback will we discover the full story of how legal rules emerge and influence labour market outcomes.

B. External Inputs and the External Feedback Loop

So far, we have looked only at what goes on within the work law subsystem itself—at how the laws that govern employment are created and how the three regimes of work law interact with one another. Now it is time to cast our gaze outward to the broader social system within which the work law subsystem functions. As noted earlier, the work law subsystem does not operate in isolation from the rest of society. It is influenced by its external environment, and the legal rules it produces can also influence that external environment. These interactions are demonstrated in Figure 2.1 by the purple arrows that flow out of the work law subsystem to the external inputs, and from the external inputs back into the work law subsystem. These arrows indicate the external feedback loop component of our framework. 

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