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Populism and employment law

02 September 2019

This study of the impact of the recent emergence of ‘populist’ political parties on global employment law is based on a survey of 11 jurisdictions where populism is assessed to be a significant political force. It was produced in collaboration with Ius Laboris member firms in those countries.

Centre-right and centre-left parties have dominated European politics for many decades. The fluctuation of national governments from left to right and back again has led to predicable consequences. Centre-left governments, generally more socially liberal, have tended to increase taxes and promote greater State involvement in the economy and in combatting social and economic disadvantage. Centre-right governments have predictably been more socially conservative, believing in lower taxes and the benefits of free-market economics.

From an employment law perspective, the effects of changes in governments were also normally foreseeable. A move to the right would generally lead to a reduction in individual and collective rights, whereas a shift to the left would reverse that trend.

In recent years, throughout Europe and beyond, we have been witnessing seismic shifts in the established political order. The erstwhile dominance of centre-right and centre left regimes is being supplanted by a fragmentation and realignment of politics, illustrated by the recent elections to the European Parliament. These developments are creating significant uncertainty, but what impact are they having on employment law? Is populism a game changer?

In this, the first of two articles, we examine the rise of so-called ‘populist’ parties in this particular context. The second article will consider the growing influence of Green political parties and its potential ramifications for the world of work and employment regulation.

In order to assess trends across countries with governments considered to be at least ‘somewhat populist’ by the Global Populism Database[i], we canvassed Ius Laboris[ii] law firms in 11 such jurisdictions[iii]. Our survey asked questions about changes arising from the current wave of populism in relation to: trade union rights; employment protection; equality laws and protection for minorities; free movement; and the minimum wage.

What is populism?

The term ‘populist’ was first attributed to the People’s Party in the United States of America as far back as the late nineteenth century. It is rare for politicians to describe themselves as populist and the label is often meant pejoratively, despite being extensively and increasingly used by the media. It is not used with its pejorative connotation in this article. 

Widely differing politics, ideologically and geographically, are now deemed populist. In so far as there is a consistent theme, it is an ‘ideology that considers society to be ultimately separated into two homogenous and antagonistic groups, ‘the pure people’ versus ‘the corrupt elite,’ and which argues that politics should be an expression of the volonté générale (general will) of the people’[iv].

While it is not always easy to categorise political leaders in this respect, the Global Populist Database mentioned above has a scoring system based on analysis of their public speeches. This illustrates that populists can come from the left as much as the right of politics, thereby challenging that traditional dichotomy.

Generally speaking, Latin American populism is a feature of left-wing politics[v] whereas in Europe and Asia[vi] it originates from the right wing. In each case, however, there are with exceptions, such as the right-wing Social Liberal Party in Brazil and the left-wing Podemos (Spain), Five Star Movement (Italy) and Syriza (Greece)[vii].

Populists have been subdivided into ‘cultural populists’ and ‘socio-economic populists’[viii]. While both share hostility to the so-called elite, they focus on different ‘opponents of the people’, reflecting their roots on either side of the traditional left/right divide. Right-wing populists tend to be cultural populists, whereas left-wing populists are usually socio-economic populists.

Cultural populists[ix], often referred to as ‘nativists’, focus on immigrants, criminals, ethnic and religious minorities and cosmopolitan elites as the outsiders, with the ‘native’ members of the nation-state constituting ‘the people’. In contrast, socio-economic populists[x] perceive big business and capital owners to be outsiders propping up an international capitalist system, equating ‘the people’ with hard-working, honest members of the working class.[xi]

Another common feature of populists, in addition to hostility to the elite, is their preparedness to usurp the checks and balances of an independent legislature or judiciary. Both Poland and Hungary, for instance, have been in recent conflict with the EU over government interference with the judiciary. We are also now seeing an example of the executive threatening to override the legislature in the UK, with new Prime Minister Boris Johnson’s recent announcement of his intention to ‘prorogue’ Parliament (suspend its sitting, in this case for an unusually long period of five weeks) in order to facilitate a no-deal Brexit causing concern.

It is equally possible to identify features that are invariably absent from populist politics: populists tend, for example, to be anti-globalisation and anti-pluralism. Indeed, the opposite of populism is arguably liberalism, embracing as it does concepts such as equality, pluralism, free-market economics and individual liberty. The Russian president Vladimir Putin even saw fit recently to suggest that liberalism was ‘obsolete’, while trumpeting the surge in populism[xii].

This broad range and diversity of populist political movements make it challenging to identify any correlation with developing trends in employment law.

The rise in populism

Populist parties have existed throughout the twentieth century, but in modern times it was the global financial crash of 2008 that catapulted this brand of politics into the mainstream. In the aftermath, populist parties came to power in Hungary, Greece[xiii] and Poland[xiv]. 2016 saw further advances of populist politics in key economies, with the election of Donald Trump as US president and the result of the Brexit referendum in the UK.

Some countries have a longer tradition of populist politicians. In Italy, for example, Silvio Berlusconi’s Forza Italia[xv] first came to power in 1994, and governed intermittently in the intervening years until a populist coalition of Matteo Salvini’s right-wing League Party and the anti-establishment Five Star Movement came to power in 2018. In Latin America, Venezuela has been run by populist governments since 1999, with former president Hugo Chavez[xvi] scoring the highest of all leaders in the Global Populist Database.

Most European states have experienced a rise in populism to some extent in recent years. In some countries populists have come to power, while in others populist parties are rapidly gaining support.

In the European Parliament elections last May, populists increased their vote in countries including Germany, Sweden, Finland, Italy and Belgium (with the resurgence of the Flemish Vlaams Belang party). In Italy and the UK, the League Party and the Brexit Party respectively topped the polls with over 30% of the vote. In France, Marine Le Pen’s Rassemblement National came top with over 23% of the vote (albeit a marginally smaller percentage than her Front National achieved five years previously). The picture across Europe was not consistent, however, with populists in countries such as Denmark, the Netherlands and Austria in retreat.

How does populism impact employment law and policy?

We divided the eleven jurisdictions in the Ius Laboris survey into two categories, depending on whether they are best described as having a left-wing government[xvii] or a right-wing government[xviii]. Admittedly these traditional labels do not always fit neatly, and Italy defies such characterisation with its coalition of left and right populist parties[xix].

1. Trade union rights and the relationship between unions and government

Employment laws have become more trade union-friendly in four of the surveyed countries, more employer-friendly in four others, and unchanged in three[xx]. Perhaps unsurprisingly, it is left-wing governments that have enhanced union rights with right-wing administrations moving in the opposite direction.

Brazil provides one example of the erosion of union rights, with the Bolsonaro Government having removed the mandatory requirement for employees to pay union fees. In Hungary, protection from dismissal for trade union representatives or works council members has been reduced.

In Mexico, on the other hand, the Lopez Obrador government’s overhaul of employment law shortly after coming to power included enhanced collective bargaining rights, freedom of association and protection for unions from employer interference.

A similar right-wing/left-wing pattern can be seen in the relationship between trade unions and government, with this becoming friendlier in three countries, more hostile in four, and remaining unchanged in the other four[xxi]. The picture is less clear than with union rights, however, as it is complicated by governments in some countries (both left and right) developing close relationships with friendly unions while becoming more hostile to others. Hungary and Venezuela fall into this category.

Poland stands out as a right-wing populist government having more amicable union/government relations than previously, although this improvement mainly reflects links with Poland’s largest trade union, Solidarność. This close relationship has resulted in enhanced union rights[xxii] and, in return, union support for the government in industrial relations conflicts[xxiii].

2. Employment protection rights

Our survey also presented a mixed picture with regard to the impact of populist leaders on employment protection rights. These have been enhanced in five countries, reduced in four and have remained unchanged in two. In broad terms, left-wing populist governments enhance employment rights and right-wing ones reduce them, but this template does not always neatly apply.

Employment rights have been strengthened in Greece and Mexico. Venezuela, with two decades of populist leaders, introduced significant obstacles for employers wishing to dismiss staff as far back as 2002. The more right-wing administrations in Poland and Russia have also strengthened rights: the protection of Russian employees approaching retirement has recently been augmented, and Poland’s government has introduced increased protection against termination of employment by allowing courts to issue a temporary injunction restraining dismissal for the period of litigation, materially changing the balance of power of the parties. Meanwhile, the compromises between Italy’s coalition partners are evident in significant increases in compensation for unfair dismissal[xxiv].

A contrasting example is Hungary, where employment protection has been watered down in some respects; for example, a reduction in protection against dismissal for employees on sick leave and parents nursing sick or elderly relatives or young children.

While there has been some reduction in federal employment protection in the US[xxv], these rights are largely devolved to state level where the politics can differ greatly. In Brazil, employment rights are broadly unchanged but the new government has made it easier to vary these through collective bargaining agreements.

3. Equality and minority rights

In the area of anti-discrimination law and minority rights, one might expect the most significant impacts to occur under ‘cultural’ populist leaders. In practice, the position is more varied.

It may be surprising that Turkey has enhanced equality laws, with the comprehensive Law on Human Rights and Equality Institution having been introduced in 2016.[xxvi] In India, the Modi government has improved workplace protection for employees with disabilities and also come under pressure to boost rights for certain castes and religious minorities, but no changes in this area have yet been forthcoming. Mexico has also seen a strengthening of anti-discrimination laws and improved parental leave rights.

The hostility to minority rights under many populist regimes appears to manifest itself more in their leaders’ rhetoric than in reduced legal protections. Brazil and Russia are examples of countries that have seen an increase in hostile rhetoric towards minorities, but with no actual changes in the laws safeguarding their employment rights. The Hungarian and Polish governments and the League party in Italy’s coalition are seen as hostile to LGBT+ rights, yet are fettered in their scope to make employment law changes by the supremacy of EU directives in this area[xxvii].

Erosion of protection for LGBT+ communities in some countries is nonetheless evident from major cases outside the employment sphere in which religious or moral beliefs have been ruled to override LGBT+ rights[xxviii].

In the US, the Trump government has proposed scrapping an Obama-era law protecting LGBT+ patients from discrimination, in order to reaffirm the right of healthcare workers to deny care based on religious or moral grounds.

4. Free movement of workers

It might be anticipated that populist governments would result in challenges for employers in hiring workers from outside the country, particularly where cultural populism is concerned.

While free movement rights under European law enable workers in the EU[xxix] to move freely into other member states, those countries remain free to set their own rules on migration from outside the EU. Nonetheless, the arrival of populist leaders has generally made little difference to the applicable free movement rules.

In the US, the Trump government is seeking to tighten rules applying to foreign workers, for example by planning to remove the right to work from foreign spouses of skilled visa holders[xxx]. In contrast, in Turkey and India, it has become easier to hire from overseas.

Poland is a good example of the potential impact of cultural populism on immigration rules. It has become easier to recruit from ‘Slavic’ countries outside the EU[xxxi] but more difficult, in practice, to hire from elsewhere, in particular, from predominantly Muslim countries[xxxii]. The rapidly growing Polish economy has been fuelling demand for migrant labour, but 85% of new work visas granted in 2017 were for Ukrainians. Indeed, in 2017, Poland welcomed more non-EU migrants than any other EU member state[xxxiii].

In Venezuela, where one populist leader (Maduro) has replaced another (Chavez), strict rules on recruiting from outside the country have been introduced.

5. Minimum wage

Worker protection through a meaningful minimum wage has historically been a hallmark of left and centre-left governments, and less for right and centre-right regimes with their traditional antipathy towards burdensome regulation on business.

In most jurisdictions, however, minimum wage rates have continued to rise in line with inflation, with Poland and Mexico having lately seen significant increases recently. Since 2015 when Poland’s Law and Justice Party came to power, the monthly minimum wage has increased from PLN 1,750 to PLN 2,250 in an era of very low inflation. Similarly in Hungary, the minimum wage has increased dramatically since the populist Fidesz Party came to power in 2010, more than doubling in the intervening nine years. In Mexico, the minimum wage increased by 16% in January 2019[xxxiv].

In contrast, the federal minimum wage[xxxv] has been unchanged in the US since July 2009, and so has eroded in value once inflation (averaging around 2% per year) is taken into account over the period. Further legislative changes introduced under the Trump administration have weakened minimum wage protection still further[xxxvi]. In practice, the federal minimum wage has become largely irrelevant as many States, cities and large employers set higher minimum rates[xxxvii].

Conclusion

The experience of populist governments to date, as reflected in the Ius Laboris survey, illustrates that the mere fact of a populist government coming to power is insufficient to predict any likely impact on employment laws.

While the disruptive force of populism is undoubtedly complicating the picture, the evidence to date largely points to a continuation of the same, underlying historical trends. Right-wing cultural populist governments, becoming more significant in Europe, will normally herald reduced rights for unions and a reduction in employment protection. Left wing socio-economic populists, as found in countries such as Mexico and Venezuela, tend to result in enhanced collective and individual workplace rights.

In Europe, in any event, the supremacy of EU law restricts any meaningful reduction in equality laws or the employment rights of minorities by member states.

We have seen that the rhetoric espoused by populist leaders does not necessarily result in concrete reforms, and economics may ultimately be more influential than ideology. This seems to be the case in relation to free movement and minimum wage rights, where changes are influenced mainly by economic factors. Poland is an example of a thriving economy that has relaxed free-movement rules to encourage necessary migration, and also increased minimum-wage rates significantly.

One factor at play might be that some populist parties are focused on specific concerns and lack fully developed positions on economic and societal issues across the board. As such, they may simply be less likely to have worked out coherent employment law policies and priorities. There is no particular evidence for this but it seems a plausible explanation, at least in some cases. One topical example is the UK’s new Brexit Party - basically a ‘pop-up’ party focused on a single issue - which can be contrasted with the UK’s long-standing parties and their policy stances on employment issues honed over decades.

 

With thanks to Ius Laboris colleagues: José Carlos Wahle, Veirano, Brazil; Dimitrios Kremalis, Kremalis Law Firm, Greece; Dr Marianna Csabai, CLV Partners, Hungary; Vijay B Ravi, Kochhar & Co, India; Valeria Morosini, Toffoletto De Luca Tamajo e Soci; Jorge De Presno, Basham Ringe y Correa S,C., Mexico; Slawomir Paruch, Raczkowski Paruch, Poland; Batuhan Sahmay, Bener, Turkey; Salvador Simao, Ford Harrison, USA, Alejandro Disilvestro, D’Empaire, Venezuela


 

[i] The Global Populism Database is compiled by a network of academics around the world (https://populism.byu.edu/); see also https://www.theguardian.com/world/ng-interactive/2019/mar/06/revealed-the-rise-and-rise-of-populist-rhetoric

[ii] Ius Laboris is the market leading alliance of specialist employment law practices with firms in over 60 countries (www.iuslaboris.com)

[iii]

Brazil

Jair Bolsonaro

Social Liberal Party

2019 -

Greece

Alexis Tsipras

Syriza

2015 - 2019

Hungary

Viktor Orbán (Prime Minister)

Fidesz

2010 -

India

Narendra Modi (Prime Minister)

Bharatiya Janata Party

2014 -

Italy

Giuseppe Conte (Prime Minister)

Independent (Government is coalition of a Centre Right coalition led by League Party and Five Star Movement)

2018 -

Mexico

Andrés Manuel Lopez Obrador

National Regeneration Movement (MORENA)

2018 -

Poland

Mateusz Morawiec (Prime Minister)

Law and Justice Party

2018 –

Russia

Vladimir Putin

Independent

2008 – (including period as Prime Minister)

Turkey

Recep Tayyip Erdoğan

Justice and Development Party

2014 -

USA

Donald Trump

Republican Party

2016 -

Venezuela

Nicolás Maduro

United Socialist Party of Venezuela

2013 -

 

[iv] Cas Mudde, 2004

[v] In addition to Maduro in Venezuela and Lopez Obrador in Mexico, Evo Morales in Bolivia is a further example as is Alberto Fernández who, at the time of writing, looks likely to be Argentina’s next leader.

[vi] Apart from Modi in India, Rodrigo Duterte in the Philippines is another example in Asia.

[vii] https://popu-list.org/

[viii] https://institute.global/insight/renewing-centre/populists-power-around-world

[ix] Examples include Poland, Hungary, Israel, India, USA and Russia.

[x] Examples include Venezuela, Bolivia, Mexico and Greece (until very recently).

[xi] https://institute.global/insight/renewing-centre/populists-power-around-world

[xii] https://www.bbc.co.uk/news/world-europe-48795764

[xiii] The Greek populist Syriza party in 2015 (although it was swept from power in July 2019 elections)

[xiv] Fidesz in Hungary (2010) and the Law and Justice Party in Poland (2015)

[xv] Considered by the Global Populism Database as having been ‘somewhat populist’

[xvi] Chavez was President from 1999 to 2013.

[xvii] Greece, Mexico and Venezuela

[xviii] Brazil, Hungary, India, Poland, Russia, Turkey and USA

[xix] Though this conflict has led to a breakdown in this working arrangement in the last few weeks.

[xx]

More union-friendly

Greece, Mexico, Poland, Venezuela

Less union-friendly

Hungary, Russia, USA, Turkey

No change

Brazil, India, Italy

[xxi]

Better relations

Greece, Mexico, Poland

Worse relations

Brazil, Hungary, USA, Venezuela

No change

India, Italy, Russia, Turkey

 

[xxii] For example, the right of self-employed contractors to join trade unions and be union representatives with special protections

[xxiii] For example, the teachers’ strike of 2019

[xxiv] Perhaps reflective of employment law falling within the sphere of influence of Luigi Di Maio, leader of the Five Star Movement and Minister of Economic Development, Labour and Social Policies

[xxv] For example, reducing the budget made available to bodies which protect workers’ rights, such as the Equal Employment Opportunity Commission which faces a reduction of USD 23.7m to its 2019/20 budget

[xxvi] Law no.6701 extends discrimination law so it now covers sex, racial or ethnic origin, religion or belief, sect, disability, age, philosophical and political belief, colour, language, wealth, birth, marital status and health conditions

[xxvii] And in the case of the League Party in Italy by the pro-LGBT+ stance of their coalition partners in the Five Star Movement

[xxviii] For example, a Polish case in June 2019 in which the constitutional court overturned a decision of the Polish Supreme Court, following a referral from the Justice Minister, and ruled that a law sanctioning a printer for refusing to print posters for an LGBT+ foundation was unconstitutional. See also the UK case of Lee v Ashers Baking Company Ltd [2018] UKSC 49, in which the Supreme Court upheld the right of bakers in Northern Ireland to refuse to bake a cake celebrating same sex marriage, and a similar outcome in 2018 in the US Supreme Court case of Masterpiece Cakeshop v Colorado Civil Rights Commission 138 S. Ct. 1719

[xxix] Plus the other EEA member states (Iceland, Liechtenstein and Norway) and Switzerland

[xxx] This proposal is currently being challenged in the courts of Washington DC circuit.

[xxxi] A relatively easy process is available for migrants from countries such as Belarus, Russia. Ukraine, Georgia, Moldova and Armenia.

[xxxii] For example, obtaining a visa from the Polish embassy in a country such as Algeria is difficult as few appointments are available.

[xxxiii] https://ec.europa.eu/eurostat/documents/2995521/9333446/3-25102018-AP-EN.pdf/3fa5fa53-e076-4a5f-8bb5-a8075f639167

[xxxiv] Except for the Northern Border States in which the increase was 100% based on negotiations derived from the North America Free Trade Agreement (USMCA) that aims to close salary gaps between the three member countries (Canada, Mexico and USA).

[xxxv] Many states and cities in the US have higher minimum wage rates.

[xxxvi] For example, increasing the number of employees outside minimum wage protection on account of tips being part of their remuneration

[xxxvii] According to the Wall Street Journal, only 0.28% of workers are employed at federal minimum wage rates with States employing around 60% of the US workforce and large employers such as Walmart, McDonalds and Amazon setting higher minimum rates.

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