How is our economy constituted, and how does it organise who owns it, votes in it, and has rights in it? The concept of an ‘enterprise’ has steadily developed in both law and theory, and is now established in fields from labour, to tort, competition, corporate, accounting, tax, privacy, and public law. A major goal is to make rights effective. Labour law was a leading driver, from the first use of ‘enterprise’ in the US Fair Labor Standards Act of 1938, and across UK and EU law today. Duties are allocated to the enterprise (whether as an employer, tortfeasor or public service provider) according to economic reality. The enterprise is the underlying economic entity, it eclipses the corporate form, and it includes the interests of all stakeholders. Over time, integrating corporate law with labour, competition, insolvency and public law gave us the vocabulary of enterprise law. The functions of enterprise are to accumulate finance for production, to govern the contributions of people who bring labour, capital or custom, and to distribute rights, like pay, dividends or services, for the public good. These functions of enterprise law – finance, governance, rights – uncover patterns in seemingly disparate swathes of public regulation, such as for education, health, banks, transport, housing, agriculture, the internet and big tech media and marketplaces. Ultimately it weaves a seamless web of social law.
It follows that by understanding the enterprise we can better understand elemental problems that labour law grapples with. These include labour’s subordination and unequal power, the nature of different employers, labour’s voice across specific sectors of industry where unions must bargain, and the causes of unemployment and job insecurity. For example, how should a central bank’s monetary policy on controlling inflation be integrated with fair wages, fair time, and maximum employment? What are the licensing practices of cabs or private hire vehicles with which labour standards may be coupled and enforced? If big tech develops tools that are ever more invasive in personal communications, how can they be changed to protect confidentiality and privacy whether at work or home? Understanding enterprise law expands the perspective both of the labour lawyer, and the public, corporate, or competition lawyer where labour rights interact. It helps us understand our whole economic constitution, and the routes to realise human rights.
This is based on the new book, Ewan McGaughey, Principles of Enterprise Law: the Economic Constitution and Human Rights (Cambridge University Press, 2022
Dr Ewan McGaughey is a Reader at the School of Law, King's College, London, and a Research Associate at the Centre for Business Research, University of Cambridge. He has taught corporate law, insolvency law, contracts, property, labour law, and economic regulation at UCL, the Paris and London School of Economics, and has worked as a visiting researcher at the University of California, Berkeley and the University of Sydney. He has also published A Casebook on Labour Law (2019) and is a volunteer advocate at the Free Representation Unit.