Serfdom and employment

A correspondent in the most recent edition of The Economist suggests that corporations are, for workers, the successor to their feudal lord: “The lord provides protection and defence so the workers can produce without fear of raiders taking their life’s bread. In exchange, the lord gets a percentage of the production. Today’s companies provide that same trade-off, giving their workers job security in exchange for the profit from their productivity.”

The spectre of feudalism and its successor, the law of master and servant, does indeed remain strong and especially within the common law. The modern contract of employment is a contract in form only; in reality the courts developed it as a device to protect the proprietary interests of employers and to subordinate employees to that interest. As Deakin and Wilkinson point out in The Law of the Labour Market, the contract of employment is the product of “the assimilation by the common law of a hierarchical, disciplinary model of service.” This obligation of service in true feudal fashion includes not only the workplace but extends to the personal sphere: the spirit of the nineteenth century decision upholding the dismissal of a young woman for visiting, in her own time, her dying mother without permission lives on in decisions that support dismissals for non-work conduct disliked by employers which has little more than an imaginary or fleeting connection with employment.

What the common law has signally failed to do is to recognise that employees also have an equally valid economic and proprietary interest in employment: the economic security of themselves and their dependents, the economic and psychological investment in a job, and increasingly the value of the employee’s educational, reputational and intellectual capital, often developed at considerable personal financial cost. In a speech given to the Institute of Directors in 2006 Andrew Little of the EPMU commented that “Unless employees are to be regarded as subjects – and employers to take on the role of feudal lords – then the law must afford … employees rights against irrational and arbitrary decision-making.” The reason is of course is that employees are entitled to expect that their tangible and intangible investment in employment be protected against such decision-making.

Modern personal grievance law provides some protection but it does so from the common law’s perspective that an employee has no legitimate protectable interest, at most a right, imposed by statute and reluctantly conceded by the common law, to be afforded a degree of natural justice. The courts insist that employees owe a very high duty of fidelity (a term redolent of feudalism) to their employer, they have yet to concede that this should be reciprocated. Power in both feudalism and labour law traditionally flows one way only – to the extent this flow is impeded it is the result of rights hard won, both politically and industrially, by those subject to that power.