by Brian Bercusson and Cynthia Estlund (eds). Oxford: Hart Publishing, 2008. 290pp. Hardcover. £50.00/$105.00 ISBN: 9781841137667.
Reviewed by Lawrence E. Rothstein, Department of Political Science & Charles T. Schmidt, Jr. Labor Research Center, University of Rhode Island. E-mail: LER [at] URI.EDU.
This is an edited volume, the second from the Columbia University-University of London Law Schools’ comparative law series. It brings together essays from a number of distinguished authors in labor and employment law. As the introductory chapter by the editors, Brian Bercusson and Cynthia Estlund, notes, the essays all analyze trends in the responses to the decline in the effectiveness of collective bargaining and traditional labor law to protect labor standards. The decline is attributed to the “usual suspects”: globalization, deregulation and outsourcing. The responses, according to the contributors, reflect efforts to move the locus of regulation to smaller of governance, such as firms and local communities and upward to international organizations, including the ILO, EU institutions, bilateral and multilateral treaties and NGOs. Along with the focus on new levels of labor regulation come new forms of regulation, such as “soft law,” self-regulation, private litigation and multilateral alternative dispute settlement. The central thesis of the authors and the editors are that these new levels and new forms of regulation must be utilized to restore workers’ voice and industrial democracy.
What the introductory chapter lacks is a clearly set out theoretical perspective that links global economic changes in employment law to points of pressure for responding to perceived detrimental changes in work lives and workers’ lives. This theoretical omission is addressed by Ulrich Mückenberger’s essay “Alternative Mechanisms of Voice Representation.” Even though this essay is the penultimate chapter of the book, I would recommend reading it first, and I will so treat it. Using A.O. Hirschman’s (1970) now classic notions, Mückenberger suggests that workers’ and citizens’ “voice,” i.e. their ability to collectively influence key decisions that affect their lives, has declined because of factors relating to “exit,” the ability to depart from organizations that do not respond adequately to their needs. The opportunity for exit must be balanced. If exit is too easy, then there is little incentive for a worker to stay and exercise voice in order to improve conditions at work. If exit is too difficult, because reasonable alternatives to the present job are lacking, then the worker fears losing the job for exercising her voice. Exit has been greatly limited by the decline in “good jobs,” which provide employment that is full-time, long-term, family wage earning, skilled, with progressive responsibility and increased protection based on seniority. Workers’ exit is also limited by the attack on and limitations of the social [*685] safety net which provide protection for the unemployed.
On the other hand, employers’ voice has been greatly enhanced because of their superior opportunity for exit through outsourcing and global capital mobility. They have exercised that voice by depressing wages and benefits, combating unionization, reducing taxes and social welfare expenditures and promoting deregulation. Thus, the participation of workers in the governance of the workplace has been drastically reduced, both through trade unions and law. Mückenberger suggests that restoration of workers’ and citizens’ voices must come through a reinvigoration of civil society, i.e. through new associations for advocacy that link concerns such as health, workers’ rights, the environment, protection of minorities and women’s rights. While admitting that such organizations have no legal or coercive power, he argues that they can advocate to government, monitor and negotiate the actions of MNCs in local communities and publicize their concerns. The hope is that this will restore the political will of nations, communities and workers to make the economy and economic institutions better serve workers and citizens.
In keeping with the ideas outlined by Mückenberger, Harry Arthurs in chapter two discusses three examples of “reflexive law,” voluntary codes of conduct, “ratcheting labor standards,” and the United Nations Global Compact. I did not fully understand Arthurs’ explication of reflexive law. As a result, and given his examples, I did not fully understand what was new about it. Arthurs states that reflexive law represents a “post-modern socio-legal theor[y]” which denies the state’s centrality in the administration of law, maintains that social systems, including the law, are autonomous and closed and stresses the “self-referential, self-regulating and self-reproducing” character of law. Reflexive legal theory holds “that law acts not so much by imposing itself on other social domains directly as by regulating their self-regulatory processes as well as its own” (p.20). Huh??!!! I guess this may mean that, along with the traditional makers and enforcers of law, legislatures and courts, many social institutions make and administer rule governed systems with considerable impact on everyone. This, however, is neither exceptional nor new. To be fair, Arthurs treats reflexive law theory and the examples he gives skeptically.
Voluntary codes of conduct, according to Arthurs, are adopted by corporations ostensibly without compulsion, but in reality because of adverse publicity or the threat of political or economic sanctions. He notes that typically their provisions are vague, administrative responsibility for implementing and monitoring is not designated and enforcement procedures and penalties are not specified. But he also sees a new generation of codes as arising through the reinvigoration of civil society. These codes involve to a much greater extent transnational and local advocacy organizations in their formation, extension of the codes to suppliers and subsidiaries and professional arms-length monitoring, sometimes performed by one of the advocacy organizations. Unfortunately, Arthurs provides no examples of the new codes. [*686]
Ratcheting labor standards refers to compiling, advocating, monitoring and publicizing adherence to a set of best practices. Advocacy organizations combine with the best performing corporations to promulgate the standards and at times to promote government action to diffuse them. The United Nations Global Compact, signed by the Secretary General, more than 50 of the world’s largest corporations and several labor, environmental, human rights and social organizations, is the result of an ongoing dialogue among these transnational entities. The Compact includes nine principles, two concerned with human rights, four with the environment, and four with labor. The signatories agree to advocate the principles, to enact and support the principles within their areas of influence, to submit an example of progress in implementing one of the principles at least once each year, and consult with their social partners concerning further measures. The Compact also establishes specific procedures for disseminating the principles. Arthurs concludes with the remote hope that reflexive law, the principles and procedures developed by the confluence of multiple non-governmental actors, will develop into a coherent, progressive system of labor regulation that can be looked to by courts and ultimately legislatures in formulating a new labor law system.
In chapter three Mark Barenberg of Columbia Law School recounts two case studies, in which he participated, of corporate codes brokered by an NGO and monitored by managers and outside for-profit and non-profit professionals. I will summarize the Mexican case only because the Indonesian case was very similar. The Worker Rights Consortium is supported by more than one hundred colleges and universities for the protection of the rights of workers who make the schools’ logo-labeled merchandise. This NGO investigates complaints made by workers and their own organizations. When investigating, the WRC experts assemble local teams, as much as possible including local workers, and conducts extensive on-site interviews. In the case of a Mexican factory owned by a South Korean supplier of Nike and Reebok, workers had complained about and staged a walkout over a number of health, safety and wage issues that they claimed had been ignored because of collusion between the company and the politically connected Mexican trade union confederation. The workers had rejected the confederation’s union and tried to organize their own union. They complained to the WRC which began an investigation that was stonewalled by the company. The WRC contacted Nike and Reebok asking them to encourage the company to participate in the interviews. Through the urgings of the licensing universities and the focusing of media attention, Nike did so.
The investigation report established many violations of labor standards promulgated by the coalition of universities for the manufacture of their logo products and recommended a comprehensive program of remediation, including a free and fair union election. At first Nike resisted the recommendations and hired their own labor auditor (with no background in labor law), keeping the auditor’s reports secret. Continued university pressure and the monitoring reports of the WRC-established committee soon made the obviously unfair and substandard work [*687] conditions obvious, and Nike published its expert’s “activity reports.” The South Korean company resisted allowing striking workers to return and particularly the return of the strike leaders, until Nike was finally pressured to broker a deal leading to the return of the workers and the election of a new union.
Barenberg assesses the conditions for success of the WRC. Structurally, the WRC is neither governed nor funded by business corporations or labor unions. There is a second monitoring group charged with seeing that the participating schools back the WRC’s recommendations. Because of its origin, the WRC can easily draw on the expertise of university faculties. The investigations are much more extensive than managerial sponsored or funded investigations, devoting ten to twenty times the person-days to on-site interviewing. The investigation teams include local representatives of workers, rights advocates and experts. The interviewing takes place in social settings of high trust for workers, managers and local officials, while managerial audits conduct interviews almost entirely in company offices. The investigation and monitoring process is designed not only to deal with immediate grievances, but to build a process for long-term monitoring, consultation and remediation.
Simon Deakin’s comparison of the historical advent of the liberal contract of employment in Britain and Continental Europe seems very difficult to fit into the framework of this volume. He argues that the early industrialization of Britain did not depend on or bring with it the development of a liberal contract of employment, but rather continued reliance on the master/servant relationship. The obligations to protect the servant in times of sickness or old age rested only on the moral obligation of the master. However, industrial conditions were such that this obligation was mostly ignored and the small governmental provisions for these situations, such as the Elizabethan Poor Laws, had been severely weakened. The later industrialization in France and Germany, while simultaneous with the development of the notions of equality of bargaining power and that either party could terminate the contract, also included the idea that the worker’s subordination to managerial control required some degree of social protection to make equality of bargaining power more of a reality. This quid pro quo was provided indirectly by the state through social insurance and recognition of collective bargaining rights. Deakin’s point is that capitalist industrialization does not require a particular legal regime but can develop under many different legal settings, many of which provide much greater citizen control of corporations and are much more protective of the worker than those of England or the United States.
Cynthia Estlund of NYU Law School analyzes “Responsible Regulation” which builds on self-regulation embedded in a system of public oversight, but envisions a greater role for third parties, including workers and their organizations, in monitoring compliance and the use of private litigation as part of the enforcement mechanism. Estlund proposes a Sarbanes-Oxley approach, which includes vigorous and independent monitoring, protection of employee whistleblowers, and private [*688] causes of action for those injured by violations. One example of such a program was the Department of Labor’s use against sweatshops in the garment industry of the “hot goods” provision of the Fair Labor Standards Act, which allowed the embargo of goods manufactured in violation of the law. The threat of embargo induced some of the larger manufacturers to enter into agreements with their subcontractors to comply with the wages and hours laws, keep records and submit to inspections by outside monitors generally hired by the manufacturers. Another example Estlund mentions was the New York City Greengrocer Code of Conduct. Resulting from a parade of wage and hour enforcement actions that taxed the resources of the New York Attorney General’s Labor Bureau, the GGCC bound subscribing employers to adhere to wage and hour laws, keep adequate records, advise employees of their rights and submit to regular inspections by outside monitors appointed by the AG with consultation of employers and unions.
Citing the pressure on workers and their organizations from flexibilization, globalization and privatization, factors similar to those outlined by Mückenberger, Katherine Stone of UCLA Law School advocates the revival of collective action at the local level, ideally by “citizen unions.” Coalitions of labor and other advocacy groups at the local level can pressure resident businesses to improve the economic condition and social life of local citizens. She cites the work of organizations such as the Industrial Areas Foundation, the Boston Center for Contingent Work, the National Federation for Fair Employment and local living wage campaigns as examples.
The difficulties of the formal legal system in dealing with workplace discrimination that is constituted by a set of cultural, psychological and social factors that do not reflect conscious intent, but that normalize the values of dominant groups, prompt Susan Sturm of Columbia University Law School to argue for a more participatory, deliberative, pluralistic and informal dialogue on appropriate anti-discrimination norms and policies. She wants courts to be involved to a greater extent in encouraging this type of non-binding and free-ranging dispute settlement. Here again, however, it is hard to see what is new about encouraging courts to facilitate negotiation and settlement or alternative dispute resolution techniques.
K.D. Ewing of King’s College London discusses 31 international framework agreements between global union federations and MNCs. These agreements generally bind the companies to uphold core international labor standards. As Ewing notes, however, without an international legal regime backing these agreements, their success is mixed. Performance is varied on key requirements for effectiveness, such as the extent of dissemination within an enterprise, identification of responsible administrators, regular and periodic procedures for monitoring effectiveness of agreements, trade union involvement in monitoring, procedures for complaint of breach, and procedures for correcting violations and rectifying oversights. [*689]
Three of the last five chapters in the book deal specifically with the European Union’s use of reflexive law and can be treated together. Bob Hepple contrasts the EU’s use of the Generalized System of Preferences (GSP) with that of the US. The EU’s system universally applies the eight core standard ILO conventions, six of which have not even been ratified by the US. The EU is required to follow standard and transparent procedures which begin with a request for GSP treatment from an interested country, which then has to show that its legislation complies with the ILO core standards. The US Trade Representative’s decision is characterized by almost complete discretion, which often seems to depend primarily on domestic protectionism or foreign policy considerations. The EU system is less protectionist, because it was initially designed for assisting former colonies and later applied to other developing countries. Hepple suggests unilateral GSPs and multilateral trade agreements are more suitable than the WTO as potential enforcers of labor standards to the extent that they incorporate labor representation in their structure.
Brian Bercusson holds up the example of the EU social dialogue among European level social partners, particularly the negotiation of the Framework Agreement on Fixed-Term Work, as a new use of the open method of coordination. This Agreement and the open method leave the substantive details to national legislation, which must comply with the statement of principles, and procedural requirements established in the Agreement. Enforcement of substantive provisions which devolve upon the labor relations processes, courts and administrative bodies of the member nations, while compliance with the principles and procedures can be the subject of action in the European Court of Justice. Similarly, Marie-Ange Moreau of the European University Institute raises as a model of transnational social norms the European Works Council Directive which was the subject of dialogue among the social partners and requires negotiation at the firm level. She seconds Bercusson on the importance of the possible recourse to the European Court for clarification and enforcement of European, rather than national, social norms.
While many of the essays are interesting, I found this a very disappointing volume. There is an air of desperation in each announcement of new initiatives that are really not new, plentiful nor particularly successful. There is an excessive amount of repetition in the litany of global forces that have curtailed industrial democracy. In the end, each essay seems to fall back on the hope that some of the new initiatives will spur a return to a more active participation of trade unions and governments in the regulation of labor.
Hirschman, A.O. 1970. EXIT, VOICE, AND LOYALTY: RESPONSES TO DECLINES IN FIRMS, ORGANIZATIONS, AND STATES. Cambridge, MA: Harvard University Press.
© Copyright 2008 by the author, Lawrence E. Rothstein.