Fading Corporatism: Israel's Labor Law and Industrial Relations in Transition

9. The Rule and Role of Law in Industrial Relations

9 The Rule and Role of Law in Industrial Relations 241 What makes labor law corporatist law or pluralist law? In chapter 8, the different objectives of the two types were outlined, and the corresponding legal institutions were demonstrated. However, are these enabling conditions of an industrial relations system (corporatist or pluralist) or the outcomes of the system ? Is law necessary to create and construct industrial relations or merely its output? The literature that compares corporatism and pluralism, as well as related bodies of literature that distinguish between centrally managed economies and liberal market economies (Soskice 1999), repeatedly emphasizes that institutions matter. Among these institutions, legal institutions play an important role. The rule of law may inhibit economic transformation, as various institutional designs are constitutionally entrenched, morally and politically protected , or simply difficult to legislate (or litigate) away. Law is therefore an important institutional factor that determines the range of options open for interaction between and within the social and economic systems. Law is also an institution that is being constantly changed and designed to accommodate transformation. Big or small, desired changes eventually require adjustments in the law. It therefore stands at both ends of transformation: it governs the process and is the outcome of the process. There is, however, too little discussion of law in itself in the industrial relations literature. At times it is considered merely a reflection of political processes or of the bargaining between the parties to collective bargaining. According to this view, law may be nothing more than a mirror of the electoral processes that shape the political economy, or of the bargaining parties’ relative bargaining power. At other times, law is treated as an exogenous factor that defines the contours of the bargaining partners’ strategies: a “background condition.” It is particularly useful for explaining behavior, and in a simplistic analysis it can be assumed that social processes mirror the law. Whichever view the writer adheres to, law tends to be a black box that is not sufficiently open to analysis, despite the trivial assumption that it is there, and that legal variations are probably important. Despite the intrinsic limitations of a case study in providing a broad picture of trends and influences, it nevertheless has an advantage when one needs to answer questions of causality. A case study can obviate the need to determine whether legal arrangements are a dependent or independent variable to be fitted into a regression analysis. They can be both a cause and an outcome. This was clearly observed throughout this book. In some stages, laws originated from prior deliberations by the trade unions and employers’ associations . Other times, legislation was used to empower one side against the others or even to increase the state’s control over labor and employers. Similarly , the Labor Court was shown to be an institution that evolved from the bargaining parties, and its structure was intended to reflect that of the industrial relation system. It sought to devise active methods to entrench the corporatist system. However, at later stages, the Labor Court became more independent and autonomous and was expected to resolve the disputes that could no longer find their resolution outside the courtroom. The Israeli experience suggests the ongoing process of dual causality, in which law and society intermesh. To make the relationship between law and industrial relations more explicit , this chapter ties together several bodies of literature. The first consists of the classical industrial relations literature. A discussion of John Dunlop’s basic model, which constituted much of the modern literature on industrial relations , demonstrates the multiple roles that law plays in the study of industrial relations. In the second part of the chapter, the ambiguity of law’s position in the industrial relations schema is compared with diverse bodies of thought in the “law and society” writings. The discussion demonstrates how the sociolegal analysis supports both the constitutive and the reflective roles of law that appear in Dunlop’s model of the industrial relations system. To refute the notion that either the legal or the industrial relations system serves as a natural point of departure for this complex relationship, particular attention is paid to the literature on reflexive labor law. Like Dunlop’s model, this is fundamentally a systems approach, yet it has the advantage of placing law and industrial relations side by side on an equal footing, without hierarchy. To complete the discussion yet a third element must be added. While the...