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Labour law (also spelled as "labor" law or called "employment law") mediates the relationship between workers, employers, trade unions and the government. Collective labour law relates to the tripartite relationship between employee, employer and union. Second, individual labour law concerns employees' rights at work and through the contract for work. The labour movement has been instrumental in the enacting of laws protecting labour rights in the 19th and 20th centuries. Labour rights have been integral to the social and economic development since the Industrial Revolution. Employment standards are social norms (in some cases also technical standards) for the minimum socially acceptable conditions under which employees or contractors will work. Government agencies (such as the former U.S. Employment Standards Administration) enforce employment standards codified by labour law (legislative, regulatory, or judicial).
Labour law history
Labour law arose due to the demand for workers to have better conditions, the right to organize, or, alternatively, the right to work without joining a labour union, and the simultaneous demands of employers to restrict the powers of workers' many organizations and to keep labour costs low. Employers' costs can increase due to workers organizing to achieve higher wages, or by laws imposing costly requirements, such as health and safety or restrictions on their free choice of whom to hire. Workers' organizations, such as trade unions, can also transcend purely industrial disputes, and gain political power. The state of labour law at any one time is therefore both the product of, and a component of, struggles between different interests in society.
Individual labour law
Contract of employment
The basic feature of labour law in almost every country is that the rights and obligations of the worker and the employer between one another are mediated through the contract of employment between the two. This has been the case since the collapse of feudalism and is the core reality of modern economic relations. Many terms and conditions of the contract are however implied by legislation or common law, in such a way as to restrict the freedom of people to agree to certain things to protect employees, and facilitate a fluid labour market. In the U.S. for example, majority of state laws allow for employment to be "at will", meaning the employer can terminate an employee from a position for any reason, so long as the reason is not an illegal reason, including a termination in violation of public policy.
One example in many countries is the duty to provide written particulars of employment with the essentialia negotii (Latin for essential terms) to an employee. This aims to allow the employee to know concretely what to expect and is expected; in terms of wages, holiday rights, notice in the event of dismissal, job description and so on. An employer may not legally offer a contract in which the employer pays the worker less than a minimum wage. An employee may not for instance agree to a contract which allows an employer to dismiss them unfairly. There are certain categories that people may simply not agree to because they are deemed categorically unfair. However, this depends entirely on the particular legislation of the country in which the work is.
There may be law stating the minimum amount that a worker can be paid per hour. Australia, Belgium, Brazil, Canada, China, France, Greece, Hungary, India, Ireland, Japan, South Korea, Luxembourg, the Netherlands, New Zealand, Paraguay, Portugal, Poland, Romania, Spain, Taiwan, the United Kingdom, the United States, Vietnam and others have laws of this kind. The minimum wage is usually different from the lowest wage determined by the forces of supply and demand in a free market, and therefore acts as a price floor. Each country sets its own minimum wage laws and regulations, and while a majority of industrialized countries has a minimum wage, many developing countries have not.
- Minimum wages are regulated and stipulated also in some countries that lack specific laws. In Sweden, for instance, minimum wages are negotiated between the labour market parties (unions and employer organisations) through collective agreements that also cover non-union workers and non-organised employers.
Minimum wage laws were first introduced nationally in the United States in 1938, Brazil in 1940 India in 1948, France in 1950, and in the United Kingdom in 1998. In the European Union, 18 out of 25 member states currently have national minimum wages.
Before the Industrial Revolution, the workday varied between 11 and 14 hours. With the growth of industrialism and the introduction of machinery, longer hours became far more common, with 14–15 hours being the norm, and 16 not at all uncommon. Use of child labour was commonplace, often in factories. In England and Scotland in 1788, about two-thirds of persons working in the new water-powered textile factories were children. The eight-hour movement's struggle finally led to the first law on the length of a working day, passed in 1833 in England, limiting miners to 12 hours, and children to 8 hours. The 10-hour day was established in 1848, and shorter hours with the same pay were gradually accepted thereafter. The 1802 Factory Act was the first labour law in the UK.
After England, Germany was the first European country to pass labour laws; Chancellor Bismarck's main goal being to undermine the Social Democratic Party of Germany (SPD). In 1878, Bismarck instituted a variety of anti-socialist measures, but despite this, socialists continued gaining seats in the Reichstag. The Chancellor, then, adopted a different approach to tackling socialism. To appease the working class, he enacted a variety of paternalistic social reforms, which became the first type of social security. The year 1883 saw the passage of the Health Insurance Act, which entitled workers to health insurance; the worker paid two-thirds, and the employer one-third, of the premiums. Accident insurance was provided in 1884, while old age pensions and disability insurance were established in 1889. Other laws restricted the employment of women and children. These efforts, however, were not entirely successful; the working class largely remained unreconciled with Bismarck's conservative government.
In France, the first labour law was voted in 1841. However, it limited only under-age miners' hours, and it was not until the Third Republic that labour law was effectively enforced, in particular after Waldeck-Rousseau 1884 law legalizing trade unions. With the Matignon Accords, the Popular Front (1936–38) enacted the laws mandating 12 days (2 weeks) each year of paid vacations for workers and the law limiting to 40 hours the workweek (outside of overtime).
- Lochner v. New York, 198 U.S. 45 (1905), a notorious, and now defunct case by the US Supreme Court that regulation of working time (for bakeries) to limit workers to a 10-hour day.
Health and safety
Convention no. 158 of the International Labour Organization states that an employee "can't be fired without any legitimate motive" and "before offering him the possibility to defend himself". Thus, on April 28, 2006, after the unofficial repeal of the French First Employment Contract (CPE), the Longjumeau (Essonne) conseil des prud'hommes (labour law court) judged the New Employment Contract (CNE) contrary to international law, and therefore "illegitimate" and "without any juridical value". The court considered that the two-years period of "fire at will" (without any legal motive) was "unreasonable", and contrary to convention no. 158, ratified by France.
Child labour is the employment of children under an age determined by law or custom. This practice is considered exploitative by many countries and international organizations. Child labour was not seen as a problem throughout most of history, only becoming a disputed issue with the beginning of universal schooling and the concepts of labourers' and children's rights. Child labour can be factory work, mining or quarrying, agriculture, helping in the parents' business, having one's own small business (for example selling food), or doing odd jobs. Some children work as guides for tourists, sometimes combined with bringing in business for shops and restaurants (where they may also work as waiters). Other children are forced to do tedious and repetitive jobs such as assembling boxes, or polishing shoes. However, rather than in factories and sweatshops, most child labour occurs in the informal sector, "selling on the street, at work in agriculture or hidden away in houses — far from the reach of official inspectors and from media scrutiny."
Collective labour law
Collective labour law concerns the tripartite relationship between employer, employee and trade unions. Trade unions, sometimes called "labour unions"
Some countries require unions to follow particular procedures before taking certain actions. For example, some countries require that unions ballot the membership to approve a strike or to approve using members' dues for political projects. Laws may guarantee the right to join a union (banning employer discrimination), or remain silent in this respect. Some legal codes may allow unions to place a set of obligations on their members, including the requirement to follow a majority decision in a strike vote. Some restrict this, such as the 'right to work' legislation in some of the United States.
Strike action is the weapon of the workers most associated with industrial disputes, and certainly among the most powerful. In most countries, strikes are legal under a circumscribed set of conditions. Among them may be that:
- The strike is decided on by a prescribed democratic process. (Wildcat strikes are illegal).
- Sympathy strikes, against a company by which workers are not directly employed, may be prohibited.
- General strikes may be forbidden by a public order.
- Certain categories of person may be forbidden to strike (airport personnel, health personnel, teachers, police or firemen, etc.)
A boycott is a refusal to buy, sell, or otherwise trade with an individual or business who is generally believed by the participants in the boycott to be doing something morally wrong. Throughout history, workers have used tactics such as the go-slow, sabotage, or just not turning up en-masse to gain more control over the workplace environment, or simply have to work less . Some labour law explicitly bans such activity, none explicitly allows it.
Picketing is a tactic which is often used by workers during strikes. They may congregate outside the business they are striking against to make their presence felt, increase worker participation, and dissuade (or prevent) strike breakers from entering the workplace. In many countries, this activity is restricted by labour law, by more general law restricting demonstrations, or sometimes by injunctions on particular pickets. For example, labour law may restrict secondary picketing (picketing a business not directly connected with the dispute, such as a supplier of materials), or flying pickets (mobile strikers who travel to join a picket). There may be laws against obstructing others from going about their lawful business (scabbing, for example, is lawful); making obstructive pickets illegal, and, in some countries, such as Britain, there may be court orders made from time to time against pickets being in particular places or behaving in particular ways (shouting abuse, for example).
Workplace consolation statutes exist in many countries, requiring that employers consult their workers on issues that concern their place in the company. Industrial democracy refers to the same idea, but taken much further. Not only that workers should have a voice to be listened to, but that workers have a vote to be counted.
Originating in Germany, some form of co-determination (or Mitbestimmung) procedure is practised in countries across continental Europe, such as Holland and the Czech Republic, as well as Scandinavian countries (e.g. Sweden). This involves the rights of workers to be represented on the boards of companies for whom they work. The German model involves half the board of directors being appointed by the company trade union. However, German company law uses a split board system, with a 'supervisory board' (Aufsichtsrat) which appoints an 'executive board' (Vorstand). Shareholders and unions elect the supervisory board in equal number, except that the head of the supervisory board is, under co-determination law, a shareholder representative. While not gaining complete parity, there has been solid political consensus since the Helmut Schmidt social democrat government introduced the measure in 1976.
In the United Kingdom, the similar proposals were drawn up, and a command paper produced named the Bullock Report (Industrial democracy). This was released in 1977 by the James Callaghan Labour government. This proposal involved a similar split on the board, but its effect would have been even more radical. Because British company law requires no split in the boards of directors, unions would have directly elected the management of the company. Furthermore, rather than giving shareholders the slight upper hand as happened in Germany, a debated 'independent' element would be added to the board, reaching the formula 2x + y. However, no action was ever taken as the UK slid into the winter of discontent. This tied into the European Commission's proposals for worker participation in the 'fifth company law directive', which was also never implemented.
In Sweden, this is regulated through the 'Law on board representation' (Lagen om styrelserepresentation). The law covers all private companies with 25 or more employees. In these companies, workers (usually through unions) have a right to appoint two board members and two substitutes. If the company has more than 1,000 employees, three members and three substitutes are appointed by workers/unions. It is common practice that seats are divided between representatives from the major union coalitions.