As Economies Reopen, It’s the Law of the Jungle for Workers
Governments and companies are returning to business at many different speeds. All worry that something might go wrong.
As communities and businesses around the world decide on the next tentative steps to loosen lockdowns and return to business, exposure to a possible second wave of coronavirus infections is the main worry. Yet there is another form of exposure that is almost as worrisome: What kind of liability will governments and corporations assume for the health of citizens, employees, customers, and tenants as they make these decisions to reopen? Who is legally responsible, for example, if someone gets infected after being told it was safe to go back to work or school?Who is legally responsible if someone gets infected after being told it was safe to go back to work or school?
As communities and businesses around the world decide on the next tentative steps to loosen lockdowns and return to business, exposure to a possible second wave of coronavirus infections is the main worry. Yet there is another form of exposure that is almost as worrisome: What kind of liability will governments and corporations assume for the health of citizens, employees, customers, and tenants as they make these decisions to reopen? Who is legally responsible, for example, if someone gets infected after being told it was safe to go back to work or school?
These questions have as many answers as there are jurisdictions in the world, and in all but a few cases the answer simply does not yet exist. Regulators still have to get their footing, and private-sector firms fear this may be a race that first movers cannot win. Labor unions talk tough on behalf of worker health and safety, but often lack teeth. Legal precedent for how to reopen after a pandemic may not be established for years.
The result is a deep uncertainty that is preventing coherent planning. It’s easy in authoritarian states such as Russia and Iran, where people will simply be ordered back to work with little concern about the liability incurred by the state or individual companies. In countries where citizens can seek redress for wrongs inflicted upon them by government or business, on the other hand, the legal and regulatory limbo that now prevails has paralyzed decision-makers.
Reopening is already creating a multispeed world, with some countries more successful in controlling the disease while others see little choice but to remain in full lockdown. This picture becomes even more complex when factoring in the differences in legal and labor protections afforded to citizens.
In democracies with strong labor rights and a healthy tradition of employer-employee relations (including the European Union, Australia, New Zealand, Canada, and South Africa), there are relatively clear rules for employers and workers, established processes for making decisions and adjudicating them, and predictable risks in terms of fines or penalties should a company fall afoul of the rules. In these countries, expect reopening to be smoother and lead to fewer conflicts. After all, many workers are just as eager to get back to the coal face as their bosses—they just want a say about the conditions that will prevail.
In Germany, where stores and restaurants opened again in May and many companies never closed their offices, workers cannot cite fear of infection as a reason to stay away from work. Some German labor unions have chafed at this, but long-established channels of labor-management relations have helped mitigate most conflicts.
These channels include Berufsgenossenschaften—self-administered industry associations that regulate occupational safety, which quickly developed guidelines for workplaces in various sectors of the economy that were implemented at the start of the pandemic and continually adjusted. At the company level, employee representatives on works councils have a legally mandated say in workplace conditions and other issues in ways not typical of other economies.
France puts its own more labor-friendly spin on the issue. Companies that fail to meet French Labor Ministry regulations to the letter are vulnerable to occupational hazard claims. These could arise even if COVID-19 is not yet on the list of officially recognized occupational diseases provided by the French social security code. Companies operating in France—and their officers individually—can also be held criminally liable for “inexcusable faults,” which a court would likely interpret to include exposing employees to undue risk of infection.
In Britain, employers are legally required to take “sensible steps to discharge their duty of care and to document their assessment and adopted policies,” according to a brief from Reed Smith, a global law firm. “If someone becomes infected at work in the absence of evidence of such steps having been taken, the employer is vulnerable to being found in breach of duty and liable for losses arising.”
In authoritarian countries (including China, Russia, Iran, and Vietnam), workers have little choice in the matter. In China and Iran, for instance, central authorities notoriously concealed the seriousness of their initial coronavirus outbreaks, leaving workers and citizens in the dark about risk. Not surprisingly, workers in such countries have little or no protection against job loss or even arrest should they choose to stay away from working in conditions they consider unsafe.
While the virus appears to be waning in China, the draconian measures taken to halt its spread once it became impossible to deny are now echoed in the draconian measures threatened against those who don’t go along with the new messaging—in effect, that it’s now safe to go back in the water. Even if countries such as China and Russia have rules in place for when workers can isolate themselves which protect those workers from retaliation, enforcing these codes in the face of shifting political winds often proves impossible. If anything, “squeaky wheels” in the labor force become targets of retaliation.
In China, “an employee who is absent from work without a proper cause may be acting in violation of the management policy and, therefore, the terms of the labor contract, which may lead to termination of the employment,” notes a brief from the global law firm K&L Gates.
Then there are the unfettered capitalist societies, where the state cannot or won’t play much of a role—this includes much of the developing world, but also the United States. Here, the reopening of large sectors of the economy may occur with little or no concern for worker safety, with only uncertain judicial redress in a patchwork of jurisdictions available to workers.
In Bangladesh, many of the country’s 2 million garment workers must turn up or be fired. Little enforcement of recent government edicts on social distancing and the use of personal protective equipment in Bangladesh’s sweatshops can be expected.
Meanwhile, the cancellation of enormous orders by the global fashion giants has led to widespread layoffs since early March. The Bangladeshi government has made provisions to force factory owners to pay March wages, but many thousands have gone unpaid for over two months, and beyond street protests, they have little redress. In such an environment, it’s easy to see how workers might not dare to speak up.
In the United States, which once upon a time led the campaign for the 40-hour week and an end to child labor, labor’s voice is of course much diminished today. In the U.S. Senate, the Republican majority is working on legislation backed by corporate lobbyists in Washington that would shield employers from liability when they demand that employees return to work. Democrats, who control the House of Representatives, appear unlikely to agree for now. But with the details of a new $3 trillion relief bill being negotiated and the political pressure to get people back to work building, it is conceivable that at least part of the liability shield gets passed.
In the meantime—and in the absence of strong leadership from Washington—state governors are making policy on the fly, sometimes with nothing more than a Twitter message. For instance, in response to worker complaints that Iowa’s meatpacking plants remained zones with a high risk of infection, the state’s Republican governor, Kim Reynolds, announced that not only do employers have the right to fire workers who won’t return, but that she’ll make sure their decision is registered as a “voluntary quit,” making them ineligible for unemployment benefits.
U.S. federal law potentially provides some redress through the Occupational Safety and Health Administration. But in the absence of strong legal precedent, and with the agency taking its cues from President Donald Trump’s administration’s calls to reopen now, few legal experts expect strong federal enforcement of work safety rules.
While some of this may sound Dickensian, it’s worth noting that even if companies get their liability shield at the federal level, the courts will have the last say. U.S. courts have already seen the first lawsuits on behalf of workers who say they contracted the virus because of inadequate workplace safety measures. “I’ve seen a couple lawsuits filed already by the families of COVID-19 victims who claim the employer knew of the risks in the workplace, but failed to take adequate protective measures,” said Douglas Varga, an attorney in Southport, Connecticut. He said he expects the state to grant employers immunity from coronavirus-related liabilities unless they act “willfully,” “wantonly,” or “recklessly”—something that has often been difficult for plaintiffs to prove in court.
This high standard for liability is already the standard in Connecticut for an employee to sue an employer outside the normal workers’ compensation claim procedure, Varga told Foreign Policy. “That seems fair to me given the circumstances,” he said. “We have to find a way to get back to work eventually.”
Even if there is some solace for U.S. workers with egregious cases, the pandemic has presented them with an additional hurdle: long delays. U.S. state courts by and large stopped taking filings in March as offices closed. New York’s state courts, for instance, only just began accepting digital nonessential filings again on May 25 after a two-month hiatus. Given the backlog that’s likely to confront judges when some semblance of normality returns, justice is unlikely to be swift.
Michael Moran is chief markets officer and chief risk and sustainability officer of Microshare and a lecturer in political risk at the Korbel School of International Studies at the University of Denver. Microshare produces ESG-relevant data for some of its clients.
More from Foreign Policy
At Long Last, the Foreign Service Gets the Netflix Treatment
Keri Russell gets Drexel furniture but no Senate confirmation hearing.
How Macron Is Blocking EU Strategy on Russia and China
As a strategic consensus emerges in Europe, France is in the way.
What the Bush-Obama China Memos Reveal
Newly declassified documents contain important lessons for U.S. China policy.
Russia’s Boom Business Goes Bust
Moscow’s arms exports have fallen to levels not seen since the Soviet Union’s collapse.