THE INSTITUTIONAL MODEL AS APPLIED TO THE LABOUR MARKET

In chapter five, I discussed the Indian Supreme Court’s judgment in PUDR v Union of India. Recall that in PUDR, the Court found a horizontally enforceable constitutional right to a minimum wage, which it derived from the (horizontal) right against forced labour.

Here, I will recap and develop the argument further. The fundamental prop­osition is as follows: the institution of the labour market is constituted by a difference in power between capital owners and workers. The purpose of consti­tutionally guaranteed, horizontally applicable labour rights is to mitigate this institutional power imbalance.

The first step of the institutional approach is to identify the existence of an institution: in this case, the labour market. The labour market fulfils the indicative criteria that were outlined in chapter five. First, it is comprehen­sive, in the sense that it exercises a pervasive influence over individuals’ daily lives. Participation in the labour market - through the wage-bargain, as Karl Klare puts it - is an essential prerequisite for survival.^[547] For most individuals, participation must be both continuous (spread out over years) and intensive (multiple hours a day). Indeed, because of this very pervasiveness, work through the labour market is often a gateway to ‘other primary goods such as self­respect, and can be a way of developing other capacities through dialogue and social interaction’.^[548] Thus, as Ellen Wood puts it:

Material life and social reproduction in capitalism are universally mediated by the market, so that all individuals must in one way or another enter into market rela­tions in order to gain access to the means of life; and the dictates of the capitalist market - its imperatives of competition, accumulation, profit maximization, and increasing labor productivity-regulate not only all economic transactions but social relations in general.^[549]

The institutional character of the labour market is further buttressed by the absence of effective exit (a point briefly alluded to in the previous section, while discussing republican theories).

capitalists may not directly force or coerce workers to work, but they shape the circumstances faced by workers so that they have no good alternative to working under capitalists, and they fail to offer better terms at the points of hire, a better treatment at work, or support the creation of a better social environment in which workers’ power increases over time. (emphasis added)^[553]

Furthermore, while it is theoretically possible, on occasion, for an individual worker to ‘escape’ their situation by leveraging upward mobility, as GA Cohen demonstrates at some length, this freedom is dependent upon the collective compulsion that ensures that the mass of workers remain tied to their institu­tional location. This fits well with the discussion of exit in the previous chapter: an institution does not make exit impossible, but it is a characteristic feature that individuals cannot ordinarily exit or eschew their institutional locations.^[554]

Indeed, this effective inability to exit, as indicated in the previous section, was invoked by the Canadian Supreme Court in Health Services and Support. Relying, in turn, upon US case law, the Canadian Supreme Court used this reasoning to justify a constitutional right to collective bargaining.

And finally, once in the labour market, as Elizabeth Anderson explains, in general, ‘employers’ authority over workers... is sweeping, arbitrary, and unac­countable... it is a form of private government’ (emphasis added).^[555] Thus, as Collins points out in summarising GA Cohen’s argument:

It is possible to argue that no coherent distinction can be drawn between the funda­mental institutions that must satisfy theories of justice and core institutions of civil society such as the family and contracts of employment that need not meet those standards.

The labour market thus fulfils the characteristic features of an institution: pervasiveness and the absence of a feasible exit option from the institution itself (although individuals may be able to move within the institution, ie swap employers). It equally fulfils the second condition of the institutional approach, which is a difference in power flowing from parties’ institutional location. In the case of the labour market, the difference in power stems from the employers’ ownership of capital (ie the means of production) and the workers’ ownership (only) of labour power qua individuals.^[557] This is masked by the legal mechanism of the contract, ‘which presupposes that both parties are equal before law’.^[558] The relative difference is explained (again) by Gilabert:

Workers have some power as owners of their labour force. They may not be put to work without their formal consent. Capitalists in turn have power as owners and controllers of the means of production... on the other hand, both workers and capi­talists can form associations to increase their relative power. In the case of workers, the generation of associational power is very important given that their structural power as individuals is comparatively weak. (emphasis added)^[559]

It is important to note that this difference in power exists both at the point of entry into the relationship and in the content of the relationship itself. The insti­tutional approach thus provides the basis for collective rights (such as the right to collective bargaining), which aim to mitigate the power imbalance at the point of entry. As this is impossible to ever fully address, however, the institutional approach also provides grounds for individual labour rights (such as the right to a minimum wage, as discussed in the previous chapter). This shall be developed more fully in section VI.

V