Constitutionalizing Employment Relations: Sinzheimer, Kahn-Freund, and the Role of

Labour Law
Author(s): Ruth Dukes
Source: Journal of Law and Society , Sep., 2008, Vol. 35, No. 3 (Sep., 2008), pp. 341-363
Published by: Wiley on behalf of Cardiff University

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JOURNAL OF LAW AND SOCIETY
VOLUME 35, NUMBER 3, SEPTEMBER 2008
ISSN: 0263-323X, pp. 341-63

Constitutionalizing Employment Relations: Sinzheimer,

Kahn-Freund, and the Role of Labour Law

Ruth Dukes*

Hugo Sinzheimer and his one-time student Otto Kahn-Freund are

widely regarded as the founding fathers of German and British labour
law respectively. While, at first glance, the two scholars might appear
to have advocated rather different approaches to the regulation of
employment relations, a review of their work reveals that both argued,
in essence, for the 'constitutionalization ' of those relations. Both
argued, in other words, for the removal from the economic sphere of
the otherwise inequitable consequences of the functioning of private
law, so that collectivized labour might participate with capital, on a
parity basis, in the autonomous regulation of the economy.

INTRODUCTION

It is widely recognized that the process of globalization poses a numbe

challenges for labour law. Wherever economic and legal conditions a
perceived to constitute barriers to the maximization of profit, globalizatio
means that capital is free to relocate. As a consequence of the mobilit
capital, pressure grows for nation states to tailor their economies so a
attract and retain capital investment. Meanwhile, arguments against p
tective labour laws, against collective representation and collective reg
tory mechanisms gain strength: where is the sense in attempting to redre
with national law and institutions, the harm caused to workers by the fre
play of market forces, of managerial prerogative and the capitalist drive f
profit, if capital can simply sidestep these efforts and set up elsewhe
Doesn't it make more sense to tailor labour laws to serve the needs of

* School of Law, University of Glasgow, Stair Building, The Square,

Glasgow, G12 8QQ, Scotland
r. dukes@lbss.gla. ac. uk

I am very grateful to Paul Davies and Emilios Christodoulidis for comments on an earlier
draft.

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business so that national companies might compete on a global stage? In the
face of the apparent impotence of national legal systems to restrain the
power of global capital, many commentators have focused their hopes on the
potential of international or transnational human rights charters to perform
this role. In the United Kingdom, and elsewhere, there is talk of the benefits
of 'constitutionalizing' labour rights and social rights: of entrenching certain
rights in national constitutions, or of enacting transnational instruments such
as the European Social Charter wholesale.1 The hope is that if workers are
granted a range of legally enforceable, constitutionally guaranteed claims,
their position in the workplace will be strengthened such that they will be
better placed to demand and obtain fair and equal treatment at work.
Used in application to labour law, the term 'constitutionalization' has an
older and rather different meaning. In Sidney and Beatrice Webb's text on
Industrial Democracy, first published in 1897, the idea of an industrial
constitution was used to refer to the development of trade unionism, and to the
replacement of the individual negotiation of terms and conditions with
universal collective bargaining, described as 'genuine' freedom of contract.
According to the Webbs, the experience of trade unionism and collective
bargaining in the United Kingdom revealed that a proper understanding of
democracy had to extend to economic as well as political relations.2 The
democratization of the latter alone (as effected under the US Constitution or
the French Declaration of the Rights of Man and of the Citizen) left the
majority of the population, the manual-working wage earners, unemancipated.
To them, the uncontrolled power wielded by the owners of the means of
production, able to withhold from the manual worker all chance of subsistence
unless he accepted their terms, meant a far more genuine loss of liberty, and a
far keener sense of personal subjection, than the ... far-off, impalpable rule of
the king.3

In demanding freedom of association and factory legislation, workers

demanded, in effect, a 'constitution' in the industrial realm. The legal
recognition of collective bargaining and the gradual elaboration of a labour
code signified the concession of a 'Magna Carta' to the entire wage-earning
class, and the extension of the values of liberty and equality from the
political into the industrial sphere.
In contribution to the debates surrounding the establishment of a new
social democratic German state at the time of the First World War, the
Webbs' notion of an industrial, or economic,4 constitution was taken up and

1 K.D. Ewing, 'Constitutional Reform and Human Rights: Unfinished Business' (2001)
5 Edinburgh Law Rev. 1; V. Mantouvalou, 'Work and Private Life: Sidabras and
Dziautas v Lithuania' (2005) 30 European Law Rev. 573; K. Monaghan,
'Constitutionalizing Equality' (2008) European Human Rights Law Rev. 20.
2 S. and B. Webb, Industrial Democracy Vol. II (1897) 840-2.
3 id., p. 841.
4 The German word Wirtschaft can be translated as either 'economy or 'industry'.

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developed by the lawyer Hugo Sinzheimer.5 In theorizing and advocating a
particular role for law in the regulation of industrial relations in the new
German Republic, Sinzheimer proposed the creation of an economic
constitution (Wirtschaftsverfassung) as the very key to the achievement of
social democracy. According to Sinzheimer, an imbalance of power between
capital and labour ('property' and labour, as he termed it) was inherent in the
capitalist mode of production. An economic constitution was required to
adjust this imbalance in favour of labour, to put an end to the subordination
of labour to capital, so that labour might participate in managerial decision-
making on a parity basis with capital. What the constitutionalization of
industry meant for Sinzheimer, then, was state intervention to allow for the
creation of worker collectivities - trade unions and works councils - and for
the legal guarantee to these bodies of rights to participate with employers, as
equals, in the autonomous regulation of the economy. The use of the term
'constitution' implied both the substitution of workplace democracy for
workplace despotism (economic democracy for economic despotism), and
the role of the state in facilitating and setting the limits to the exercise of
regulatory power by employers and employers' associations, trade unions
and works councils, through the grant of constitutional and legal rights and
duties.
In the United Kingdom, during the 1940s and 1950s, the notion of
industrial democracy was developed further by Sinzheimer' s one-time
student, Otto Kahn-Freund (1900-1979). Kahn-Freund was a German
national who came to London as a political refugee in 1933. In Germany, he
had been employed as a junior judge in the Berlin labour court, and in the
United Kingdom, he worked as an academic at the LSE and the University of
Oxford, writing extensively on British industrial relations and labour law. In
apparently stark contrast to Sinzheimer' s conception of the role of labour law
in constitutionalizing industry, Kahn-Freund famously regarded legal
intervention in industrial relations as neither necessary nor even desirable.
In his opinion, the relative paucity of legal regulation of trade unions and
collective bargaining characteristic of the British system was to be
commended: because it ensured the independence of trade unions from the
state (since the unions could not rely on state support in the form of labour
laws), this paucity of law constituted a source of strength for trade unions.

5 That Sinzheimer had read the Webbs is highly likely. Though he did not expressly
refer to them in his own work, his conceptualization of collective bargaining, his
discussion of the need to supplement the political constitution with an industrial, or
economic constitution, and his very use of the term 'industrial democracy'
(Wirtschaftsdemokratie) all suggest a knowledge of the Webbs. Sinzheimer could
not read English; however, Industrial Democracy was translated into German in
1898: O. Kahn-Freund, 'Postscript' in Labour Law and Politics in the Weimar
Republic, eds. R. Lewis and J. Clark (1981). Moreover, the term "Wirtshafts-
demokratie" is attributed to the Webbs in a paper written by Fritz Naphtali, a student
of Sinzheimer' s: F. Naphtali, Wirtschafsdemokratie: ihr Wesen, Weg und Ziel (1928).

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 My aim in this paper is to review the work of Sinzheimer and Kahn-
Freund and to highlight its importance in providing a theoretical basis for
government policy and legislation in Germany and the United Kingdom
respectively during much of the twentieth century. My principal argument,
presented in the third part of the paper, is that the analysis and arguments of
Kahn-Freund share rather more with those of Sinzheimer than might initially
be apparent. The primary goal of labour law, according to both scholars, was
to facilitate the autonomous regulation of employment relations and working
life by collectivized labour and employers or employers' associations. This
was to be achieved, according to both, by the removal from the economic
sphere of the otherwise inequitable consequences of the functioning of
private law: by the sanctioning of the collectivization of labour and the
withdrawal of labour power in enforcement of collectively reached agree-
ments. Where Sinzheimer and Kahn-Freund differed significantly was in
their definition of the degree of autonomy to be enjoyed by these economic
actors. In viewing the regulation of the economy as ultimately a public
{Gemeinschafts-) and not a private matter, Sinzheimer recognized the
legitimacy of state intervention to define the framework within which
economic actors could meet and bargain. The role of law, for Sinzheimer,
was not only to facilitate the autonomous regulation of the economy, but also
to set the appropriate limits to the process. For Kahn-Freund, collective
bargaining was a process more decidedly private to the (collective) parties
engaged in it. Parties should be free to decide not only on the content of
negotiated agreements but also on the methods of their negotiation and
enforcement.
In the final part of the paper, I argue briefly for the continued significance
of these arguments for current debates surrounding the future of labour law
in a globalized world. Much of what has been written about labour law over
the past ten years or so emphasizes a move away from labour law's tradi-
tional concerns with protecting workers from abuses of managerial power
and a growing concern, instead, with maximizing the flexibility and thus the
competitiveness of businesses. Together with this development, there seems
to be a growing perception that 'old ways' of regulating employment
relations have become inappropriate. Instead of legislating to guarantee to
workers minimum wages and minimum standards through collective bar-
gaining or the introduction of comprehensive mandatory legal rules, there is
talk instead of the benefits of reflexive law, soft law, and default rules. These
latter types of regulation are heralded as allowing for fair treatment of
workers and for large measures of flexibility of action on the part of
employers. In many of these discussions of labour law as regulation-for-
flexibility, or soft law and reflexive law approaches, any mention of power is
noticeably absent. The value of the idea of constitutionalization in this
context is that it brings power back into the picture, highlighting the role of
the state in allowing for flexibility but at the same time setting limits to that
flexibility - limits which may take the form of minimum or default

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standards, or more usually, of procedural rights. Consideration of the term
constitution as used by Sinzheimer and Kahn-Freund shifts the focus,
moreover, from the individual as (human) rights bearer to the collective as
potentially constitutive of a countervailing force to global capital.

HUGO SINZHEIMER AND THE WIRTSCHAFTSVERFASSUNG

Many of the key features of the German system of worker representat

were first provided for in the constitution and other collective labou
legislation of the Weimar Republic. A study of the relevant period sho
that the detail of Weimar law was influenced very greatly by the work
Hugo Sinzheimer (1875-1945). As a professor of law and sociology, he w
responsible in large measure for the theorization of German labour law, and
as a parliamentary representative for the SPD, he was directly involved
drafting the Weimar constitution and labour statutes. Though the Weim
labour legislation was repealed by the Nazis during the 1930s, his ideas were
of influence again after the Second World War, for the reason that the labo
law of the Federal Republic retained much from Weimar law.6
In reading Sinzheimer' s work, it becomes clear that both his research and
his political activity were sustained by a 'passionate will to social justice
For him, labour law was a tool to be manipulated to right the injustic
inherent in the capitalist mode of production: the subordination of labour t
capital and the subordination of the individual employee to the employ
Throughout his writings, he recalled the worker as human being, and labou
as human activity, inseparable from the labouring person. Following Ma
he insisted upon the human quality of labour {'die Arbeit ist also der Mensc
selbsf)* and on a Kantian recognition of human dignity that acted to reveal
the injury involved in subordinating labour to capital:
Das Vermogen ist die sachliche Grundlage des menschlichen Lebens, es
gehort zur Welt der Dinge, die keinen Zweck in sich haben, der en Bestimmun
darin besteht, dem Menschen ein Mittel zu sein. Die Arbeitskraft ist di
personliche Grundlage des menschlichen Lebens, sie gehort zur Welt de
geistigen Wesen, die eigene Zwecke haben, deren Bestimmung darin nich
aufgehen kann, nur Mittel jur Fremde Zwecke zu sein. 'Im Reich der Zweck
hat alles entweder einen Preis oder eine Wu'rde. ' Der Mensch hat Wiirde.9

6 W. Herschel, 'Der Betriebsrat - damals und heute', and T. Ramm, 'Die Arbei
verfassung der Weimarer Republik', both in In Memoriam Sir Otto Kahn-Freund, e
F. Gamillscheg (1980).
7 Kahn-hreund, op. cit., n. 3, p. 15.
8 'Labour is theretore humanity ltselr (my translation). Ihis phrase appears repeatedly
in Sinzheimer' s writing, for example: H. Sinzheimer, 'Das Wesen des Arbeitsrechts'
(1927) in Arbeitsrecht und Rechtssoziologie: gesammelte Aufsdtze und Reden (1976)
110.
9 'Capital is the material basis of human lite, it belongs to the world ot things , that
have themselves no purpose, but are designed to serve as means to human ends.

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 Where Sinzheimer broke with Marx, and with a number of his fellow
members of the SPD, was in his belief that social justice and democracy
could be achieved within the confines of the parliamentary system. While
others argued that the transition from capitalism to social democracy could
not be achieved other than by revolution,10 Sinzheimer taught that 'full
democracy' would follow from the extension of democracy from the
political sphere to the economic sphere: from the constitutionalization of
industrial relations. For Sinzheimer and others (notably, Fritz Naphtali and
Ernst Fraenkel), the democratization of the economic sphere represented the
last step in the historical process of the democratization of any state.11 In its
early stages, a labour movement fought for deregulation, for laissez faire, for
free competition between businesses, and for free sale by each worker of his
labour. At this point, it was thought that state regulation should be limited to
guarantees of property and contract: economic freedom and political
freedom were understood to be bound up together such that the achievement
of the latter, of political democracy, would bring with it economic freedom.
Experience showed that this was not the case. Despite democratization of the
political sphere, there was still government of the masses by the minority,
who no longer had political privileges, but, now, economic ones. Only with
economic democracy - the elimination of despotism at the workplace
through its constitutionalization, and an end to the control of the markets by
capital, and control of the state by the propertied classes12 - would true
democracy become a reality.13 As the democratization of state power had
brought to citizens political equality - in terms of universal and equal
suffrage and the freedom to organize political associations and parties - and
freedom from subordination at the hands of the state, the democratization of
the economic sphere, through the constitutionalization of the power of
capital, would bring equality in that sphere, and free workers from the
subordination inherent in the employment relation.
For Sinzheimer, law and norm creation were clearly instrumental to the
constitutionalization process; however, 'law' was understood, here, broadly
to include both state law and 'autonomously created' norms, with the latter
representing the primary force in the creation of the economic constitution.
The idea that law could be made 'autonomously' - by which was meant

Labour is the personal basis of human life, it belongs to the world of spiritual beings,
that have their own purposes, and are not designed to serve as means to the ends of
others. "In the kingdom of ends, everything has either a price or a dignity." Human
beings have dignity.' H. Sinzheimer, Grundziige des Arbeitsrechts (1927) 8, my
translation. The quotation is from I. Kant, Grundlegung zur Metaphysik der Sitten
(1785) s. 434.
10 See, for example, R. Luxemburg, 'Social Reform or Revolution?' in Selected
Political Writings of Rosa Luxemburg (1971).
11 Naphtali, op. cit., n. 5, p. 192. See, also, Sinzheimer, op. cit., n. 9, pp. 207-13.
12 Sinzheimer, op. cit. (1976), n. 8, pp. 16-17.
13 Naphtali. op. cit., n. 5, p. 14.

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independently of the state - was central to Sinzheimer's understanding of
industrial society. It rested on the assumption that 'the state' was an entity
quite distinct from 'society'. As the state created law by means of legislation,
society made law through the spontaneous law-creating powers of those
autonomous class organizations that existed within society - employers'
associations, trade unions, works councils, and self-regulatory industrial
councils.14 The 'economic' or 'industrial' constitution was a societal, not a
state, matter, and the principal actors within that constitution were the
autonomous class organizations of society, not the 'heteronomous' state.
Autonomously created (and applied and enforced) norms were of primary
importance within the economic sphere for two reasons. At a descriptive
level, it could be observed that, in the economic sphere, social norms had
predated state norms: in the case of both works councils and trade unions,
statutory law was introduced after negotiation and consultation procedures
and rules had developed autonomously. The role of state law, then, was not
to 'create' the union or works council system, but to 'announce' the social
norms which had already come into being without state influence.15 At a
prescriptive level, it was the case that only autonomously created norms had
sufficient flexibility and 'immediacy' to guarantee their effectiveness. For
this reason, it was desirable that, within the economic sphere, state
legislation should be subsidiary to autonomous legislation. The state should
abstain from establishing rules, in so far as was practicable, but because the
economic constitution remained subordinate to the state, could intervene to
establish rules where the organs of the state judged it necessary. Autonomous
law, though the primary force in the economic constitution, remained
dependent on the state and on state law in so far as social norms could only
rightly be judged 'law' where the state had allowed for autonomous law
creation, and where it proceeded within the boundaries and according to the
forms prescribed by the state.16
This, then, was the task of state law in the regulation of industrial society,
in the establishment of the economic constitution: to allow for, and to set the
limits to, autonomous norm creation. In the era preceding the
constitutionalization of the industrial sphere, when the dominant ideology
was that of 'freedom of contract', the employer's prerogative to manage was
unlimited (or limited only through the economic 'law' of supply and
demand). The source of the employer's absolute right was his property,
which gave him power over things and over people. Because this power was
not limited by any other power, labour was subordinate to property, the
employer/proprietor alone was 'lord and master', and the economy had only
one agent, rooted in property. Through the establishment of an economic

14 O. Kahn-Freund, 'Hugo Sinzheimer' in Lewis and Clarke, op. cit, n. 5, p. 80.

15 H. Sinzheimer, 'Eine Theorie des Sozialen Rechts' (1936) XVI Zeitschrijt jur
offentliches Recht 31-57, especially 36-7 and 54-5.
16 Sinzheimer, op. cit., n. 9, p. 46.

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constitution (Wirtschaftsverfassung), the subordination of labour to property
was brought to an end: labour was 'called into community with Property',
and afforded a position of power, a Grundstellung (starting position), equal
to that of property. A sphere was created within which matters which
previously had fallen within the employer's sole prerogative were decided in
community with labour. Alongside property, there appeared ipso jure a
second agent, with its basis not in property law but in labour law: labour
ceased to be represented only through property and became its own
representative.17
As envisaged by Sinzheimer, the community of labour and property
which existed under the economic constitution was a 'community of
management' and not a syndicate.18 The sphere within which labour acted
from a position equal to that of property, and within which matters fell to be
decided by labour and property together, acting in community, extended to
cover the power to manage (Verwalten), inherent in property, but not the
matters of ownership (Haben) or exploitation (Verwerten), also inherent in
property.19 According to Sinzheimer, the transferral of ownership from
capitalists to workers would not, of itself, solve the problems associated with
private ownership of the means of production: the economy was a public
(Gemeinschafts-) and not a private matter and should operate for the
achievement of public and not private aims.20 The definition of these aims
was a matter for the autonomous organizations of the economic constitution
(employers' associations, trade unions, workers' councils), to be decided
with reference to the needs of the population as a whole.21 It was, therefore,
transferral of the power to manage and not transferral of ownership which
was key to the democratization of the economic sphere. Even in terms of the
power to manage the economy, however, the autonomous organizations of
the economy should not be totally free from state control.22 As a matter of
democracy, it was correct that the economic constitution should be, in the
last instance, dependent upon and circumscribed by the political
constitution.23
In his role as a member of the constitution committee of the National
Assembly, the first elected government of the Weimar Republic,24

17 id., pp. 207-13.

18 * Syndicate' is used in the sense of an enterprise owned by the workers.
19 Sinzheimer, op. cit., n. 9, pp. 213.
20 H. Sinzheimer, 'Das Ratesystem' (1919) in op. cit. (1976), n. 8, p. 334.
21 id., p. 333.
22 Total freedom would contradict the idea of a social economy. Because: the economy
is not the private concern of the individual, the economy is a public concern
(Gemeinschaftssache)!', id. 'Thinking of the economy as a public and not a private
matter does not preclude "freedom" within the economic sphere. But it does not
understand freedom to be an absolute, inviolable right', id., p. 328, my translations.
23 id., p. 351.
24 In place from January 1919 until the adoption of the Weimar Constitution in July
1919.

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Sinzheimer oversaw the inclusion within the Constitution of the Weimar
Republic of proposals for the democratization of the economic sphere. In its
opening lines, Article 165 of the Constitution called workers, 'to participate,
in community with the employers and with equal rights, in the regulation of
wages and conditions of employment as well as in the overall economic
development of the productive forces'.25 To undertake the task of regulation,
it was provided that a system of councils would be formed: industrial
councils (Wirtschaftsrate) and workers' councils (Arbeiterrate). The estab-
lishment of industrial councils, organized according to industry and
geographical district, and responsible for the regulation of production,
would put an end to the unilateral decision-making power of management in
production matters. But, though these councils would have some influence in
the political sphere - a national industrial council would be given rights to
propose legislation and to comment on draft legislation - they would not act
to replace parliament (as under the soviet form of government in place in
Russia at the time):26 these were organs of economic, not political,
democracy. In addition to the industrial councils, workers' councils would be
formed to represent the workers' interests at workplace level, supplemented
by district and national level workers' councils,27 and 'intimately bound up
with the industrial councils'.28 In fact, workers' councils had already been in
existence in Germany for some time,29 thus:
the distinctive idea behind the councils' system does not lie in the
establishment of bodies to represent the interests of the working class, but
in the latter's introduction into the economic constitution: this [was] itself an
expression of the participation of the working class in the exercise of functions
which were previously denied to it.30

Though these proposals were included in the Weimar Constitution,

resistance in the private sector, together with disagreement within the SPD,
meant that the economic constitution as Sinzheimer had envisaged it was

25 My translation.
26 Understood by Sinzheimer to be a * Rdtediktatur • : Sinzheimer, op. cit. (1976), n. 8, p.
321.
27 id. pp. 321-4.
28 Kahn-Freund, op. cit., n. 5, p. 88.
29 The appearance of workplace worker representative committees in Germany can be
traced to the first half of the nineteenth century. Legal provision for the establishment
of works committees was first made in the Gewerbeordnungsnovelle of 1 89 1 , albeit
not on a compulsory basis. During the First World War, the vaterldndisches
Hilfsdienstgesetz (Auxiliary Service Act) of 1916 rendered the introduction of works
committees obligatory in all establishments with production relevant to warfare and
supplies to the population, which employed 50 or more. After the war, the
Tarifvertragsverordnung (Collective Agreement Decree) of 1918 made provision for
the establishment of works councils in workplaces with more than 20 workers. See,
further, R. Dukes, 'The Origins of the German System of Worker Representation'
(2005) 19 Historical Studies in Industrial Relations 31.
30 Sinzheimer, op. cit. (1976), n. 8, p. 298, cited by Kahn-Freund, op. cit., n. 5, p. 88.

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never fully achieved. Statutory provision was made for the establishment of
trade unions and works councils, and these remained a lasting feature of
German industrial relations, but no district-level workers' councils and no
industrial councils were ever formed. Between 1924 and 1929/30, in a period
of relative economic, political, and social stabilization, renewed plans for
economic democracy were formulated by the research institute of the
Allgemeiner deutscher Gewerkschaftsbund (ADGB),31 but were rendered
obsolete by the onset of world depression and rise of Nazism.
The Weimar system of labour law was dismantled during the Nazi era;
however, the laws enacted in the period 1949-1952 closely resembled those
of the Weimar Republic. The influence of Sinzheimer's thought has
continued, then, to be strongly felt. It is still widely accepted in Germany, for
example, that it is the role of labour law to right an injustice inherent in the
capitalist mode of production: the subordination of the worker to the
managerial power of the employer.32 More particularly, the idea of the
constitutionalization of industry as a prerequisite of fairness survives through
the continued existence of statutory frameworks for the establishment and
operation of works councils and trade unions. The area of law aimed at the
regulation of works councils is called Betriebsverfassungsrecht, or works
constitution law. In fact, both the statutory law dealing with workplace
employment relations, and that which regulates union-employer collective
bargaining, can be understood in terms of the aim of constitutionalizing the
workplace and the economic sphere. Though the degree of statutory
regulation of workplace employment relations is greater than that of union-
employer collective bargaining, in each case the law can be seen to facilitate
and to set the limits to the autonomous regulation of industry, or of the
workplace as one element of that, redrawing the traditional power relation
between capital and labour (workforce and employer) through the facilitation
of worker participation in managerial decision making.33
At sectoral level, the relatively small number of provisions directed at
trade union organization and union-employer collective bargaining34 can be

31 These plans were published in the pamphlet referred to above, written by Fritz
Naphtali as head of the research institute: Naphtali, op. cit., n. 5, p. 192.
51 see, tor example, W. Daubler, Uewerkschajtsrechte im Betneb (2i)i)V, lUth edn.) 31.
The Federal Labour Court has ruled that by reason of the imbalance of power that
exists between an employer and an employee, the employee has a special need of
protection {besonderes Schutzbedurfnis): BAG AP Nr. 54 zu § 61 1 BGB.
33 Compare O. Kahn-Freund, Legal Framework in The System of Industrial Relations
in Great Britain, eds. A. Flanders and HA. Clegg (1954) 49-50: 'the legal
constitution of the [British workshop] is still that of an absolute monarchy to the rule
of which its members have submitted by contract ... In other words, the law still
reflects a state of affairs which has long ceased to the norm of practical life.'
34 The core five sections of the Tarifvertragsgesetz define 'collective agreement' (s. 1)
and the legal effect of provisions contained therein (s. 4), specify who might be party
to such an agreement (s. 2), and who is bound by it (s. 3) and provide for the extension
of an agreement beyond the original negotiating parties (s. 5).

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understood to create a space for the unions and the employers' associations
to negotiate free from state imposed regulation. In accordance with
Sinzheimer's conception of autonomous law making, unions and employers
are regarded as autonomous organizations, which act and bargain
autonomously to create and enforce legal norms. It is on this basis that
collective agreements are understood in Germany to have normative force,
and not for the reason that the agreement constitutes a contract between the
collective parties. While the courts will enforce the normative provisions of a
collective agreement, those parts of the collective agreement which are not
normative, but procedural, can only be enforced through recourse to
industrial action. Moreover, it is the ability to strike effectively which allows
a union to pressure an employer into negotiations in the first place, for there
is no legal obligation on an employer to negotiate with a particular union or
with any, and no statutory recognition mechanism.35 To a large extent, then,
the collective bargaining system rests on the possibility of industrial action,
that is, on state-sanctioned autonomous enforcement of norms and practices.
The role of law here is not to regulate terms and conditions of employment
directly, but rather to facilitate the autonomous regulation of industry
through collective bargaining. It does this by allowing for the formation of
trade unions and employers' associations, for industrial action, and for the
creation of legally-binding collective agreed norms.
At workplace level, where the cooperative as opposed to the conflictual
model means that there is a prohibition on industrial action,36 the role of
statutory law is necessarily greater. Legal sanctions replace social sanctions.
Duties are placed on the employer by way of statutory provisions,
enforceable in the labour courts, to allow the election of works councils,
to finance them, and to inform, consult, and negotiate with them in respect of
certain specified matters. The election and internal procedures of the
councils are regulated in the statute, as is the role of the unions in works
council procedures. Provisions contained in works agreements reached
between the employer and the works council are deemed to have legally
binding normative effect and are enforceable in the courts. Where agreement
cannot be reached, recourse is made not to the courts but to a bipartite
conciliation committee established under statute. As union-employer agree-
ments and practices are enforced either through the courts or through
industrial action, works council-employer agreements and practices are
enforced through the courts or through conciliation. When looking at the

35 Some commentators argue that an obligation to negotiate (Verhandlungspflicht) can

be deduced from Article 9 III of the Constitution, but the majority opinion and the
courts say not: W. Daubler, Kommentar zum Tarifvertragsgesetz (2003) 402 ff.
36 Works councils are required in s. 2(1) ot the Works Constitution Act to work together
with the employer in a spirit of mutual trust for the good of the employees and of the
establishment. Under s. 74(1), the councils and the employer are required to deal with
one another 'with an earnest desire to reach agreement' and, under s. 75(2), are
prohibited from taking industrial action.

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only 'lightly regulated' trade union-employer bargaining practices in com-
parison with the 'densely regulated' works council-employer practices, the
difference lies in the extent of the regulation through statute, rather than in
the type ('auxiliary' or 'regulatory' in Kahn-Freund's terms37) of regulation,
as explained on the basis that in one case the social sanction of industrial
action is allowed and in the other prohibited.

OTTO KAHN-FREUND AND COLLECTIVE LAISSEZ-FAIRE

In embarking upon an analysis of worker representation and labour law

United Kingdom, the principal concept that requires to be understood is
of collective laissez-faire. The term was coined in the 1950s by Kahn-Fre
to refer to the British system of industrial relations and, in particular,
relative paucity of labour law in place in the United Kingdom throughou
first part of the twentieth century.38 As mentioned above, Kahn-Freun
been, in his youth, a student of Sinzheimer's and a judge in the Berlin la
court. That he first encountered United Kingdom labour law as a fo
system, comprehending it on the basis of his pre-existing knowledge of la
law and society in the Weimar Republic, clearly influenced the developm
of his thinking. In his early publications, in particular, we find many of
same principles and assumptions that underpinned Sinzheimer's writing.3
It is with Kahn-Freund's explanation of the role of law in indust
relations that this part of the paper is concerned. Fundamental to
explanation was the postulation by him of two universal truths. The firs
that, in the conclusion and performance of a contract of employment, t
exists an inequality of bargaining power between the employer an
individual worker which is not admitted by the classical liber
understanding of the contract: an agreement freely reached betwee
parties negotiating at arm's length:
The relation between an employer and an isolated employee is typica
relation between a bearer of power and one who is not a bearer of power. I
inception it is an act of submission, in its operation it is a condition
subordination, however much the submission and the subordination ma
concealed by that indispensable figment of the legal mind known as
'contract of employment'.40

37 O. Kahn-Freund in Kahn-Freund's Labour and the Law, eds. P. Davies and M.

Freedland (1983) ch. 2.
38 For a biographical note, see M. Freedland in Jurists uprooted: German-speaking
emigre lawyers in twentieth-century Britain, eds. J. Beatson and R. Zimmermann
(2004).
39 Lord Wedderburn, 'Otto Kahn-Freund and British Labour Law' in Labour Law and
Industrial Relations: Building on Kahn-Freund, eds. Lord Wedderburn, R. Lewis,
and J. Clark (1983), especially pp. 32-8.
40 Kahn-Freund, op. cit, n. 37, p. 18.

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The second universal truth was that there exists a conflict, inherent to any
advanced industrial society, between the aims of management and those of
labour. This conflict involves the matter of the distribution of the profits of
an enterprise: management's priority is to maximize investment, and
labour's is to maximize consumption. Since management and labour retain a
common interest in the regulation of the conflict through 'reasonably
predictable procedures', it is desirable to have measures in place designed to
assist the resolution and minimization of this conflict. To eradicate it,
however, is impossible: 'it is sheer Utopia to postulate a common interest in
the substance of labour relations'.41
Out of these two universal truths arise two requirements: a need for some
means of addressing the inequality of bargaining power between the
employer and the employee, and a need for a method of containing and
regulating the conflict that exists between management and labour. Law has
a role to play in meeting each of these needs. First, it can act as 'a
countervailing force to counteract the inequality of bargaining power which
is inherent and must be inherent in the employment relationship'.42 In
addition, law can be used 'to regulate, to support and to restrain the power of
management and the power of organized labour.'43 By itself, however, legal
intervention in these matters is insufficient; to be effective, legal rules
require social sanctions, by which is meant 'the countervailing power of
trade unions and of organized workers asserted through consultation and
negotiation with the employer and ultimately through withholding labour.'44
While the law undoubtedly fulfils important functions in the sphere of labour
relations, these are secondary to the impact of the spontaneous (non-legal)
creation of a social power on the side of the workers to balance that of
management.45
Under Kahn-Freund's scheme, the regulation of terms and conditions
through collective negotiation is clearly to be regarded as more desirable
than statutory regulation of the same, being more flexible and, in its creation
of an equilibrium between the parties, more effective.46 It is nevertheless
likely that within any system which allows for the conclusion of collective
agreements, the aim of balancing the relation of power between the employer
and the employee, of limiting the managerial discretion to make rules and
decisions, will be met in some instances through the collective negotiation of
contractual terms and workplace rules by management and the trade unions,
and, in others, through the direct legal regulation of such matters. In each
case, there is a role for law. First, law may be used to regulate the collective

41 id., p. 27.
42 id., p. 18.
43 id., p. 15.
44 id., p. 20.
45 And to the vagaries of the labour market: id., p. 19.
46 id., p. 58.

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bargaining process. As such, it might deal with the formation and
organization of unions, trade union recognition, negotiation processes, and
the conclusion and observance of collective agreements: in short, it might
establish 'Queensberry Rules'. Such law is termed 'auxiliary law' by Kahn-
Freund.47 Where law is used to set standards or create rights and obligations
directly, thereby addressing directly the inequality of bargaining power in
the individual employment relationship, it is termed 'regulatory law'.48
Like Sinzheimer, Kahn-Freund based his writing on the assumption that
the industrial (economic) and political spheres could be viewed in strict
separation: that the conflict between 'management' and 'the unions' could be
confined to the industrial sphere. The role of trade unions and the legitimate
scope of collective bargaining were delimited accordingly. The appropriate
subject matter of collective bargaining was defined by Kahn-Freund with
reference to the contract of employment (more accurately labelled as the
rules of the workplace) and to the question of the division of profits between
re-investment and wages. Industrial action was rightful only when taken in
connection with these matters: 'political' and 'national emergency' strikes
stood at 'the borderline of what can legitimately be called "industrial rela-
tions".'49 According to Kahn-Freund, the fact that trade unions and
management existed in a permanent state of opposition meant that collective
worker representation was best limited to representation by trade unions in
collective negotiations with management. Syndicalism and labour
representation on company boards (which he termed, in reference to West
Germany, a 'recrudescence of syndicalism'50) were objectionable for the
reason that they blurred the distinction between the managerial function (to
manage) and the trade union function (to stand as a collective force in
opposition to management). Nor did considerations of industrial democracy
mean that individual workers should have a direct role in the formulation of
the rules which govern their working life. Within an industrial, as within a
parliamentary democracy, an individual worker did not take part directly in
formulating the rules of the workplace - his or her role was rather to be a
member of the union and thereby to choose the representative who would be
active in rule formulation on his or her behalf. The individual worker had no
legal obligation, but a moral duty, to be a union member, just as the citizen
had a moral duty to vote in parliamentary elections. It was for this reason
that the equation of the 'freedom not to associate' with the 'freedom to
associate' was a fallacy.51
Having arisen out of the postulation of universal truths,52 the preceding

47 id., p. 60.
48 id., pp. 37 ff.
49 Kahn-Freund, op. cit., n. 33, p. 124
50 O. Kahn-Freund, Selected Writings (1978) 19.
51 Kahn-Freund, op. cit., n. 37, p. 23.
52 See above, pp. 352-3.

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comments on industrial relations were to be understood to apply generally to
any 'advanced industrial society', capitalist or communist.53 In contrast,
Kahn-Freund's elucidation of the concept of collective laissez-faire was
particular to British industrial relations. The starting point for this
elucidation was the observation that:

there is, perhaps, no major country in the world in which the law has played a
less significant role in the shaping of [labour-management] relations than in
Great Britain and in which today the law and the legal profession have less to
do with labour relations.54

This was explained by Kahn-Freund with reference to the historical

development of industrial relations. Noting Sidney and Beatrice Webb's
observation that an increase in trade union strength within the political
sphere during the nineteenth century had meant an increase in union
demands for regulatory legislation, he posed the question of why, since the
First World War, this had not been the case.55 From an examination of the
path of development of industrial relations during the relevant period, he
concluded that, with time, unions and employers alike had come to prefer
collective bargaining over legislation as a method of settling terms and
conditions of employment, viewing the latter, in fact, as nothing more than
state 'interference' in their rightful freedom of negotiation. In the nineteenth
and early twentieth centuries, when trade unions had campaigned for
statutory intervention in employment relations, including a legal minimum
wage and a legal limitation on maximum working hours, 'expediency rather
than a belief in collective laissez-faire determined the demarcation between
legislative and autonomous regulation'.56 In the period following the First
World War, abstentionism was accepted at an ideological level by first the
trade unions, then the employers, the civil service, and finally the courts.
In addition to having a relatively low incidence of regulatory law, the
industrial relations system in this country was remarkable for the fact that the
auxiliary legislation in place was both limited in volume and 'unintrusive' in
nature, acting for the most part only to remove legal obstacles to the smooth
progression of the autonomous self-governance of industry. In general, it did
not seek to give rights or to impose legal duties on the parties to negotiate
with another or any particular opponent, nor to reach an agreement on any or
on a particular set of issues. Where collective agreements were reached
between a union and an employer, the agreement did not usually constitute a
legally binding contract. The terms of the agreement might routinely be
regarded as having been impliedly incorporated into the relevant contracts of
employment, but where this was the case, the employer and individual

53 For example, Kahn-Freund, op. cit., n. 5, pp. 15, 27.

54 Kahn-Freund, op. cit., n. 33, p. 44.
55 See 'Labour Law' in Kahn-Freund, op. cit., n. 50.
56 R. Lewis, 'Kahn-Freund and Labour Law: an Outline Critique' (1979) 8 Industrial
LawJ. 202, at 218.

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employee remained free, in accordance with the law of contract, to negotiate
terms in derogation from the collective agreement, even to the detriment of
the employee.57 Neither a worker's freedom to join or form a trade union or
his or her right to engage in industrial action were framed in terms of a
positive legal right, but rather as statutory immunities from the liability
which would otherwise exist under contract, tort or criminal law.
From a historical point of view, this paucity of legal regulation of trade
unions and collective bargaining procedures could be explained on the basis
that, in the United Kingdom, unions had grown into strong pressure groups
within industry before the enfranchisement of the working class and the
establishment of the Labour Party and the representation of labour within
parliament. This had allowed a pattern of thought and action to develop,
whereby trade unions did not rely on legal rights or protections, first, as a
matter of course, and eventually as a matter of preference.58 By 1906, then,
when Parliament acted to reverse the House of Lords decision that a trade
union could be liable in tort for loss suffered to the employer as a result of
industrial action,59 it was the unions' suspicion of the law and lawyers which
constrained Parliament to frame the Act in terms of an immunity from tort
liability, rather than to grant to the unions a positive right to strike.60 It did
this in spite of the protests of lawyers and employers'.61
With his explanation of collective laissez-faire, of 'the retreat of law from
industrial relations and of industrial relations from the law',62 Kahn-Freund
moved from an empirical observation of the role of law in British industrial
relations to the articulation of a particular collectivist ideology. Collective
laissez-faire meant a minimum of legislative intervention in the individual
employment relation and in the collective labour relation, but, more than
that, it meant the positive rejection, by the collective bargaining partners, of
legal guarantees, and an insistence on the autonomy of industrial forces and
on their freedom to regulate industrial society without 'interference' from the
state. The British labour movement had been heir not only to a socialist
tradition but to the Liberalism of the nineteenth century.63 The lack of legal
intervention in industrial relations in this country resulted in some measure
from the unwillingness of the trade unions to rely on legal sanctions. This
unwillingness was born partly of the idea that, what the state had not given,
the state could not take away,64 and partly of a fear of the distortion of any

57 Kahn-Freund, op. cit., n. 50, p. 17.

58 Kahn-Freund, op. cit., n. 37, pp. 52-3.
59 Taff Vale v. ASRS [1901] A.C. 495.
60 The Trade Disputes Act 1906.
61 Webb and Webb, op. cit. (1920 edn.), n. 2, p. 606, cited in R. Lewis, 'The Historical
Development of Labour Law' (1976) XIV Brit. J. of Industrial Relations 1, at 4.
62 Kahn-Freund, op. cit., n. 50, p. 9.
63 id., p. 8.
64 id., p. 24.

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agreement at the hands of legal professionals.65 Moreover, this attitude on
the part of the trade unions had proven to be a source of strength: the
renunciation of state protection had ensured the independence of the
collective bargaining partners from the state.66
As an ideology, collective laissez-faire informed the thinking of trade
unionists, employers, judges, and governments of both political parties for
much of the twentieth century. As Roy Lewis has argued, it was partly due to
Kahn-Freund's writings that the priority of collective bargaining over legal
enactment was elevated, during the 1940s and 1950s, 'to an ideological
belief common to both sides of industry'.67 Through his involvement with
the Donovan Commission in 1965-68, Kahn-Freund had a direct influence
on the formulation of public policy and judicial decision-making.68 As the
influence of the principle of collective laissez-faire reached its height during
the late 1960s, however, the 'system' which it had described began to
disintegrate, confronted by the dual pressures of increased governmental
intervention in the running of the economy, and in the regulation of
individual terms and conditions of employment.69 Nevertheless, Kahn-
Freund's formulation of collective laissez-faire continued to be understood
as an explanation of the British tradition of industrial relations from which
later developments depart. It remains today the most obvious starting point
for discussion of British labour law and worker representation;70 an
'analytical edifice' which has housed all scholars of British labour law
since the time it was built.71
As a description of reality, collective laissez-faire never provided a wholly
accurate explanation of British industrial relations and labour law. In fact,
successive governments played a much more active role in shaping industrial
relations than was admitted by the idea of collective laissez-faire. From the
time of the Factory Acts and the Truck Acts of the nineteenth century,
legislation was used to regulate aspects of the individual employment relation
with the aim of protecting workers from abuses of managerial prerogative.
During the first half of the twentieth century, statutes were passed with the
aim of fostering joint regulatory machinery in particular industries and more
generally. More significantly, perhaps, governments offered a great deal of
non-legislative support to the establishment and maintenance of collective

65 Kahn-Freund, op. cit., n. 37, p. 78.

66 Kahn-Freund, op. cit., n. 50, p. 24.
67 Lewis, op. cit., n. 61, p. 9.
68 The Royal Commission on Trade Unions and Employers' Associations 1965-1968. In
1969, the High Court, making explicit reference to Kahn-Freund and to the findings
of the Donovan Commission, ruled that collective agreements did not have legal force
unless the parties to the agreement explicitly provided that it did: Ford Motor Co Ltd
v. AUEFW [1969] 2 All E.R. 481
69 P. Davies and M. Freedland, Labour Legislation and Public Policy (1993).
70 See, for examle, S. Deakin and G. Morris, Labour Law (2005, 4th edn.) para 1.1.
71 Wedderburn, op. cit., n. 39, p. 39.

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negotiation and arbitration mechanisms. What collective laissez-faire, or
voluntarism, meant in practice was that from the end of the First World War
until the 1970s, government interventions in industrial relations, both
legislative and non-legislative, were geared towards encouraging the
establishment and maintenance of autonomous regulatory and dispute
mechanisms. Autonomous or 'voluntary' procedures were valued above
statutory procedures by governments, unions, and employers, and though
trade unions and employers were not, as a general rule, placed under a legal
obligation to bargain collectively with one another, legal and non-legal means
were used to encourage them to do so. What was significant about labour
relations in Britain, then, was not so much the absence of state intervention in
industrial relations, but the nature and form of that intervention.72
This is not to suggest that Kahn-Freund himself erred in his understanding
of the role of labour law in British industrial relations: as Lord Wedderburn
put it, he was 'too good a lawyer' for that.73 My point is, rather, that to quote
certain passages from his writings in isolation, and to understand these as
descriptive of reality, can be misleading. As a matter of historical fact, it is
wrong to conceive of the British tradition of collective laissez-faire or
voluntarism in terms of an absence of law or government from the industrial
relations sphere. It is wrong, too, to suggest that the term 'voluntarism'
implied truly voluntary choices on the part of employers regarding the
benefits of collective autonomous regulation, and the matter of whether to
become involved in autonomous procedures. It is wrong, finally, to suggest
that collective laissez-faire implied an indifference to the outcomes of these
procedures: for Kahn-Freund, and for governments of the early and middle
decades of the twentieth century, voluntary procedures were prized as the
best means of containing conflict between management and labour, and of
securing for workers improved terms and conditions of employment.

THE THEORIES COMPARED

Read together, Sinzheimer's advocacy of an economic constitution

Kahn-Freund's explanation of legal abstentionism in terms of colle
laissez-faire are remarkable for their similarities. Each theory was based
pluralist understanding of society. As such, each expressly rejecte
notion of a unitary aim common to employers and workers, and proceed
instead, on the basis of capital and labour in perpetual conflict.74 Centra

72 K. Ewing, 'The State and Industrial Relations: "Collective Laissez-Faire" Revi

(1998) 5 Historical Studies in Industrial Relations 1, at 11.
73 'In painting the broad pattern, [Kahn-Freund] refused to pass over the detail
did not quite fit': Wedderburn, op. cit, n. 39, p. 42.
74 For further comment on the notions of unity and conflict in industnal relation
Christodoulidis and R. Dukes, 'On the Unity of European Labour Law' in
Coherence of EU Law, eds. S. Prechal and B. van Roermund (2008).

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each theory was an apprehension of the employment relation as one of
subordination, and a belief that it was the role of labour law to counteract
that subordination. Further, there was recognition, within each theory, of the
benefits of the autonomous regulation of industry by the social powers of
industrial society; the employers' associations and the workers' collective
organizations. The primary role of labour law was thought by both
Sinzheimer and Kahn-Freund to lie with the facilitation of this autonomous
regulation.
In Sinzheimer' s writing, the subordination of the individual employee to
the employer was recognized to be symptomatic of the subordination of
labour to property in capitalist society. On this basis, Sinzheimer argued that,
in seeking to mediate the subordination of the individual employee, labour
law should act to redress the wider inequality of labour and property by
constitutionalizing the economic sphere, and, as one element of that, the
workplace. In providing labour with a status equal to that of property, labour
law would act to afford collectivities of workers a decision-making power
equal to that of the employer(s), and so to affirm the right and ability of
workers to participate in managerial decision-making. Having secured this
status and power for labour, state law was to be regarded as having fulfilled
its role. The regulation of industry and of the workplace would proceed
through the autonomous creation of law by the representatives of labour and
property: the trade unions and works councils and the employers'
organizations and individual employers.
Collective laissez-faire, too, rested on the principle that industry was best
regulated autonomously, by the trade unions and the employers; the primary
role of law in industrial relations was to allow for, and to set the limits to,
that autonomous regulation. This was done in United Kingdom law through
the statutory provision of immunities from the common law liability -
criminal, tort, and contractual liability - that would otherwise have attached
to union activities. Because the law acted only to provide these negative
protections, and no positive rights, for example, to form or be a member of a
union, or to take industrial action, Kahn-Freund described the British system
of industrial relations in terms of 'the retreat of law' from that sphere of
human interaction.75 But, of course, in one sense, the statutory immunities
could equally be said to constitutionalize the economic sphere, fulfilling the
same function as that fulfilled by the Weimar Constitution's call to workers
to participate in the regulation of industry. The role of labour law, in each
case, was to exclude from the industrial sphere the otherwise inequitable
consequences of the functioning of private law: to sanction the collectivi-
sation of labour and the withdrawal of labour power in enforcement of
collectively reached agreements, and thereby to allow for the autonomous
regulation of industry by labour and management. Just as in an earlier period

75 Kahn-Freund, op. cit, n. 50, p. 9

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of historical development, law provided space for individuals, legal subjects,
to act autonomously within the market, entering into agreements and
acquiring and disposing of property, free from state interference, it now
created space for collectivities of workers and employers to act autono-
mously in the economic sphere, entering into agreements to regulate indus-
trial relations and employment conditions free from state interference.76 To
describe this function of labour law variously as the retreat of law from
industrial relations, or as the constitutionalization through law of the
industrial sphere, represented, in this sense, only a change of emphasis.
That is not to suggest, however, that the choice of how to realize the aim
of autonomous regulation was without significance. The different emphasis
placed by Sinzheimer and by Kahn-Freund on the use of legislation to
constitutionalize the economy followed from a rather different understanding
of the essential nature of the economy and of the relationship between the
economic and the political sphere. For Sinzheimer, the economy was a
public and not a private matter. Though it was crucial that the organs of the
economic constitution (the trade unions, industrial and workers' councils)
should be autonomous, and should function autonomously, the public nature
of the economy meant that they should function with an eye not only to their
own immediate interests, but also to the interests and needs of the population
as a whole. The economy should be run for the furtherance of public
interests, as defined by the organs of the economic constitution. And, as a
matter of democracy, the actions of the organs of the economic constitution
should be circumscribed by the political constitution. For Sinzheimer, then,
it was quite proper that state legislation, passed by the (political) legislature,
should be used to facilitate and set the limits to the autonomous action and
autonomous law-making of the organs of the economic constitution. In the
case of works councils, as we have seen, the degree of legislative inter-
vention in the establishment and operation of works councils was relatively
high. Under the Works Councils Act of 1920, the right to bargain collec-
tively was limited with respect to subject matter and subjected to the priority
of the trade union/employer collective agreements; industrial action was
prohibited and replaced with a system of compulsory arbitration; and the
idea that the parties should act in furtherance of the public interest was given
expression in the notion of the 'Betriebszweck* or 'works purpose', which
the works councils and employers were legally obliged to pursue. At the time
of the adoption of the Weimar Constitution, similar legislation was planned
to regulate the institution and operation of further economic organizations:
the district workers' councils and bi-partite industrial councils.
For Kahn-Freund, the regulation of industrial relations was a matter more
decidedly private to the bargaining parties. The collective agreement was not
a contract in the legal sense, but, like a contract, it was something which

76 F. Bohm, 'Rule of Law in a Market Economy' in Germany 's Social Market Economy:
Origins and Evolution, eds. A. Peacock and H. Willgerodt (1989).

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parties should be legally free to enter into or not. Having decided to
negotiate a collective agreement, the parties should be free to decide upon
the content of that agreement. Moreover, since the collective agreement was
not legally binding, the method of its enforcement should also be primarily a
matter of choice for the parties involved. In the development of British
industrial relations, the 'notion of autonomy [was] fundamental . . .
Employers and employees . . . formulated their own codes of conduct and
devised their own machinery for enforcing them.'77 In insisting on the
private nature of trade union/management relations, on the parties' freedom
to decide not only on the content of negotiated agreements, but also on the
methods of their enforcement, Kahn-Freund argued for a greater measure of
autonomy for collectivized labour from the state than did Sinzheimer.
Though he approved of the use of legislation to induce parties to bargain
with one another and to adhere to the terms of negotiated agreements, he
emphasized that the legal inducements should be indirect only and should be
reserved for cases where voluntary agreement proved impossible. General
reliance on legislation and on legal sanctions was a sign of weakness on the
part of trade unions, and not of strength.79 Nor did he admit the merits of
legal regulation of workplace worker representation and joint consultation.
In his opinion, these were matters best left to the free negotiation of trade
unions and employers: law could do little to persuade parties to cooperate at
workplace level, and could cause harm by making 'rigid what ought to be
flexible'.80

CONCLUSION

In the face of globalization and the challenges which it poses for nat
systems of labour law, 'flexibility' has become the leitmotiv of employme
relations policies in countries throughout Europe and beyond. 'Dismant
long-established regulatory standards is almost universally presented a
unavoidable response to the imperatives of competitiveness.'81 Meanw
there is continued recognition, more or less widely acknowledged, of
potential vulnerability of working people and the need to prevent the abu
of workers by employing organizations. The challenge arises: how to achie
economic efficiency and labour market flexibility in a way that also respo
to demands for fair treatment of workers? In the United Kingdom,

77 Kahn-Freund, op. cit., n. 33, p. 44.

78 id., especially pp. 55, 62.
79 id., p. 44.
80 id., pp. 50-1.
81 R. Hyman, 'Flexible Rigidities: A Model tor Social Europe/ in tmployment
Relations in a Changing Society: Assessing the Post-Fordist Paradigm, eds. L.E.
Alonso and M. Martinez (2006) 215-22.

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solution proposed by the Blair and Brown governments has focused on
keeping regulation iight', on encouraging employers and employees to
reach agreements voluntarily without legal compulsion, and on controlling
rather than encouraging collective labour organization.82 In the European
Union, there has been an emphasis on 'soft law' methods of regulating
employment relations and on the ostensibly win-win strategy of regulating
for flexicurity.83
In my opinion, the notion of constitutionalization is of continued use in
the context of these debates for the reason that it has the potential to help us
make sense of these different types of regulation and of the idea, specifically,
of regulating for flexibility while, at the same time, promoting or
guaranteeing the fair and equal treatment of workers. As Richard Hyman
has pointed out:
any system of social relations involves some element of relative fixity and
others more open to variation. For social and economic actors, the ability to
take certain contextual factors as stable and predictable provides a basis for
innovation elsewhere.

Moreover, the choice of where to create rigidities and where to allow

flexibilities is an inherently political one, a question of interests: 'whose
rights and status are to be protected? Whose rendered flexible?'84 The notion
of constitutionalizing employment relations reminds us of this potential of
national governments to choose what ought to be rigid and what flexible: to
entrench certain rights and standards, to create legal frameworks which
allow for processes of negotiation, to distinguish what is negotiable and what
not, to establishing the contextual conditions - in the sense of fundamental
commitments, principles, procedural guarantees, and so on - which provide
the space for possible negotiation. It is useful, too, because it brings power
back into the picture, highlighting the role of the state in setting limits to the
flexibility of action available to employers in order to prevent abuses of
power. These limits may take the form of universal social rights, of
minimum or default standards, of procedural rights, which might even be
directed, thinking back to Kahn-Freund and Sinzheimer, at providing
flexibility of action for management acting not alone but together with
collectivized labour.
In arguing for the constitutionalization of employment relations,
Sinzheimer and Kahn-Freund argued that the exercise of managerial power
by the employer alone should be restricted through the institution of worker

82 See, further, K.D. Ewing, 'Future Prospects for Labour Law - Lessons from the
United Kingdom' (2008) 18(2) Economic and Labour Relations Rev. (forthcoming);
R. Dukes, 'The Statutory Recognition Procedure 1999: No Bias in Favour of
Recognition?' (2008) 37 Industrial Law J. (forthcoming).
83 D. Ashiagbor, The European Employment Strategy: Labour Market Regulation and
New Governance (2005).
84 Hyman, op. cit., n. 81.

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representative bodies and participatory practices. Of course, it is also
possible to limit an employer's managerial prerogative and to protect its
workers from abuses of power using what the Webbs called 'the method of
legal enactment'.85 Both collective bargaining and direct legal regulation of
individual employment relations submit managerial prerogative to a form of
democratic control. In the current political climate, however, in which a
Labour government declares itself indifferent to the merits of the collective
representation of workers,86 we do well to remind ourselves that, according
to Sinzheimer and Kahn-Freund, the collective bipartite regulation of terms
and conditions and working life was to be prized above direct legal
regulation. It was to be prized, first, for the reason that it guaranteed workers
a more direct role in the democratizing process. Allowing workers to
participate in shaping their daily working lives and in managing the institu-
tions in which they invested their labour power went some way towards
protecting their human dignity at the workplace. The collective regulation of
employment relations was to be prized, secondly, because it allowed for
more flexibility in employment relations than did statutory regulation. In
contrast to more recent calls for flexibility in employment relations,
'flexibility' as used by Sinzheimer and Kahn-Freund referred to the freedom
of collectivized labour and capital to negotiate strategies and outcomes
together. Flexibility was not synonymous with a maximization of managerial
power; freedom was not the freedom of market forces, nor the freedom of
businesses to choose whether or not to recognize trade unions, but the
freedom of workers from the tyranny of capital.

85 Webb, op. cit., n. 2.

86 See, for example, the White Paper, Fairness at Work (1998; Cm. 3908) which
presents the matter of whether of not to recognize trades unions as a choice for each
individual business: 'The Government accepts the importance of voluntary choices,
and believes that mutually-agreed arrangements for representation, whether involving
trade unions or not, are the best ways for employers and employees to move forward'
(para. 4.10). The ICE Regulations of 2005 have been criticized for allowing
employers and elected employee representatives the choice of instituting direct rather
than collective representative mechanisms for information and consultation and for
their failure to guarantee any role to trade unions in ICE procedures: R. Dukes, The
ICE Regulations. Pre-Existing Agreements and Standard Provisions: a Warning to
Employers' (2007) 36 Industrial Law J. 329.

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