Rethinking Workplace Regulation: Beyond the Standard Contract of Employment

11. Organizational Primacy: Employment Conflict in a Post–Standard Contract World

194 Chapter 11 Organizational Primacy: Employment Conflict in a Post–Standard Contract World alexander j.s. colvin I n the era of the standard employment contract, conflicts between employees and employers often centered on the question of whether the employer was abiding by the terms of the standard contract or the employee was being unfairly denied the normal benefits derived from working under such a contract. With the decline of the standard contract, the nature of conflict in the workplace has changed with new disputes arising in the course of new, nonstandard careers. Now we see coming to the fore issues such as entry and exit to organizations in multi-organizational careers, determination of who is an employee or an independent contractor, and who owns trade secrets or intellectual property developed by an individual during employment or work with an organization . These newly prominent types of disputes reflect the challenges of trying to organize work relationships and careers in an era where the relationship between the individual and the organization is often episodic, fluid, and ill-defined. How will these new work and employment relationships be defined and how will the conflicts that arise from them be resolved? I argue that rather than weaken the influence of organizations relative to market forces (Cappelli 1999), the demise of the standard employment contract built around long-term employment relationships has actually strengthened the hand of employers in determining the terms on which work and employment is conducted. In the area of dispute resolution, this is reflected in the growth of organization-centric dispute resolution procedures that are unilaterally designed, adopted, and often operated by the employer. Yet these organization-centric procedures are being used to resolve disputes that involve individuals whose relationship with the organization is itself contested. My argument is that the changing nature of Employment Conflict in a Post–Standard Contract World 195 employment contracts makes the organizationally focused dispute resolution procedure deeply problematic for resolving new types of employment disputes, and that new procedures for resolving conflicts are needed that are not tied to the organization, but instead reflect the changed nature of employment contracts and relationships. Decentralization and the primacy of the organization One of the striking features of contemporary employment relations is that as the individual’s attachment to the organization in the form of standard long-term employment contracts and career progression through internal labor market structures has weakened, organizations have assumed greater primacy in the determination of terms and conditions of employment. The first of these trends has been well documented by many researchers. Manifestations include the increasing mobility of employees between employers over the course of careers, greater willingness of employers to hire for all positions from the external labor market, and decreasing willingness of employers to offer long-term employment guarantees, including attendant retirement and other benefits (see, for example, Cappelli 1999). Many scholars have argued that these changes have weakened the attachment between the employee and the firm (Farber 1995; Stone 2004). Notably, even in a debate over whether career jobs are dead, Sanford Jacoby, taking the contra position, argued that rather than being unchanged, the employment relationship had been transformed within a context of continued relatively long job tenure for many employees (1999). The second trend is the growing primacy of the organization and its human resource strategies in employment relations. The theoretical groundwork for this development can be found in the field of strategic human resource management (SHRM). The core idea of SHRM researchers is that organizations can gain competitive advantages through the adoption of employment strategies that maximize the effectiveness of the organization’s human resources. A common SHRM argument is that employers should adopt human resource strategies that are best matched to the business strategy of the organization. So, for example, an organization that competes as a low-cost producer should adopt a human resource strategy focusing on the control of labor costs. Meanwhile, an organization that competes based on quality and customization might be more effective if it adopted a human resource strategy focused on investing in a highly skilled workforce that could achieve greater flexibility and quality in production (Arthur 1992, 1994). Research suggests that the emphasis in SHRM theory on organizations developing distinctive human resource strategies has been paral- 196 Rethinking Workplace Regulation leled by a growing variation in patterns of practices and strategies in organizations. In his surveys of a representative sample...