The Ethics of Employment-at-Will: An Institutional Complementarities Approach

Abstract

Employment-at-will (EAW) is the legal presumption that employers and employees may terminate an employment relationship for any or no reason. Defenders of EAW have argued that it promotes autonomy and efficiency. Critics have argued that it allows for the domination, subordination, and arbitrary treatment of employees. We intervene in this debate by arguing that the case for EAW is contextual in a way that existing business ethics scholarship has not considered. In particular, we argue that the justifiability of EAW for a given jurisdiction depends on existing complementarities among the institutions that constitute the jurisdiction’s political economy. Notably, our view takes seriously the ethical concerns EAW critics have raised by showing how these concerns can be mitigated through public policy measures that do not require eliminating EAW.

Employer Discretion: The Role of Collective Agreements in the Liberalization of Industrial Relations

“…The third dimension of employer discretion refers to ''the degree to which the employment relation approximates the model of employment at will,'' which is the termination of an employment contract whenever either party wishes (Baccaro and Howell 2017: 20). Employment at will is at present not a common practice in most European countries, including the Netherlands, and hiring and firing are mainly regulated by law and not by collective agreements (Bhargava and Young 2021). Nonetheless, several provisions on dismissal (and protection thereof) can be found in collective contracts, such as the probationary and notice period and provisions on mass dismissal.…”

When gig workers become essential: Leveraging customer moral self-awareness beyond COVID-19

“…In contrast, jurisdictions adopting for-cause employment rules legally mandate justification and/or prior notice before either party terminates the relationship. Bhargava and Young (2021) argue that justifiability for such differences in public norms depends upon existing complimentarities among the institutions that constitute the jurisdiction's political economy. Specifically, they maintain that liberal market economies depend more on disruptive innovation, which requires greater labor flexibility, as opposed to coordinated market economies that depend more on incremental innovation, requiring greater investment in developing firm-specific skills.…”

Market Participation, Self-respect, and Risk Tolerance

“…Consider again, for instance, the case of policies that combine income security with high flexibility in hiring and firing decisions such as the Danish model of flexicurity (Kreiner & Svarer, 2022). What is interesting in the flexicurity model is that, by allowing for higher flexibility in the labor market, such policies expose people to higher local risk of losing one's job; at the same time, though, they scale down exposure to general risk by providing income security, also reducing domination and arbitrary treatment of employees (Bhargava & Young, 2022). While the rationale underlying these types of policies is that exposing people to local risks pays dividends in terms of better allocation of resources, which are then used to reduce exposure to general risk by means of granting income security in between jobs, we suggest that exposure to local risks yields benefits also in terms of fostering risk-tolerant attitudes, while preserving one's ability to reaffirm their self-respect.…”