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

A. The role of law

Being, or becoming, a vulnerable worker, is not simply a matter of the characteristics of the individual worker. Nor is it something that can be attributed solely to the changed economic context in which workers now operate. Vulnerability is a function of how work is structured and how risks and costs are allocated among workers, their employers, the state, and society at large.

Vulnerability and insecurity at work can arise from:

1) the distribution of risks, costs, benefits and powers among workers and employers;

2) the (in)capacity of workers to conform to or perform according to workplace rules and norms;

3) the allocation of work among workers, including unpaid work;

4) (in) access to resources; 

5) discrimination, either directly on the basis of a particular characteristics or grounds or through their intersectional operation or indirectly, because of the connection between these grounds and the factors listed above.

Although there is a variety of forces at work, legal rules and institutions play a role in all of these forms of vulnerability.  Legal entitlements and institutions both produce and legitimize the norms governing work. They affect the distribution of resources and power; they spread and shift risk among the parties involved in production; and they allocate responsibilities among different social spheres and institutions such as the state, firms, families or households, and the wider community. They constitute the incentive structure in which firms make decisions about profitability and workers make decisions about whether and where to work. Legal rules and categories also determine the boundaries of the enterprise and the limits of enterprise liability in production. Legal rules and institutions both reflect and constitute the world of work; they both create and remedy inequalities and injustices among different groups of workers. Thus, whatever the force of economic pressures in the new economy, law is involved to some degree in both the response to and the production of workplace vulnerability (Conaghan, Fischl and Klare, 2002).

Legal and institutional choices matter enormously to the positions of workers in general, as well as to the prospects of particular groups of workers. The increasing vulnerability, insecurity and economic disadvantage for workers at the current time are a consequence of shifts in both the economic context and the rules and norms governing work.  They arise from changes in the geography of production, the organization of work, the identity of workers and either 1) the lack of regulatory and policy responses to those shifts; 2) regulatory ‘lag'; or 3) policy and regulatory responses that are inadequate or uncongenial to the interests and needs of workers, often because they aim to create flexibility and reduce costs for employers.

The legal regulation of work operates at both the material level and the normative, ideological or discursive level.  When attempting to identify the role of law in shaping workplace norms, generating poor distributive outcomes for workers and increasing the amount of workplace vulnerability, it is crucial to attend to both levels. Assessing the role of law in worker insecurity involves documenting the gaps between the existing rules and policies governing work and the emerging world of work itself, noting the discontinuities that have arisen between work and its regulation. However, it also requires analyzing the effects of shifting norms and assumptions respecting the nature of work, the organization of production, and workers themselves.

B. Globalization, the new economy, and the new world of work

One of the features of an increasingly integrated global economy is a disjunction between regulatory and productive space (Arthurs, 1996). In the immediate post-war years, states had relatively complete and functional regulatory power over the economic activities within their jurisdictions (Kapstein, 1999). This relationship has now loosened; no jurisdiction necessarily ‘occupies the field' in respect of the regulation of work. Economic activity and regulatory scope no longer necessarily coincide. Much economic activity traverses borders and the production of goods and services increasingly involves inputs, including labour, from multiple locales. As a result, it may be impossible to identify where goods are manufactured and difficult or unhelpful to know where a corporation is located.

Just as important is that work has been radically reorganized.  No longer is the Fordist enterprise the norm. Production has been flexibilized (Piore and Sabel, 1984), the enterprise has been vertically disintegrated, and production is increasingly diffused among complex networks of contractors, subcontractors and homeworkers (Castells, 2000). The type of work has also changed: manufacturing is in decline, and increasing numbers of workers are engaged in service work, much of which is low-skill and low-wage. Finally, the social norms governing the relations and expectations between workers and their employers in respect of critical issues such as remuneration and job security are undergoing transformation (Stone, 2001). For all of these reasons, rising number of workers labour in part-time, casual, contingent, insecure, and low-paid work.

In addition, the identity of the ‘normal' worker has changed. Existing labour and employment rules and social protection policies were modeled on the assumptions that the average worker was a male head of household who could be expected to have relatively uninterrupted labour market participation in full-time work until the normal age of retirement. These assumptions were institutionalized in a series of social protection policies and workplace rules and practices that were designed to protect such workers against a set of defined risks, redistribute income to them over their lifetimes, and enable them to maintain dependents. However these embedded assumptions about who workers are and what they require are increasingly unsafe, in part because of the feminization of the labour force (ILO, various years; Standing, 1999). Myriad interrelated forces, ranging from changing gender norms, the diversification of family forms and the sheer instability in household structures, have provoked the feminization of work; they have been reinforced by declines in real income over the last generation that have rendered the old male-breadwinner model inadequate to sustain a household in any event. The upshot is that the average worker is now as likely to be female as male; she may well be a head of household herself; in any event, she is as likely to be supporting dependents as her male co-worker.  However, she is also likely to have different patterns of labour force participation; face different risks both in and out of work; and experience competing obligations largely unknown to her male coworkers.  

The gaps and discontinuities between existing labour and employment rules and standards and the actual world of work makes those rules and standards both less functional and less responsive to the contemporary needs of workers. This regulatory gap is creating a massive and growing gap between protected and unprotected workers, ‘insiders' and ‘outsiders' in the labour market:  legal entitlements and social protections designed for employees within a standard employment relationship both apply to a diminishing number of workers and reflect a set of assumptions that fails to correspond to the actual circumstances of increasing numbers of workers.  Indeed, they may not only fail to protect many of these workers, some rules may actively disadvantage them.  Another is a significant redistribution of entitlements and power away from workers as a group. A major function of labour and employment rules and standards is to redress the characteristic imbalance of power between workers and their employers in labour markets (Smith, 1776; Polanyi, 1944), both by facilitating collective bargaining and by guaranteeing workers a basic floor of entitlements. The regulatory gap lessens the capacity of labour market institutions to achieve such objectives; to the extent that they fail to deliver on these goals, substantial numbers of workers are measurably worse off.