Legal origins of wage labour: the evolution of the contract of employment from industrialisation to the welfare state

Abstract

A ‘labour market’ implies not just greater competition and mobility of resources, but also the specific form of the labour relationship that is described by the idea of ‘wage labour’ and its legal expression, the contract of employment. The ambiguity of the employment relationship, its dual nature in terms of equality and reciprocity on the one hand and control and subordination on the other, has led many to doubt whether it can be regarded as a contract in the normal sense: ‘in its inception it is an act of submission, in its operation it is a condition of subordination, however much the submission and the subordination may be concealed by that indispensable fiction of the legal mind known as the contract of employment’ (Kahn-Freund 1983: 18). The nature of the legal transition that accompanied the emergence of the modern labour market in Britain was complex. While legal controls over wages and trade regulations were indeed removed in the first half of the nineteenth century, other aspects of the system of labour regulation were reinforced. The Master and Servant Acts, which gave expression to the subordinate status of the worker within the employment relationship, far from repudiating the framework of regulation contained in the Elizabethan Statute of Artificers grew out of that body of legislation and were designed to remedy what were seen as some of its central deficiencies. The labour market was founded on the use of legislation as an active instrument of economic policy.