Ethics @ Work: Who’s afraid of mass resignation?

The medical interns' strike should be beyond the jurisdiction of the Labor Court.

October 30, 2011 23:14
Labor court discussion of medical residents

National Labor Court discussion of medical residents resigna. (photo credit: Marc Israel Sellem)

The legal drama between the interns and the Treasury continues; the interns appealed to the High Court to rule their back-to-work order illegal. The Court urged the sides to return to negotiations in order to make any ruling moot, but did clarify that any intern who truly wants to individually resign should be allowed to do so, thus safeguarding the basic human right I emphasized in my last column.

Thus, the issue being discussed now is that of mass resignation as a negotiating tactic. The whole basis for the Labor Court disqualifying the interns’ resignation (twice!) was the claim that it wasn’t a true resignation but rather a bargaining ploy. I am relieved that the High Court has settled the basic issue that an individual resignation must be honored, but I would like to come to the interns’ defense regarding the collective issue as well.

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The Labor Court ruled that the mass resignation was really a “strike in disguise.”

This may be true, but I believe that a strike of this nature should be beyond the jurisdiction of the Labor Court, and that resignations should not be disqualified or nullified.

As I have explained in previous columns, there are different kinds of labor unions and different kinds of strikes. Sometimes a labor union is just a kind of cartel, using its monopoly power, the unique legal right of collective labor action, in order to get a high price for its product – just as any cartel limits supply in order to collect a high price.

Sometimes the converse may hold: it is the employer acting in restraint of free trade, using its monopsony power (sole buyer) in order to force a low wage on the workers – just as any monopsony limits demand in order to pay a low price. Collective action of the workers is a necessary “countervailing power” needed to resist exploitation.

In many cases there is “bilateral monopoly", an employer and a union who are in a long term relationship. In this case, either side could be exploiting its power.

Since it can be difficult to distinguish these cases, and to weigh the public interest in labor disputes, the Labor Court can make an important contribution to regulating labor disputes and trying to maximize genuine bargaining while minimizing exploitation of artificial and harmful market power.

But a collective resignation itself sheds considerable light on this question.

If a union is merely exploiting its special monopoly, resigning is the worst thing they can do. When they resign they are giving up their monopoly. The employer is free to hire whoever they want.

If the union is trying to take advantage of the fact that they have the employer over a barrel, the situation is a bit more ambiguous.

After the workers and the firm have entered into a long-term relationship, the firm may have difficulty replacing the workers with new ones. But the workers are still giving up quite a bit, namely their status as employees, their seniority and so on.

If on the other hand it is the employer who is abusing its power, the workers’ collective power doesn’t stem from their legal rights or their ability to punish. It stems from the fact that they have a valuable ability that the employer actually needs. The formal status of an employee grants little advantage. In this case it would be quite fair that they be able to withhold their labor in order to realize its true value in the marketplace.

So the very fact that employees use resignation as a bargaining tool strongly suggests that they are genuinely negotiating and not exploiting or manipulating.

When a railway employee takes advantage of the fact that he controls the ability to open the door of the train in order to demand higher wages, he is holding the employer, and in this case the passenger, hostage. This kind of work action borders on the criminal and in all likelihood crosses the border. The button belongs to the railroad, not the worker; the worker is leveraging his status, not his ability.

But when a physician takes advantage of the fact that he controls the ability to heal a patient in order to demand higher wages, he is not holding anyone hostage. The physician’s knowledge and ability don’t belong to the employer, or the Treasury; they belong only to the physician. S/he has every right in the world to demand what s/he considers fair recompense before using this skill.

I find it bizarre that one of the claims used against the physicians is that we really need them. In usual bargaining situations, the fact that I really need someone’s special skill would tend to strengthen his bargaining position, not weaken it.

I don’t think it is inherently wrong that the State of Israel has made a de facto monopsony for physician’s services by tightly regulating doctor’s fees. Free markets are wonderful but they don’t necessarily guarantee that essential medical services will be accessible to all Israelis, and government intervention may be justified and even essential. The government also subsidizes medical education and that also is a factor.

It may indeed be legitimate for the state to say, “we make the rules of the game, if you want to play, play by our rules.” But the worker must always retain the right to decide he just doesn’t want to play.

I hope that the interns and the Treasury can reach a mutually beneficial agreement in the coming weeks and that no court ruling will be required. But I have no doubt that should a ruling be needed, the right of the interns to resign should be upheld unconditionally.

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Asher Meir is research director at the Business Ethics Center of Jerusalem, an independent institute in the Jerusalem College of Technology (Machon Lev).

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