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

A. Labour market flexibility

Since the late 1980s, labour market flexibility has formed an integral part of the idea of good governance (Williamson, 1993; Standing, 2000).  Yet while flexibility arguments are circulating in virtually all states, industrialized and developing, there is wide variation in how industrialized states are responding to the transformation of work in the new economy and the increased insecurity for workers. Although there are important variations, flexibilization is arguably the dominant trend in relation to labour market regulation in Anglo-american jurisdictions. The economic case for labour market flexibility rests on the theory that labour market regulations constitute a source of inefficiency that impedes growth.  In the standard neoclassical account, labour market rules and institutions, like other regulatory ‘interventions', distort the optimal operation of labour markets by introducing rigidities, raising wages above their market price, and imposing higher costs on employers. This, in turn, costs jobs and impairs growth; it also introduces distributive problems into labour markets, protecting ‘insiders' at the expense of outsiders (OECD, 1994; IMF, 1999; World Bank, 2003). The standard remedy is to reform labour and employment laws to decentralize bargaining, lessen the extent of job security, and restrict access to unemployment benefits and other income entitlements (IMF, 1999). In addition, proponents of deregulation often expressly argue that the rewards to work should be destandardized in order to spur greater effort and promote growth.  According to this argument, compensation should be based upon merit and demonstrated productivity rather than on seniority and other ‘non-market' modes of remuneration.

While calls to diminish labour markets protections have always been heard from some quarters, they have now received an additional boost as they seem to overlap with the specific demands and characteristics of the new economy. In recent years, it has become accepted that the relations of production needed to thrive in the new economy are flexible ones (Piore and Sabel, 1984). Regulating for competitiveness in a world of flexible production is said to require increased room to maneuver for employers on the one hand and increased skill, responsibility and initiative among employees on the other. The claim is that this makes old ideas about labour market regulation obsolete, and the rules and institutions generated under them dysfunctional or simply irrelevant in the new economy. In their stead is a new regulative ideal: employees should become ‘partners in production', assume greater risk in the labour market and adopt an entrepreneurial approach to work and economic security. These transformations in economic organization have induced a wide-ranging reconsideration of existing labour and employment laws, with scholars in a variety of disciplines and from multiple jurisdictions proposing ways to reinvent norms and institutions to accommodate the imperatives of flexibility and change at work (Barenberg, 1994; Stone, 2001; Collins, 2001).

Another important component of the current narrative on labour market regulation is that labour market regulation and social policy should be consistent with and structured around the demands of the emerging ‘knowledge-based' economy (Collins, 2001; Minister's Roundtable, 2002; Courchene, 2001). It now approaches conventional wisdom that the road to success in the new economy is through high-skill, high-value added production (World Bank, 1999; Chaykowski, 2002). A central element of the knowledge-based approach to economic growth is a focus on developing the human capital of workers, in particular through investments in education, training and skills development.  In this model, economic security for workers is expected to come not from longtime attachment to particular firms or employers, but from the possession, refinement and successful marketing of skills by the individual worker in a constantly shifting labour market (Stone, 2001). Thus, the focus is on policy and regulatory interventions that are directed toward increasing workers' capacity to be productive workers. Active labour market policies – those that assist workers in returning to work – are preferred over employment standards protections or passive policies that merely support workers' income during periods of unemployment (Porter, 2003).

Despite the belief that flexible production and ‘knowledge-based' economic growth represent the future of work and the deep interest in regulatory reform to support this path, it seems clear that these developments do not pose the only, or even the most pressing, regulatory problem of the new economy, especially in respect of vulnerable workers.  The new economy also produces significant numbers of relatively unskilled jobs, many of which do not pay well enough to allow workers to support families above the poverty level.  Indeed, the emergence of “mcjobs” and the phenomenon of “Wal-Martization” appear to be as representative of the changed terrain of work as the emergence of knowledge- and skill-intensive work (Yakabuski, 2001; New York Times, 2003). Many of these jobs, especially relatively low-skill service jobs, seem likely to remain an integral part of industrialized economies such as Canada. Enhancing the role of skill in such work in order to increase the income security of workers may be a limited strategy, as such work is expressly organized to require little skill and render workers easily replaceable. Although they too may experience ‘flexible' work relations, such workers typically lack significant, or any, control over the terms and conditions of their work. The best prospects for assisting such workers may lie in better access to workplace representation and collective bargaining and perhaps enhanced employment standards such as higher minimum wages. The case for reforms that empower low-wage and low-skill workers and mandate improvements to their working conditions and compensation levels is especially compelling to the extent that such jobs are not merely waystations on the road to better ones, but effectively the future of work for significant numbers of workers.

It seems clear that for many workers there are increasing returns to education in the new economy.  Yet, it may be unsafe to simply assume that even relatively highly-skilled workers can automatically expect to achieve income and employment security on the basis of skills alone, especially if the demand for such workers declines. It has been recognized for a significant period of time that global economic integration puts jobs such as manufacturing at risk in high wage industrialized states.  However, as the number of skilled workers in countries such as India and China increases, opportunities for ‘offshoring' or ‘outsourcing' white collar work also increase, creating new sources of competition and new forms and sites of vulnerability for workers. How much this is a serious issue for the domestic labour markets of industrialized countries is currently unknown; many displaced workers may indeed be absorbed in equivalent or better jobs, as conventional economic wisdom proposes.  However, it is unlikely that labour market restructuring in white collar work will be entirely painless or costless; rather some, perhaps a significant number, will end up worse off. Because very few workers in such sectors have any form of collective representation – indeed, if they are classified as managerial or supervisor employees they may be explicitly excluded from collective bargaining law - they are badly positioned to negotiate with their employers over changes in the terms of work or to craft solutions that lead in directions other than a decline in compensation, job security and levels of work. 

Notwithstanding these developments, so far labour market flexibility has largely functioned as a code word for lowering entitlements and security for workers (Standing, 1999b). One the one hand, there are some new sources of ‘time' flexibility for workers.  For example, some jurisdictions have introduced new entitlements to family leave under provincial employment standards legislation[1]. However although leave is now available, the cost of taking it is still imposed on workers, making it less useful, and perhaps unavailable, to the most economically vulnerable workers. More paid leave is also available in through extended entitlements to maternity and parental benefits under the federal Employment Insurance Act.  In addition, workers in federally-regulated industries, as well as those in provinces who have made the necessary amendments to their employment standards acts, are entitled to six weeks of benefits in conjunction with leave to care for a critically ill family member[2].  But despite the introduction of measures to allow workers some time off work to meet their most pressing obligations of care, workers are also likely to be squeezed at the other end as a result of changes to workplace regulations which exacerbate the time demands of work (Fudge, 2001). In the aggregate, rather than increase the control that workers have over their working hours, so far regulatory and policy changes have largely reflected employers' demands for greater flexibility in the allocation of working time, diminished regulatory burdens and lower payroll costs.

Labour market flexibility or ‘deregulation' takes both active and passive forms (Standing, 1999b). Examples of overt or active deregulation in Canada include: exemptions from normal workplace rules for particular classes of employees; alterations to employment standards that increase the latitude of employers to organize work and/or lower or remove protections for workers[3]; changes to collective bargaining rules that exclude particular classes of workers from the protections afforded by labour relations legislation[4] or increase the barriers to collective bargaining in general[5]; and restrictions on access to employment benefits or declines in the amount of income replacement such benefits provide.[6]

Although overt attempts to diminish labour market protections are likely to attract more attention, passive labour market deregulation may in fact be more significant to the position of workers in the labour market and the production of precarious work. Passive labour market deregulation results from the failure to change employment standards and collective bargaining rights so that the degree and extent of protection afforded to workers is effectively reduced; a classic example is the failure to raise the minimum wage so that its real value is eroded over time. However, passive labour market deregulation can also occur through the irrelevance, either practical or juridical, of existing regulatory, protective and redistributive mechanisms to emerging forms of work or to growing numbers of workers.  In short, because workers in different sectors and different forms of work are differentially empowered and protected by employment standards and collective bargaining laws, labour markets can be substantially deregulated simply by the failure to change labour market rules and institutions as the nature and organization of work changes.

Because of the transformation of work and the reorganization of production, growing numbers of workers find themselves in atypical or contingent employment relationship, that is, work that deviates in some way from that which we think of as ‘normal' work: full-time, long term work involving regular hours with a single employer.  Some workers may be employed by those who are not themselves substantially in control of the degree, conditions or compensation of the work their workers perform. This may be because workers are in triangular employment relationships and are formally employed by agencies who supply their labour to others.  It may also be because workers find themselves in newly competitive labour markets: here, employers may themselves have little room to maneuver on wages and working conditions absent a collective solution; they may also be constrained by the choices and decisions of those higher up in the production chain. Finally, some workers may no longer be employees at all. Significant numbers of workers are self-employed; the majority of those are own-account workers (Human Resources Development Canada, 2000), some of whom find themselves doing essentially the same jobs for their former employers.  Although they are classified as independent contractors, many have little actual control over the terms and conditions of work and many generate less income than employees. While some may be classified as dependent contractors and have access to some of collective bargaining, and even occasionally common law, benefits of employees (Langille and Davidov, 1999), most are simply on their own, beyond the reach of employment protection and unable to benefit from collective action, even though they may be among the most vulnerable workers.

Where work is vertically disintegrated (Collins, 1990) and organized in networks or production chains of legally independent firms and employers, the variation in the status, working conditions and compensation of workers can increase dramatically. While some workers typically continue to have access to full-time relatively well-compensated and secure work, many others experience increased job insecurity, lower compensation, and diminished access to workplace representation.  Indeed, part of the point of the reorganization of production is often to lower labour costs and avoid the employment obligations that would otherwise be incurred.

However, employment standards and collective bargaining rights are not in practice equally available even to all employees (Fudge, 1991). In part, this is because those engaged in atypical work relationships in practice have less access to collective bargaining and employment standards protections, even though they are formally covered by the same regulations as employees engaged in ‘normal' work. It has long been observed that while collective bargaining rules serve those in fixed, integrated, medium to large operations – those whom they were originally designed to serve - relatively well, workers who labour in smaller operations, vertically disintegrated, subcontracted or networked production in dispersed locales often find it virtually impossible to organize, or to bargain successfully when they do succeed in achieving certification. Thus, passive deregulation may result from continued reliance upon workplace entitlements that are either designed for or restricted to those in full-time employment where the number of workers in engaged in atypical forms of work is rising.

The changing nature of work is also critical to the deregulation of labour markets. Collective bargaining is also better entrenched in some sectors, such as manufacturing, resource extraction and the public sector, than others; although some inroads have been made, those in retail, service and clerical work are notoriously underserved by collective bargaining. These issues are deeply relevant to the question of vulnerable work as service jobs are proliferating in the new economy while manufacturing jobs are in decline.

Workplaces can also be effectively deregulated through a lack of adequate enforcement mechanisms. Under-enforcement is a persistent risk in governance models based upon fiscal austerity and a reduced regulatory presence of the state in the economy; it is also a growing problem in the new economy (Hepple, 2002).  But workplaces can also be effectively deregulated because of declines in union representation, as the presence of a union and access to arbitration is often needed to ensure the actual enforcement of employment standards and human rights; thus access to collective bargaining and the maintenance or improvement of employments standards are in practice deeply intertwined. For example, arbitration provides a quick and protected means to enforce employments standards and human rights law as well as the rights negotiated under collective agreements in unionized workplaces. Because of fears of reprisal, as well as the well-known problems with the functionality of the employment standards and human rights regimes as a whole, real access to substantive workplace standards and human rights protection may be, for all practical purposes, simply unavailable to non-unionized employees.

Finally, it is important to note that passive deregulation can also occur simply through the failure of workplace rules and institutions to reflect the real costs and risks of participation to those actually working in the labour market.  As those costs and risks change and grow, in part because of the changing composition and sheer diversity of the workforce itself, the number of vulnerable workers may increase. As discussed later, many women workers carry additional costs at work because of obligations of care to children or other dependents. They also tend to have different career trajectories and patterns of labour force participation than men. This in turn means that they have more difficulty accessing workplace benefits that are linked to job tenure; it may also mean that they require new forms of protection, employment and social insurance, and public goods and services (Supiot, 2001; Auer and Esping-Anderson, 2002). Because of the feminization of the workforce, these cannot be considered marginal or secondary problems; rather, larger numbers of workers now face persistent vulnerability at work because of inadequate institutional and regulatory responses to the intersection of work and non-work obligations.

These are regulatory and policy issues not merely economic problems. Addressing them requires attention not only to labour and employment rules but to employment insurance, pension schemes and the provision of other goods and services. They are also deeply affected by the general decisions and choices around funding for the monitoring and enforcement of administrative laws. 

A good part of the difficulty workers in atypical work relations or those in the service, retail and clerical sectors experience in accessing workplace representation and exercising collective power can be attributed to the specific characteristics of the labour relations system which obtains throughout North America. The Wagner Act regime sets up numerous barriers to effective representation and collective bargaining, the most important of which pertain to bargaining unit determination and the conditions and procedures governing the certification and bargaining processes. There have been numerous proposals to alter representation and bargaining structures to facilitate access to collective bargaining on the part of those who are now excluded, whether because they work in small or dispersed locales, because their attachment to the labour force is tenuous or interrupted, or because they derive their income from more than one employer (Friedman, 1994; Cobble, 1994; MacDonald, 1998). But it is also important to reduce the competition among employers in respect to wages and working conditions; in some low wage markets, some form of sectoral bargaining is almost certainly required if there is to be any realistic prospect of improving the position of workers.  A variety of arrangements might be compatible with current collective bargaining law.  For example, the decree system in Quebec which extends the benefits of bargaining to unrepresented workers in sectors where collective agreements have become dominant has functioned for a long time, although it too is subject to attack in the current regulatory climate because of concerns about competitiveness (Vallee and Charest, 2001). Even within the Wagner Act collective bargaining legislation, there are craft-based models for managing the complexities of multiple employers and short job tenures; see for example the special provisions for representation and bargaining in the construction industry in Ontario[7].  But although the deficiencies in respect of access to representation have been explored and documented by labour scholars for some time, recent reforms to labour relations legislation have not, in general, been directed towards addressing the barriers in the certification process; indeed, some reforms have arguably made it more, not less, difficult for employees to obtain certification at all[8].

B. Core labour rights

Along with the trend toward aligning labour market regulation with efficiency and flexibility goals, there is also a move to revive the independent normative significance of a limited set of ‘core' labour rights (ILO, 1998; Rittich, 2003); this trend is particularly visible at the international and regional levels. The new focus on core labour rights reflects the increasing use of international human rights norms, arguments, instruments and institutions to address various aspects of the ‘social deficit' of globalization, and the problems of poverty, inequality and insecurity arising from the new economy. As human rights, core labour rights represent a minimum set of worker entitlements that are supposed to be applicable in every context; they are also, in theory, economically uncontroversial (OECD, 2000).  While core labour rights represent an effort to reground the normative consensus around the rights and entitlements of workers in the global economy, to what extent the introduction of such ‘soft' legal norms will actually assist vulnerable workers is uncertain (Rittich, 2003). Although core labour rights include anti-discrimination norms and freedom of association and the “effective recognition of the right to collective bargaining” (ILO Declaration, 1998), they are expressly promotional in nature, and there remains a great deal of resistance to treating them as legal entitlements that should be institutionalized and enforced (Rittich, 2003). They cover only a limited number of rights in any event: they are explicitly designed to exclude labour standards and other substantive rights that might impair comparative advantage in trade (ILO, 1998).

In addition, the force of international labour and human rights norms in the field of work remains a question mark in Canada. While the Supreme Court now takes increasing note of international norms in its decision-making processes[9], it has long declined to conclude that specific legal or institutional entitlements such as the right to strike or access to general collective bargaining legislation follow from the constitutional entrenchment of worker's freedom of association[10]. 

The relatively weak protection workers receive through international and constitutional rights should be juxtaposed to the countervailing international trends towards ensuring more extensive ‘hard' rights for investors and entrepreneurs through bilateral and multilateral trade and investment treaties; unlike core labour rights, these are now institutionally enshrined[11]. Not only are they enforceable entitlements; as some commentators have observed, international agreements increasingly seek to ensure that investor property and contract rights approach ‘constitutional' status (Schneiderman, 2000).  It is important to consider how such rights might intersect with efforts to reduce vulnerability and empower workers in the current economy.  For example, the entrenchment of investor property and contract rights under chapter 11 of NAFTA potentially restrains responses at the national and provincial levels to a variety of workplace problems, as such rights grant non-national investors the power to challenge policy or regulatory changes that increase the costs of operating undertakings or impair the future income streams of owners[12].  Among the regulations targeted so far under chapter 11 are environmental standards; however, occupational health and safety standards raise similar issues and, along with other workplace standards, could also be the subject of a chapter 11 challenge.

The trend toward regulating for labour market flexibility and ensuring core labour rights for workers are distinct regulatory strategies.  Yet although they are associated with different constituencies and emphasize different goals and objectives, there is also overlap in the approaches.  One of the places that they converge is in the emphasis placed on various forms of worker participation and process rights on the one hand and the diminished reliance on substantive entitlements for workers on the other. Consistent with the both entrepreneurial model of work and a focus on core labour rights, where workers do see enhanced legal entitlements, they now tend to be in respect of their individual rather than collective rights. Workers in many countries have access to new forms of anti-discrimination rights due either to judicial decisions or legislative action, even as collective bargaining and other workplace entitlements are actively and passively eroded (Hepple, 2002). For example, in Canada, there is now a broad conceptual framework with which to challenge discriminatory workplace practices and expanded access to remedies under recent human rights decisions of the Supreme Court[13].  However, constitutional recognition of the collective rights of workers remains tightly circumscribed, as the Court continues to sharply distinguish the protection of workers' freedom of association from the protection of any of the collective activities for which workers traditionally organize.

The precise relationship between flexibility and core labour rights strategies and the division of labour between them remains in question. As regulatory trends or strategies, are they in conflict or are they complementary? If they are complementary, which regulatory questions are matters of workers' ‘rights' and which are questions of employer ‘flexibility'? Who determines how they are classified, and on what basis?  What are the implications for those engaged in vulnerable work of these exercises in categorization and the allocation of entitlements that results?

C. Changing regulatory norms: Assessing the shifts

The current emphasis on labour market flexibility on one hand and the protection of core labour rights on the other reflects changes in how we think about, and argue for, labour market regulation. A number of shifts relevant to the position of vulnerable workers can be identified.  First is a radical change in the arguments about what labour market regulation is for. 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 (World Bank, 2001; Courchene, 2002): rather than the frame in which economic activities are conducted, worker rights are now instrumentally evaluated in terms of their contribution to efficiency. The legal rules and policies governing work have traditionally served a variety of social and economic functions; foremost among them are altering the balance of power between workers and employers, redistributing risk and resources among workers, and establishing basic terms and conditions of work. As economic rationality comes to constitute the metric by which the legal protections and entitlements of workers are evaluated, these other functions are displaced. The shift to the efficiency frame is significant: the risk is that it will delegitimate and undermine labour market rules, institutions and policies that serve distributive and other normative objectives unless they also persuasively and demonstrably serve the ends of efficiency and growth.

Second, the emerging entrepreneurial or ‘partners in production' norm represents a changed view of the alignment of worker and employer interests, one that diminishes recognition of the specific risks to workers in labour markets and the role of power in the employment relationship. This shift is most visible in contrast to the regimes and paradigms that now regulate work. The unitary model informing the common law rests upon the subordination of the employee to the employer's interests and control in exchange for a certain degree of security and protection at work; it also presumes a common interest between employers and employees in the context of work. The industrial pluralist model underpinning collective bargaining law in North America, by contrast, presumes the presence of conflicting interests between employers and employees: it is based upon the idea that workers will systematically get the short end of the stick in employment bargains unless the characteristic imbalance of power between workers and employers is redressed through legislative intervention enabling collective bargaining.  Employment standards legislation is also a response to the power differential between workers and employers in the market for labour; however, it addresses the problem by placing a floor under the employment contract in the form of substantive contractual terms. The entrepreneurial model by contrast assumes away both the goals of worker protection and security, except through the enhancement of human capital and skill, and the problems of conflicting interests and disparities in power between workers and employers.  Modeled on the idea that economic success lies in a harmonization of interests between employers and workers, it seeks to analogize employment relationships to commercial contracting relationships in which workers and employers are ‘joint venturers' in search of productivity and profitability.

Although the entrepreneurial model may approximate the nature of work relations in the new economy in the case of well-positioned employees (Hyde, 2003) – those who have never been the object of employment standards and collective bargaining laws in any event – the extent to which it applies to other workers seems doubtful. Labour markets regulated only by employer property and contract rights have historically been a source of vulnerability and disempowerment rather than security for workers; the question is whether, and why, we should expect that they will entail more actual or substantive freedom and security for workers at the current moment than they have in the past. It is important to recall that, despite the current emphasis on cooperation over conflict in production, because of these legal entitlements, employers still retain ultimate control over the direction, organization, even the existence, of work in the new economy. Whatever their force, norms stressing the need to harmonize worker and employer interests for success risk obscuring the extent to which the interests of labour and capital continue to diverge as a matter of law. Moreover, the role of law in constituting the interests of workers and employers is not merely a matter of the absence or presence of employment standards or rules enabling collective bargaining. Under corporate law, for example, workers are treated as outsiders to the firm, something that provides a powerful inducement to firms to ignore or impair the interests of workers as they attend to the demands of insiders, shareholders who generally reward their efforts to reduce labour costs. Thus, any move to harmonize relations between workers and employers without impairing workers' security would seem to require attention to the structure of corporate law too (Bernard and Deakin, 2002)

Despite the fact that enhanced labour market flexibility is commonly referred to as labour market ‘deregulation', flexibility does not represent, and is not intended to lead to, an absence of law or state power the employment relationship. Although flexibility arguments are linked to the idea that success in the new economy requires less state presence and oversight, labour market ‘deregulation' is better described as ‘reregulation': it involves a realignment of state power and a redistribution of entitlements among workers and employers, resulting in a legal framework in which workers' entitlements are eroded and those of employers become correlatively more significant in structuring the employment relationship. Although economic forces matter too, this redistribution of entitlements affects the allocation of risks and costs in production and helps determine the rewards that accrue to the participants. Thus, flexibility norms diminish the extent of workers' ‘countervailing power' at the very moment when the imbalance of bargaining power between most workers and their employers has already sharply increased due to economic and technical changes (Klare, 2000).  For these very reasons, ‘deregulatory' strategies are likely to increase the numbers of vulnerable workers; they may also enhance the job, employment and income insecurity experienced by many who might fall outside the category of vulnerable workers.

D. Knowledge, flexibility, and human capital: Regulatory issues

Human capital is increasingly identified as a central component of success in a flexible, ‘knowledge-based', globalized economy. The advocates of labour market flexibility propose that the interests of workers now lie not in labour market rules and institutions but in skills training and continual adaptation to the changing demands of the market. However, even if they are buttressed by core labour rights, such suggestions do not respond to many of the most obvious risks and eventualities, ranging from loss of employment, variation in income, and redundancy in skills, that workers can expect to encounter in a newly volatile economy; nor do they provide explanations as to how the ‘old' risks, illness, disability, and loss of income from obligations of care – are to be managed.  More fundamentally, the actual policy and regulatory implications of the rise of the knowledge-based economy and flexible modes of organizing work and production remain uncertain and deeply contested rather than known and obvious. These debates and uncertainties are crucially important to the question of vulnerable work in the new economy. 

Current ‘deregulatory' models rest upon a set of assumptions and theories about what contributes to the competitiveness of firms and the growth of economies as a whole:  detailed regulatory changes are prescribed based on theories about the efficiency effects of legal rules and institutions. However, rather than certainty, there is an enormous amount of conflict about these very assumptions. There are starkly opposing economic accounts of the role of labour market rules and institutions in the competitiveness of both firms and economies. Critiques of neoclassical economic assumptions about the operation of labour markets have long been available on both theoretical and empirical grounds (Hirschman, 1970; Freeman and Medoff, 1984; Solow, 1990). For example, there are persuasive accounts, many of which are rooted in institutional economics, about the extent to which labour market standards and employment protections can contribute to, rather than detract, from labour market efficiency (Deakin and Wilkinson, 1994). These arguments and explanations have considerable purchase in contemporary debates over labour market transformation in Europe (Supiot, 2001; Auer and Gazier, 2002).  Even if labour market flexibility remains a central goal, it can be understood in a variety of different ways (Fredman, 1997). As the current debates around ‘flexicurity' in Europe disclose (Blanpain, 2002), arguments for greater flexibility can militate in favour of enhanced legal entitlements for workers too[14]. The upshot is that a large number of labour market rules and social policies arguably contribute in crucial ways to the maintenance and support of human capital and thus contribute to competitiveness in a knowledge economy. Thus, rather, than dismantling labour market institutions, what may be crucial in the new economy is revising and reforming them.

It seems relatively clear at this point that, rather than simply labour market deregulation accompanied by the recognition of a few core rights, a range of responses may be needed to actually operationalize a knowledge-based economy in which most people, for the duration of their working lives, can realistically ensure their economic security and well-being through labour market participation (European Commission, 1999). Such responses include the obvious – enhanced spending on education, skills and training – but extend to issues such as child care and early childhood education, health and home care, welfare and social protection, housing and many others that in North America , with the important exception of Quebec, have traditionally been regarded as either peripheral to the question of work or simply ‘private' concerns.

E. Regulation at work: Key sites and concerns

As the discussion of human capital suggests, a wide range of regulatory and policy concerns may be implicated in the production of and response to vulnerability at work.  For example, as a consequence of increased labour migration in the global economy, citizenship, immigration status, and other issues of legal status may also be implicated in the vulnerability and economic security of growing numbers of workers.  Moreover, workers in Canada may be affected by trends and decisions elsewhere.  In a globalized world, the regulatory calculus needs to shift outward. If domestic workers are inevitably affected by global processes, and if growing numbers of workers have attachments to more than one jurisdiction, then it seems important to think about the external as well as the internal effects of policy and regulatory choices.  One of the challenges is to find ways to recraft security for workers at home that do not disadvantage, and that may even assist, workers beyond our borders.

At the present time, improving prospects for vulnerable workers requires attention to a number of key sites, issues and trends.

i. Rethinking employment

As the literature on self-employment and contingent work discloses, one of the central problems in the new economy is that, as a consequence of the legal distinctions between workers who are employees versus those who are classified as independent contractors, employment standards and trade union representation and collective bargaining are not available to many of the most vulnerable workers. For this reason, there is overwhelming consensus among labour scholars that access to labour and employment protections should no longer be limited to employees, certainly as the category has traditionally been defined (Davidov, 2002; Fudge et al, 2002).  Thus, a threshold question is where, and when, the employment relationship remains the appropriate vehicle for delivering workplace protection and income security for workers (Langille, 2002). 

However, the transformation of work raises more fundamental questions about the categories and assumptions that we use to regulate work and protect and empower workers.  Although many forms of social benefits and protections have traditionally been delivered through work, to the extent that workers' attachment to the workplace or even particular sectors is attenuated, it becomes more important to think of alternative bases and modes of ensuring economic security and self-sufficiency for workers. In a world of increasingly unstable and short term work relationships, the focus may need to shift to the protection of occupational status and compensation for time spent out of the labour market on tasks such as training and unpaid domestic work (European Commission, 1999); the recognition of social rights that are not linked to work but are simply incidents of citizenship; and/or the extension of basic human rights and entitlements that are available to all without respect to civil status.

ii. Representation at work

Both the workplace and the economy are being re-organized at a moment of unprecedented weakness in worker representation and voice. Legal reforms to enable and promote new forms of worker representation are crucial to improving the status of workers in the new economy, particularly the most vulnerable workers.

The lack of voice has significant consequences for workers at two levels: the workplace and the legislative/political arena. In the workplace, the failure to introduce new voice mechanisms and to ensure access to union representation to workers in non-standard forms of work and in sectors badly served by existing collective bargaining law leaves many of the most vulnerable workers with no means of bargaining collectively over the redistribution of risks and rewards or influencing the re-organization of work. This ‘representation gap' contributes to the downward pressure on wages and working conditions and increases economic and other forms of vulnerability at work.

This weakness at the bargaining level is reinforced by the weakness of workers at the political level. One of the results of the asymmetrical power of workers and capital in the new economy is that employers tend to have privileged access to the mechanisms of policy and regulatory reform and a great deal of influence in charting the direction of reforms. Workers' capacity to effect regulatory change has been correlatively weakened; this weakness is exacerbated by declining rates of unionization that reduce the status and influence of trade unions in regulatory and policy debates. This influence deficit is likely to exacerbate the disadvantage of workers in the course of restructuring and industrial transformation, resulting in legal and policy reforms that intensify the advantages of employers rather than ameliorate the disadvantages and risks of workers. Thus, some of the very forces which produce greater vulnerability at work inhibit the regulatory and policy responses that might address it.

In addition, it is now clear that workers are not a unified ‘class'; rather, they have diverse interests and needs in the workplace and with respect to labour market regulation and social policy, interests and needs that do not always coincide and that sometimes conflict. This too may complicate responses to labour market vulnerability. While workers have many issues and interests in common, workers may not always speak in a single voice. Moreover, the demands of the most vulnerable workers are those that are mostly likely to be missing from the debate, in part because union and other forms of representation are absent or weak.  Representation structures that adequately reflect the spectrum of worker demands differences are currently undeveloped; some forms are expressly precluded under the Wagner Act regimes by the requirements that trade unions have exclusive rights to representation.  For all of these reasons, it is important to be attentive to the fact that: 1) workers' interests are likely to be systematically under-represented, and 2) existing forms of worker representation are unlikely to adequately reflect the claims and interests of many of the most vulnerable groups of workers.

To the extent that they are involved in transnational production, workers may also have an interest in the outcomes of labour disputes elsewhere (Hepple, 2002).  However, there are now limits on transnational solidarity efforts among workers, due to legal constraints on the use of ‘secondary action' in industrial disputes in North American collective bargaining law (Atleson, 2002). In a context of globalized production, such restraints effectively tilt the field in favour of employers still more. Thus, addressing the representation gap is likely to require efforts to facilitate cross-border representation and collective action by workers or, at minimum, removal of the current regulatory barriers to such representation and action.

iii. Toward process, participation and decentralization

Beyond the basic issues of access to employment standards and workplace representation lie a number of enduring regulatory questions. One is whether, and where, process and participation rights can substitute for the erosion of substantive entitlements, especially where vulnerable workers are concerned; another is who bargains together. The case for reducing or eliminating substantive workers rights rests on the presumption that bargaining over issues at a decentralized level will produce workplace standards that are more responsive to both employer flexibility concerns and the real concerns of workers in the workplace. However, whatever its merits from the standpoint of flexibility, the replacement of substance with process rights immediately raises issues around disparities in bargaining power between workers and employers (Hepple, 2002). Decentralization generally weakens labour standards. While this is a concern for all workers in the current context, it is a particular problem for the most vulnerable workers. Those who are easily replaced in the labour market cannot always expect to see measurable gains even in collective negotiations with their employers; their best hope may still lie with legislated entitlements (Beatty, 1984) or with joining forces with others beyond the immediate workplace. Hence, it matters whether work standards are the result of legal entitlements or merely the product of bargaining, and it matters at what level the bargaining is conducted. And as the quite different scenarios in Canada and the United States disclose, the outcomes from bargaining also depend on the parties' legal entitlements in the course of representation drives and collective bargaining (Weiler, 1984; Weiler, 1990) and the extent to which they are enforced (Human Rights Watch, 2000). If employment standards are loosened or representation and collective bargaining entitlements weakened, the most vulnerable workers can expect to bear greater risks and see lower levels of compensation.

Any move to decentralize the generation of workplace norms and standards will increase the variation in such norms in any event. This is important not only because of the question of bargaining power in individual workplaces, but because it will have ramifications well beyond the workplace. One result may be to exacerbate workplace and labour market difficulties for some groups of workers.  For example, the destandardization of working time may intensify the conflict between work and non-work obligations, introducing new childcare costs or effectively foreclosing some work opportunities for workers who face such constraints.

There also may be important consequences from a change in the orientation of labour market flexibility. Any regulatory strategy based on individual rights at the expense of collective rights raises the following fundamental questions with respect to workplace vulnerability. Is it possible to effectively empower individual workers in the new economy without empowering workers, or while actively disempowering them, collectively? Moreover, is it clearly desirable, even from the standpoint of efficiency? As the literature on ‘learning by monitoring' suggests (Sabel and Piore, 1984; Bruton and Fairris, 1999), skill may be a collective as well as an individual asset. Thus, focusing only on the capital of the individual worker may neglect critical dimensions of the  processes by which skill is accumulated and successfully deployed in the new world of work.

1. See for example Employment Standards Act, 2000, S.O. 2000, c. 41, s. 50.

2. Employment Insurance Act, S.C. 1996, c. 23.

3. See for example the changes in the Ontario Employment Standards Act, 2000, S.O. 2000, c. 41, raising the number of hours employees are permitted to work per week and allowing employers to ‘average' overtime hours with the effect that employees' entitlement to overtime compensation is reduced.

4. Labour Relations and Employment Statute Law Amendment Act, 1995, S.O. 1995, c. 1, s. 80.

5. See for example the Labour Relations Act, 1995, S.O. 1995, c.1, moving from a card-check to a vote-based certification system.

6. The number of hours of work required to access employment insurance has increased in recent years. As a result, the number of workers who are actually able to access benefits while they are unemployed has decreased; significant numbers of workers, particularly those engaged in part-time work, while formally entitled are substantially excluded from the regime.

7. Labour Relations Act, 1995, S.O. 1995, c.1, Part IV – Construction Industry.

8. Economic Development and Workplace Democracy Act, 1998, S.O. 1998, c.8,

ss.1-23; An Act to amend the Labour Relations Act, 1995, 2000, S.O. 2000, c.38, ss.1-38.

9. See for example, R. v. Advance Cutting and Coring Ltd., [2001] 3 S.C.R. 209.

10. Reference Re Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313; Professional institute of the public service of Canada v. Northwest Territories (Commissioner), [1990] 2 S.C.R. 367.

11. See for example North American Free Trade Agreement, c. 11, online: <http://www.nafta-sec-alena.org/english/index.htm>.

12. See for example, Mexico v. Metalclad Corp. (2001), B.C. J. n^o 950, May 2, 2001.

13. B.C. v. B.C.G.S.E.U., [1999] 3 S.C.R. 3 (“Meiorin”).

14. See the recently enacted Employment Act 2002, (U.K.) 2002, c. 22, in the United Kingdom which entitles workers to some degree of flexibility in working hours.  Online: <http://www.hmso.gov.uk/acts/acts2002/20020022.htm>.