Philosophical Foundations of Labor Law

Abstract

Labor law is an offspring of the social and political action of the working class movement. While this movement started its first revolts in seventeenth-century Europe, it was only capable of organizing itself in the nineteenth century when the old laws against combinations were repealed. During this period, socialist ideologues provided the intellectual substratum for the movement to flourish. Thus, in England, Robert Owen inspired the foundation of the Grand National Consolidated Trades Union in 1834, Ferdinand Lassalle founded the General German Workers’ Union in 1863, and the following year Karl Marx was a chief actor in the creation of the International Working Men’s Association, usually called the First International. Governments conceded both democratic and labor law reforms under the pressure of uprisings, and toward the end of the century, when working class parties and trade unions consolidated their power, labor and industrial legislation was an essential feature of European law.

The emergence of American labor law was influenced by socialist ideas as well. It is worth quoting one of the leading experts in labor policies in the interwar period, Walton Hamilton, who served as the first U.S. representative to the International Labor Organization (ILO) in 1935:

The wise organization of wage-earners, by keeping its personnel fairly intact, by imposing restrictions upon entrance to a trade, by using “collective bargaining” in the making of wage contracts, and by seizing the favorable moment for the presentation of its claims, can secure for its members higher wages than they could otherwise obtain.

Hamilton advocated for a social reform agenda that included, among other things, the social control of business. Even if Hamilton was not an explicit supporter of Marxism, his socialist leanings are undisputable. In effect, Hamilton defended the socialization of corporate property:

If scientific knowledge, discovery, and invention become “public property” after a term of years, there seems no reason why investments in the apparatus of production should not become the property of the community when those whose savings make them possible are fairly paid.

Basically, labor law is a complex bundle of restraints on freedom of contract in the labor markets. According to Henry Farnam’s classification, such legislative measures fall into three different types: protective labor legislation, distributive legislation, and permissive legislation. Protective legislation includes compulsory regulation of the labor contract such as child labor laws, maximum hours laws, and health and safety laws. Today, this type of legislation also encompasses the prohibition of sexual and moral harassment at work and nondiscrimination in recruitment and hiring. Distributive legislation seeks to affect the terms of exchange; for example, compulsory payment in legal tender, minimum wage laws, control of wages, and retirement security. Compensation for arbitrary discharge is often regarded as a distributive measure, but it can also be taken as a piece of protective legislation if it seeks to guarantee fair and humane treatment in the workplace. Finally, permissive legislation facilitates the creation of institutions for concerted worker action, collective bargaining, and labor arbitration.