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Shareholder Value and Employee Interests: Intersections Between Corporate Governance, Corporate Law and Labour Law

by: Mitchell, Richard; O'Donnell, Anthony; Ramsay, Ian
Source: Centre for Corporate Law and Securities Regulation and Centre for Employment and Labour Relations Law 

It has been observed that corporate law and labour (or employment) law are in essence separate fields of legal scholarship and regulatory policy. This separation does not mean that there has been no interest by company lawyers in labour law or vice versa; nor does it mean that the two fields do not have relevance to one another. Clearly both corporate law and labour law have provided certain fundamental starting points for analysis which have helped shape the regulatory scope of each other. For example, corporate law, by bestowing legal personality on business entities, allows such entities to enter bilateral employment contracts with workers. At the same time, the corporation's actions in establishing, conducting and terminating such employment relationships will be subject to labour law. What the separation does mean, however, is that generally speaking the concerns and problems associated with corporate governance are regarded as separate from those problems associated with employment regulation.

Events over the past ten to fifteen years have done much to suggest that this 'radical' separation between corporate governance concerns and labour law is no longer sustainable or desirable. Indeed it has been argued that 'the question of who exercises power and control in corporations, and the implications of the growing 'financialisation' of the economy for notions of democratic participation and accountability' constitute 'a set of issues...of direct and central concern to labour lawyers', resulting in the relationship between labour law and corporate governance becoming 'both complex and paradoxical'.