Always read the small print
"Let's play master and servant" - Depeche Mode
In her last post Kate wrote about the fears, and unexpected joys, of joining a “bloke with an idea” to create a new organisation. As the first employee of the organisation Kate’s arrival also saw us in need of things like contracts and policies. Like most start-up organisations we borrowed and repurposed examples we had from our own previous employment. That would do … wouldn’t it?
Well, it would do in so far as it provided a legal contract between Shared Assets and our new employee. But as we started to develop our ideas about wanting to create a “healthy” organisation we soon identified our employment contract as being a bit of an issue. It was long, and detailed, and set out all the things Shared Assets expected of its employees. It was quite bossy. And demanding. And intrusive. And very one sided. It felt all wrong as the very first engagement a new person joining the team would have with the legal person that was Shared Assets. Neither of us was very sure we wanted to spend every day with a legal person like that.
In the end we gutted our employment contract, cutting it down to the bare legal essentials backed up by the statutory policies covering issues such as grievance and incapacity. Everything else is covered in a much more flexible and reciprocal Staff Handbook. This approach served us well for a number of years, although as we move to a non hierarchical structure we are now having to revisit those statutory policies as well, something which we will no doubt come to later in this project.
Reflecting back on that experience has sent me digging out the origins of the employment contract. I was wondering if perhaps - like the original sins of incorporation, legal personhood and limited liability - there is something in its history that can shed light on the problematic nature of most employment contracts today…
And, oh my …
I am indebted in what follows to The Contract Of Employment: A Study In Legal Evolution by S. Deakin (2001).
Guilds
Up to the early 19th century most trades were regulated by ‘guilds’ and had a hierarchy of master craftsman, journeymen and apprentices. Under the terms of the Statute of Artificers of 1563 an employer setting up in a particular trade had to have completed an apprenticeship in that trade. They could not hire artisans from different trades, so a master craftsman could only employ journeymen and apprentices from the same trade as themselves.
As the factory system was developed in which a manager might manage people skilled in a number of different trades this law was gradually challenged and undermined, until Raynard v. Chase in 1756 which decided that a non-apprenticed manager or investor could act as the employer. The growth of ideas about the market economy, as well as the development of new trades and skills not covered by the traditional guilds, eventually saw wage labour do away with the artisanal labour model of the guilds.
Yearly hiring
In agriculture and in trades not regulated by guilds the standard practice in the 18th century was for labourers to be hired for a year at a time, meaning the master/employer had the responsibility to maintain the servant/employee all year round whether or not there was work that needed doing, and to meet their needs for board, lodging and medical assistance. In return a master had unqualified right of ‘control’ over the servant throughout the term of the contract. This was a model of service as a relationship based upon reciprocal obligations. Additionally, being in service for 12 months provided the servant or labourer with rights of ‘settlement’ enabling them to benefit for poor relief in the parish in which they worked. The consent of both parties was deemed necessary to end the contract, except where the master could show ‘immorality’ or a serious breach of contract by the servant. Not even the master’s bankruptcy could dissolve the contract of hiring against the servant’s consent.
This pattern of a full time relationship of service changed with industrialisation, as mill workers and coal miners worked long and regular hours, but outside of those working hours were at their own liberty. This meant that they did not qualify for ‘settlement’ by way of yearly hiring and reflected a shift towards a more hierarchical model of employment, which emphasised both the employer’s powers of discipline within the employment relationship and the economic power to use the market to discharge the worker without regard to customary hiring practices.
Master and servant laws
From 1747 onwards a series of Master and Servant Acts strengthened the disciplinary aspects of employment law.
The 1747 Act gave justices the jurisdiction to examine and rule on disputes not only between masters and servants in husbandry but also between masters and all manner of other employees and tradespeople. They had the power to order payment of wages due, and to punish the servant or labourer by docking their wages, imprisoning them, or discharging them from their contract. The Act of 1766 made it an offence for the servant to quit before the end of the agreed term, and the Act of 1823 established new crimes of absconding from work and refusing to enter into work under a contract of hiring, and provided for imprisonment of workers for up to three months.
These new laws applied to all ‘servants’ and ‘labourers’, but not to higher status ‘employees’ such as managers, agents and clerks. Overall these laws worked to reinforce the open-ended duty of obedience of the worker while further minimising the employer’s duty to provide either work or income.
This distinction between different categories of workers persisted in the UK until the Beverage Report of 1942. The report argued for the abolition of distinctions between different categories of employees, and the National Insurance Act of 1946 introduced a unitary model of employment with the key distinction becoming between those who were employed and those who were self employed.
Although Britain repealed its master and servant legislation in the second half of the nineteenth century it has created a legacy of a hierarchical, disciplinary model of service, and it was this legacy that Kate and I could see in the text of the off-the-peg employment contract we initially adopted.
Once again we can see how the dysfunctions of modern working relationships are rooted in a history that we seldom examine, and we’ll be continuing to explore how these legacies impact on the culture and practises modern workplaces in future posts and podcast interviews.
In the meantime if you have experiences of being expected to sign a wild employment contract, or if you’ve been working to codify a new and more mutual relationship between employer and employee, drop us a voicenote here. We’d love to hear from you!