Chapter 10: Unjust Dismissal

Introduction:
Employers are generally regarded as having the right to make decisions about
hiring, promotion, and discharge as well as wages, job assignments, and other
conditions of work. Employers have a corresponding right to accept or refuse work
on the terms offered and to negotiate for more favorable terms.
The moral and legal basis for this particular assignment of rights for employers and
employees is a doctrine known as employment at will.
Employers and employees both have the right to enter into any mutually agreeable
arrangement without outside interference.

Property Rights and Employment at Will:

One argument for employment at will is the property right argument which begins
with the assumption that both employers and employees have property of some
kind.
The owner of a factory is free to utilize the productive resources of the factory and
to pay out money as wages in a way that workers are willing to accept. The workers
are free to accept work under the conditions and at the wages offered or to seek
work elsewhere on more favorable terms.
The property rights argument seems to confer a right on the owners of businesses
to hire and fire at will. All rights are limited, however, for the simple reason that
they inevitably come into conflict with each other and with important social
interests.

Problems with Locke’s Theory:

Property rights are fundamental in Locke’s political theory because of the role they
play in satisfying our basic needs and securing liberty.
Philip J. Levine states that the notion of an absolute right to property, although
originally conceived of as the basis of liberty, has resulted in the subjugation of the
working class. It has allowed employees to exercise domination over their
employers, without any corresponding protection of the employee’s interests. The
essential elements of an employer’s life are all dependent on his ability to derive
income. His job is the basis of his position in society, and, therefore, maybe the
most meaningful form of wealth he possesses.
According to C. B. Macpherson, John Locke repeatedly and explicitly defined men’s
properties as their lives, liberties, and estates… One’s own person, one’s
capabilities, one’s rights and liberties were regarded as individual property. They
were even more important than individual property in material things and revenues,
partly because they were seen as the source and justification of individual material
property.
The second factor is the unequal distribution of property that prevails in modern
society. A certain amount of inequality is justified by Locke insofar as it reflects the
differing efforts of individuals.
Property Rights and Democracy:
Cohen observed that property gives individuals not only power against the state but
also power against each other. The owner of property has not only a right to the
exclusive use of some material thing but also a means for gaining control over
fellow human beings. Property itself thus constitutes a kind of sovereignty in
addition to that of the state.
There is ample reason to limit property rights, and with them the doctrine of
employment at will, by recognizing counterbalancing rights of employees in the
employment relation.

Property Rights in a Job:

It is also argued that employees also have property rights in a job and in the
education and special skills that they put at the service of an employer. If
employees have property rights of this kind, then the right of an employer to
dismiss “at will,” instead of being a right entailed by the employer’s property rights
should be viewed as a violation of the property rights of an employee.
Still, a powerful moral argument can be constructed to support the claim that
employees have interests in a job that morally ought to be protected.

What is Property?
Cohen noted that anyone who frees himself from the crudest materialism readily
recognizes that as a legal term ‘property’ denotes not material things but certain
rights.
Tawney wrote: They may be conditional like the grant of patent rights, or absolute
like the ownership of ground rents, terminable like copyright, or permanent like a
freehold, as comprehensive as sovereignty or as restricted as an easement, as
intimate and personal as the ownership of clothes and books.
The economic assets of most employees do not consist of land, machines, and the
like, which are commonly thought of as productive property. Rather, they consist in
the possession of an education and certain specialized skills, which are often
certified by a diploma or a license of some kind. The most valuable economic asset
of a medical doctor is likely to be the M.D. degree and the license from a state,
which permits the doctor to practice

The Freedom of Contract Argument:

Employment can be viewed as a contractual arrangement between employers and
employees. This arrangement arises in some instances from an explicit contract, a
legal document signed by both parties, in which a business firm states the terms
under which it is willing to hire a person and that person signifies by his or her
acceptance a willingness to work under those terms.
Union employees are typically covered by a companywide contract that is agreed to
by both the management of a company and the union rank and file. In the absence
of an explicit contract, we can still understand the employment relation as involving
an implicit contract insofar as the conditions of employment are understood and
tacitly accepted by both parties.
It would be a violation of rights to force an employee. There are a number of moral
and legal limits on the right of individuals to enter into contractual relations. For
example, children and people who are mentally incompetent cannot be parties to a
contract.
The courts sometimes refuse to recognize contracts that exploit people’s
inexperience or ignorance. Therefore, contracts are valid when they are made with
genuine consent of both parties.

An Autonomy Argument:
Autonomy can be used to support freedom of contract and with it the doctrine of
employment at will. If people are to have autonomy, they must then have not only
the capacity for autonomous action, but also an acceptable range of alternatives
from which to choose. When we choose to do one thing and not another, the
alternatives are largely fixed by a social, political, and economic order over which
we have little control.
How should the employment relation be constructed in a society that values and
wishes to advance the autonomy of its members? Adina Schwartz suggests, “A
crucial implication is that respecting people as autonomous is not equivalent, as
commonly assumed, to leaving them as free as possible from social influences.
Instead, a society respects all its members as autonomous to the extent that it
assists them in leading a certain kind of life.”
A kind of life that embodies a realistic view of autonomy, according to Schwartz, is
one that allows for “ shaping one’s circumstances by planning rationally to achieve
some over-all conception of one’s goals” and “ shaping one’s goals by rationally
criticizing and changing one’s over-all conception”. In short, a society fosters
autonomy to the extent that it makes it possible for people to decide for themselves
how they want to live and enables them to implement their decisions effectively.

Efficiency and Employment at Will:

The third argument for employment at will is a utilitarian one that relies not on
property rights or the freedom of contract but on the importance of this doctrine for
the efficient operation of business. The success of any business enterprise depends
on the efficient use of all resources, including the resource of labor. For this reason,
employers are generally accorded considerable leeway to determine the number of
workers needed, to select the best workers available, to assign them to the jobs for
which they are best suited, and to discipline and dismiss workers who perform
inadequately.