LAW 606 Lecture Notes - Lecture 1: Social Dumping, Employment Contract
17 Apr 2016
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Document Summary
Er/ee free and equal contracing paries in buying and selling of labour. Employment contract formed by negoiaion btwn individual and enforced by the civil cours. In free and open market, liberty, autonomy and freedom of contracts are best promoted; most people are employed and wages are most eicient. State intervenion is forbidden because it is ineicient and inequitable. But: in reality the market is full of transacion costs, lack if info and is therefore ineicient. Inequality of bargaining power will exist btwn ee and er. Collecive agreement btwn trade union and er that governs terms and condiions of employment. This regime provides a procedural mechanism to enhance fairness and eiciency in workplace. Cb is ariicial, it isn"t related to the actual value of labour; it distorts market to overall detriment of labour. Its bad for consumers because it translates to higher prices for commodiies. It leads to lack of producivity (posner)
