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Vulnerability at Work: Legal and Policy issues in the New Economy

Increasing vulnerability and insecurity at work is a feature of the new economy.  In general, workers now have less job security and less power at work; many have less secure sources of income; increasing numbers of workers labour in inadequately protected work environments.  In addition, there are growing numbers of workers who are especially vulnerable, because they generate inadequate income; because they are engaged in marginal self-employment and are not legally recognized as employees; because their work is either inadequately protected and regulated or falls outside of the regulatory net governing work altogether; because they have conditions or obligations that impinge on their capacity to participate in the labour market; and/or because they are subject to particular forms of discrimination and disadvantage at work.

These phenomena are inseparable from the transformation of work in the new economy and the dominant trends in respect of the regulation of economic activity. This report discusses the main trends in governance and regulation that may affect the vulnerability of workers, the assumptions and concepts that animate those trends, key issues and debates that bear attention, and questions that should be at the forefront when policy and regulatory design in the workplace is at issue. 

Part I discusses the role of law in vulnerability at work. It suggests that, rather than an inevitable feature of the new economy, vulnerability at work is related in important ways to the legal regimes that structure work. Because legal rules and institutions legitimize workplace norms and allocate resources, power, risk and responsibility among different groups and institutions, they are implicated in both the production of and the response to vulnerability at work.

The norms and assumptions undergirding the current regimes governing work have been shaken by transformations in the geography of production and the regulatory reach of the state; the organization of work; and the identity of the worker.  The result is a regulatory gap leaving workplace rules and standards less functional and responsive to the needs of workers.

As described in Part II, these changes have been accompanied by the rise of good governance norms in the global economy. Although often identified with global economic integration, the promotion of good governance should be understood as a distinct institutional project that aims, inter alia, to facilitate transactions and investments and promote growth and efficiency, largely through transformations in the role of the state and greater reliance on market forces and private and civil society actors. As a regulative ideal, good governance now plays a powerful role in contemporary policy and regulatory debates.  The final part suggests that, notwithstanding the rise of a normative market model associated with good governance, there remains a great deal of variation in the institutions of market societies and intense debate over their contribution to growth.  The focus on efficient regulation has important implications for workers, as the rules and policies associated with the promotion of efficiency contain embedded distributional choices and often merely shift costs in ways that contribute to the production of vulnerability at work.

Part III discusses the dominant regulatory trends in labour markets, labour market flexibility and the protection of ‘core' labour rights and attempts to analyze the ways that they are shifting the premises and objectives of labour market regulation. On the assumption that many labour market rules and standards and job protections are inefficient and dysfunctional in a knowledge-based global economy, flexibility advocates propose that labour markets be ‘deregulated' and workers become labour market entrepreneurs through continuous upgrading of skills and adaptation to a constantly changing labour market.  In practice, labour market deregulation takes active and passive forms; the result in both cases is the exclusion of increasing numbers of workers from the labour market rules and protections available to employees.

There is also a new emphasis on protecting ‘core' workers' rights associated with the introduction of human rights norms into the regulatory debate around work. However, basic anti-discrimination and associational rights aside, labour market regulation now tends to be conceptualized as a question of economic policy rather than a question of the worker rights and entitlements; there is also less recognition of the conflict interest between workers and employers and the role of power in the workplace and the employment contract.

Current governance and flexibility agendas place great emphasis on human capital in labour market policy.  However, the regulatory and policy changes associated with a human capital growth strategy remain uncertain and contested, as are the assumptions and effects of greater labour market flexibility.  In practice, a broad range of responses may be needed to actually operationalize a knowledge-based economy in which most people can expect to ensure their economic security and well-being through labour market participation

Among the key sites of concern for vulnerable workers are the concept of the employee and access to workplace representation. Rethinking the basis on which economic security and protection to workers is delivered is crucial now that job tenure is less secure. Attention to representation is crucial both to empower vulnerable workers in respect of their employees and to foster greater attention to the interests of workers in the formulation of rules and policies at work. The discussion closes by considering what might be at stake in the shift toward process and participation rights, decentralization and the de-emphasis on substantive worker rights.

Part IV considers the ways in which vulnerability at work intersects with equality concerns, suggesting that regulatory prescriptions focused on economic efficiency narrowly understood will be incapable of responding to a variety of forms of workplace vulnerability and disadvantage that create vulnerability at work.  While policies and rules that ameliorate workplace discrimination and disadvantage may overlap with those that promote labour market participation and the accumulation of human capital, it is unsafe to assume that social concerns can now be collapsed into economic concerns. There may be conflicts at the level of institutional design, as equality-promoting rules are often perceived to be inefficient. Moreover, neither markets nor human capital strategies ‘solve' for problems of systemic discrimination on their own.

In order to probe what is at stake in these regulatory debates, the discussion takes up the feminization of the workplace, suggesting that it raises a distinct set of issues around both efficiency and equality that must be addressed now that the workplace is no longer predominantly male.  Much of the disadvantage of women in the labour market can be attributed to the fact that the costs responsibilities for unpaid or ‘reproductive' labour are unequally assumed by men and women and externalized from the costs of production and the organization of work.  This suggests that the crucial issue is the structure of workplace norms and the position of different groups of workers in relation to those norms.

The report concludes with a set of specific questions that should be raised in order to address the questions of flexibility, human capital and equality together.