The right‐to‐manage default rule

• Date: 01 May 2015
• Author: Helen Lam,Mark Harcourt,Richard Croucher
• DOI: http://doi.org/10.1111/irj.12101
• Published date: 01 May 2015

The right-to-manage default rule

Mark Harcourt, Helen Lam and Richard Croucher

ABSTRACT

We critically examine the right-to-manage as a legal default rule. Identifying its

deficiencies, we then assess the merits of process and content defaults and identify

potentially non-waivable terms and conditions. Finally, we suggest how different

options may be combined within systems.

1 INTRODUCTION

In this article, we critically examine the right-to-manage as a legal default rule. The

employment relationship has been steadily de-collectivised across much of the world

over the last few years. The clearest sign of this has been the decline of union density,

especially rapid in the richer Anglophone countries.1US unions represented more

than 30 per cent of the workforce in 1960 but little more than 10 per cent by 2013. UK

unions have suffered a similar fate, representing about half of all employees in the late

1970s, down to about a quarter in 2013. Similar precipitous declines have occurred in

Australia and New Zealand. Smaller, but still significant, falls in union density have

occurred in Ireland and Canada as well. Even European unions have suffered some

decline in membership levels.

One result of these changes has been a resurgence of the individual employment

agreement between one employee and one employer. The evidence suggests that most

of these are short, simple documents, covering a limited range of terms necessitated by

statute (Brown et al., 2000). Pro forma contracts have become the norm, with terms

and conditions typically offered on a take-it-or-leave-it basis and involving little or no

actual negotiation (Briggs and Cooper, 2006; Gollan, 2004; Van Barneveld and

Waring, 2002; Waring, 1999; Welch and Leighton, 1996; Wooden, 1999). Terms and

conditions which might have been collectively bargained with a union, and formally

written up in a lengthy collective agreement a few decades ago, are now set at

management’s discretion through the exercise of its common law right-to-manage or

managerial prerogative (Brown et al., 2000). As such, the right-to-manage has

assumed increasing importance to the employment relationship. Yet its existence is

rarely discussed and even more rarely contested.

❒Mark Harcourt is Professor of Strategy and HRM at Waikato University and Visiting Professorial

Fellow, University of New South Wales, Helen Lam is Professor of HRM at Athabasca University and

Richard Croucher is Professor of Comparative Employment Relations at Middlesex University. Corre-

spondence should be addressed to Richard Croucher, Business School, Middlesex University, The

Burroughs, Hendon, London NW4 4BT; email: r.croucher@mdx.ac.uk

1All union density figures are from the OECD’s website: http://stats.oecd.org.

Industrial Relations Journal 46:3, 222–235

ISSN 0019-8692

© 2015 The Authors. Industrial Relations Journal Published by John Wiley & Sons Ltd.

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License,

which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial

and no modifications or adaptations are made.