Employment Law: A Very Short Introduction

Employment Law (A Very Short Introduction) by David Cabrelli

The volumes in the “Very Short Introduction” series do a good job of providing a survey of the subject. The surveys are often idiosyncratic. They are based on the author's perspective about what the important issues are and what their content consists of. This book surveys employment law from an international perspective. The reader gets a sense of a common zeitgeist setting the agenda for international developments.

I have been practicing employment law for nearly 40 years. When I started practicing law, there was virtually no employment law. There was wage and hour law, but there was not much money in that area. There was Labor Law, but that involved big companies and big unions. Only a few statutes concerning discrimination had been passed but the coverage they provided was shallow and allowed significant exceptions.

Since the late 1980s, employment law has taken off into a major area of practice. In California (and under Federal law), attorneys are incentivized to take employment discrimination cases by the promise of one-way attorney's fees where prevailing employees get paid their attorneys fees but prevailing employers don't. Whistleblower and retaliation cases are also given similar treatment.

Cabrelli's book does a nice job of mapping out the changes over the year. It also invited me to think about employment law from a higher perspective than my usual wont. Typically, I am in the trenches dealing with precise issues of adverse employment actions or causation or the like. Cabrelli's book pitched the level of analysis much higher.

For example, Cabrelli provided an introductory chapter on the history of employment law. The law of economic relationships was originally found in Master and Servant law. Medieval law was divided into (a) Law of Persons, such as husband and wife, parent and child, (b) Law of Obligations, including voluntary obligations, such as contract, and involuntarily assumed obligations, as occurs with negligence, (c) Law of Things, i.e., property rights, and (d) Law of Actions or Remedies, which set out the rules for enforcing rights.

Master and Servant Law started out as part of the Law of Persons, namely as a status based relationship. Then, with the coming of the industrial revolution, the economic transformation led to the emergence of the employment relationship as contractual in nature. I was taught in law school the trope of the move from status to contract. Cabrelli explains:

The Master and Servant regime was supported by statutory and common law rules, which gave the lion's share of the power to the Master: the right to discharge, suspend, or discipline the ‘workman' and imprison him or her for absconding. The Master and Servant laws amounted to a system that repressed workers. In the eyes of the law, there was a presumption that this relationship was an annual hiring and as such, it had a one-year fixed term. However, by the 19th century, evolutions in underlying societal and economic forces generated a gradual change in the ascription of the personal employment relationship from status to contract. This meant that the arrangements entered into between parties to a working relationship came to be thought of as expressions of their free will and liberty, rather than as something thrust on them by operation of the law. The lawyer Henry Summer Maine in his book Ancient Law (1861) claimed that the transition to contract was a socially progressive transformation in the sense that a ‘free man' retains his liberty to contract (as a voluntary act of his will), unlike the servant who is branded with a status which is an ascribed position that he cannot shake off. This change in the perception of the working relationship as one rooted in voluntary agreement coincided with the repeal of the Master and Servant laws by the Employers and Workmen Act 1875 in the UK. The demise of the master and servant model also took place in the late 19th and early 20th centuries in the USA, and other common law jurisdictions such as Canada, Australia, and New Zealand. By the beginning of the 20th century, it had become settled that the relationship between a person performing work and the hirer of his labour was no longer one regulated by the law of persons, but had evolved into a consensual form of exchange located within the law of obligations (contract law). This was the birth of the modern employer–employee relationship rooted in the contract of employment. The importance of this transition from status to contract lies in the symbolic power of contract.

Cabrelli, David. Employment Law: A Very Short Introduction (Very Short Introductions) (pp. 39-40). OUP Oxford. Kindle Edition.

Contract law is generally not concerned with content. Contract law permitted a tremendous amount of diversity in the development of contract terms. Some content-based terms made their way into the 1875 Labor Code.

Cabrelli also explores the nature of the employment relationship. He defines the “standard employment contract” as having the following key features: “(1) it is a full-time contract (2) with a single employer (3) for an indefinite period of time (4) to perform personal services (5) at the employer's premises (6) irrespective of whether the employer has sufficient work to provide the employee or not.” Obviously, with Zoom and Gig jobs, the traditional paradigm is breaking down, which may be a reason why the California Supreme Court recently redefined the employment relationship to include a broader swathe of economic relationships.

Cabrelli identifies the key criteria of employment as follows:

“There are three features that are key to the classification of any contract or relationship for the supply of services as one of employment: the first is the idea of ‘control'; the second is ‘subordination'; and the third is ‘dependence'. If we take the notion of ‘control', this is one of the oldest criteria for the identification of a contract of employment. It stretches back to the Victorian era in Anglo-American common law countries. It is a reference to the ability of the putative employer to (i) decide what work the employee will do, and (ii) give instructions to the employee to carry out certain kinds of work, as well as (iii) the power to monitor and superintend that work. It will also involve the employer in the ‘how', ‘where', and ‘when' of the work that the employee is instructed to do, that is the nature of the skills concerned, including the location at which the work is to be performed and its timing.

Cabrelli, David. Employment Law: A Very Short Introduction (Very Short Introductions) (pp. 57-58). OUP Oxford. Kindle Edition.

In California, the fight is usually over “control.” The California “ABC” Test de-emphasizes control and asks, inter alia, whether the putative employee's work is an intrinsic part of the firm.

Cabrelli uses the term “binary divide” to distinguish between employment and other relationships. Cabrelli writes:

The ‘binary' divide is a reference to the chasm that exists between the individual service providers operating in the ‘world of work' on the one hand, and those engaged in the ‘business world' who take their own commercial risks on the other hand. This is the distinction between the contract of employment entered into by the individual employee and the commercial contract for services entered into by the self-employed individual who is an independent contractor. And we can understand the significance of this dichotomy if we repeat the words: an employment contract equals an employment relationship and rights; no employment contract equals no employment relationship or rights.

Cabrelli, David. Employment Law: A Very Short Introduction (Very Short Introductions) (p. 61). OUP Oxford. Kindle Edition.

I had never really thought about employment law as being about giving rights, or that one has to achieve or qualify for these rights, but this is not a bad way of thinking about the issue. Typically, I am thinking about the reasons why a person is not an employee so that they can't obtain minimum wage or overtime, which is the negative form of this concept. A substantial panoply of advantages come with employment, but there are disadvantages such as losing out on the ability to form trade secrets. There are also burdens associated with employment, such as the fiduciary duty that employees owe to their employers.

Cabrelli also notes that employment is a unitary concept. An employee is a single person; an employer is likewise. (I have a case where employment non-discrimination duties are extended beyond the employer who pays the salary to the employee to the employer who controls the place where the employee works.) Cabrelli anticipates that there will be changes in this area as economic relations change. California law recognizes some joint employment under some circumstances.

Cabrelli also discusses statutory rights – family medical leave and wage and hour. American law provides far less in the way of these benefits than Europe or Japan. An issue is whether these benefits reduce economic efficiency. Cabrelli offers this model in arguing for economic efficiency:

In the preceding discussion about access to family-friendly leave and rights, there was an implicit assumption that these kinds of leave are expensive. Alongside the libertarian concerns about state interference in the employment relationship, the cost of these rights will feature heavily in debates about the introduction of paid leave schemes. There are claims that these rights and forms of leave do pay for themselves by offsetting any labour costs through higher productivity rates. This is the idea that employees who are entitled to take paid parental leave will feel greater loyalty to their employer and be more motivated at work. As such, they will raise their game and generate more output, the aggregate of which will be higher than the staff costs imposed by the paid leave. By the same token, in response to those increased labour costs, the argument is that employers will be shaken up and incentivized to generate new production techniques in order to accelerate output.

Cabrelli, David. Employment Law: A Very Short Introduction (Very Short Introductions) (p. 83). OUP Oxford. Kindle Edition.

Cabrelli's chapter on Dismissals is interesting in its comparative law approach. Cabrelli introduced Otto Kahn-Freund:

In 1933, the home of the prominent German lawyer Otto Kahn-Freund was raided by the SA (Sturmabteilung), the Nazi party's infamous shock troops. Kahn-Freund was a judge in the Berlin Labour Court and in a recent judgment, he had ruled that three technicians employed by a radio station who had attempted to sabotage a national radio broadcast by Hitler had been unfairly dismissed and that they should be paid damages in compensation. The Nazi government had strong-armed the radio station into sacking the employees on the basis that they were Communist party members or supporters, despite the lack of any evidence to that effect. When news of the subsequent ransacking of Kahn-Freund's home reached him when he was on holiday with his family in England, he decided not to return to Germany and instead sought permanent refuge in that country. Kahn-Freund went on to establish himself as the father of labour and employment law in the UK, and arguably in Western Europe. As an émigré labour law scholar, Kahn-Freund became a lecturer and Professor of Labour and Employment Law at the London School of Economics and Oxford University, and was partly responsible for the introduction of British legislation in 1971 protecting employees from unfair dismissals. This involved a legislative regime that prescribed that employers must have one of five just causes, or reasons, for the dismissal of their employees in order for them to avoid liability. The objective of this system was to provide employees with a moderate measure of job security and security of earnings.

Cabrelli, David. Employment Law: A Very Short Introduction (Very Short Introductions) (pp. 108-109). OUP Oxford. Kindle Edition.

California follows an “at will” paradigm where an employer needs no reason to terminate an employee. During the course of my career, this paradigm was under attack by contractual concepts that would allow the concept of “just cause.” In my experience, most long-term employees are told that they have job security, and they come to believe it, often foregoing other opportunities. However, during the 1990s, this movement was turned back by the courts applying doctrines against oral modifications.

One's job life is a declining asset. Because of their age, employees lose the ability to obtain new jobs. Most employees fired after the age of 50 never get a job that pays as much as the job they were fired from.

French and British law provide for dismissal based on just cause. That said, the British solution pays a comparative pittance for what is lost by termination. The preference of these systems is for reinstatement or reintegration of the employee with the employer.

Cabrelli finishes with discussions of business reorganization, collective bargaining, and strikes. These are areas that are virtually unrelated to my day-to-day practice. These sections, though are interesting, from both a historical perspective and a matter of policy.

Cabrelli writes his book from a non-libertarian perspective. He argues that employment is largely defined by monopsony, in which the employers as a limited number of purchasers can dictate market terms. I'm not sure that this model is entirely accurate given the number of employers in the market. Admittedly, the large employers are limited in number but the majority of the economy is far more equally matched. This seems like a simplistic model. Likewise, the idea that statutory benefits are paid for by increased worker loyalty also seems like a stretch as does the ability of English regulators to keep the market at peak performance.

I am disposed to a free market perspective, but I was willing to give the other side a hearing. I am not going to hold Cabrelli's statism against him. This is a very short introduction and cannot be expected to provide support for all of these issues.

This is going to be a book with little interest to most people. However, most of us are employees. Employment more directly affects us than a lot of political decisions. It is definitely a topic worth knowing about.