Labour law arose due to the demands for workers for better conditions, the right to organize, and the simultaneous demands of employers to restrict the powers of workers' many organizations and to keep labour costs low. Employers' costs can increase due to workers organizing to win higher wages, or by laws imposing costly requirements, such as health and safety or equal opportunities conditions. Workers' organizations, such as trade unions, can also transcend purely industrial disputes, and gain political power. The state of labour law at any one time is therefore both the product of, and a component of, struggles between different interests in society.
Individual labour law
Contract of employment
The basic feature of labour law in almost every country is that the rights and obligations of the worker and the employer between one another are mediated through the contract of employment between the two. This has been the case since the collapse of feudalism and is the core reality of modern economic relations. Many terms and conditions of the contract are however implied by legislation or common law, in such a way as to restrict the freedom of people to agree to certain things to protect employees, and facilitate a fluid labour market. In the U.S. for example, majority of state laws allow for employment to be "at will", meaning the employer can terminate an employee from a position for any reason, so long as the reason is not an illegal reason, including a termination in violation of public policy.
One example in many countries is the duty to provide written particulars of employment with the essentialia negotii (Latin for essential terms) to an employee. This aims to allow the employee to know concretely what to expect and is expected; in terms of wages, holiday rights, notice in the event of dismissal, job description and so on. An employer may not legally offer a contract in which the employer pays the worker less than a minimum wage. An employee may not for instance agree to a contract which allows an employer to dismiss them unfairly. There are certain categories that people may simply not agree to because they are deemed categorically unfair. However, this depends entirely on the particular legislation of the country in which the work is.
There may be law stating the minimum amount that a worker can be paid per hour. Australia, Belgium, Canada, China, France, Greece, Hungary, India, Ireland, Japan, Korea, Luxembourg, the Netherlands, New Zealand, Paraguay, Portugal, Poland, Romania, Spain, Taiwan, the United Kingdom, the United States and others have laws of this kind. The minimum wage is usually different from the lowest wage determined by the forces of supply and demand in a free market, and therefore acts as a price floor. Each country sets its own minimum wage laws and regulations, and while a majority of industrialized countries has a minimum wage, many developing countries have not.
Minimum wages are regulated and stipulated also in some countries that lack specific laws. In Sweden, for instance, minimum wages are negotiated between the labour market parties (unions and employer organisations) through collective agreements that also cover non-union workers and non-organised employers.
Minimum wage laws were first introduced nationally in the United States in 1938, India in 1948, France in 1950, and in the United Kingdom in 1998. In the European Union, 18 out of 25 member states currently have national minimum wages.
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