Minimum Wage and Freedom of Contract: An Interdisciplinary Perspective
Interdisciplinary Approach to Law in Modern Social Context. Conference Papers, Vilnius University, Vilnius, 2016, pp. 209-217
11 Pages Posted: 27 Jul 2016 Last revised: 2 Aug 2016
Date Written: July 1, 2016
Freedom of contract is one of the core principles of contract law. However, when it comes to employment contracts, several restrictions to this principle are legally imposed. One of them relates to the price of labour, since most of European national laws set forth a minimum wage. This paper analyses the case for implementing such a rule. The aim is to draw conclusions on whether or not a legally imposed minimum wage is justified and desirable and, if so, if its rate should be relatively high. Freedom of contract being a fundamental principle, limits on it must be necessary or, at least, beneficial for society as a whole.
The analysis is made from an interdisciplinary perspective. From a legal point of view, it is necessary to determine whether or not fixing a minimum wage is a justified restriction of freedom of contract that the legislature can set forth. In the event it were decided that the legislature is competent to limit freedom of contract on a core term such as the price of labour, it should be addressed the question of its desirability. In this paper, this is studied taking into account a historical perspective, the point of view of ethics and morals, economic grounds, and also political and sociological reasons.
Keywords: minimum wage, freedom of contract, human rights, law and economics, state policy
Suggested Citation: Suggested Citation