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How labour market intermediaries transform institutions of work: Insights from a comparative qualitative study of dispute resolution processes in contingent work

How labour market intermediaries transform institutions of work: Insights from a comparative qualitative study of dispute resolution processes in contingent work

 
Svea Windwehr
Greetje F. Corporaal
Vili Lehdonvirta
University of Oxford
 
This paper addresses the motivations, practices, and implications of labour market intermediaries engaging in the resolution of disputes arising between different parties in their marketplaces. In particular, this paper seeks to examine the informal practices of staffing agencies and online labour platforms in this regard. While the use of online labour platforms and other forms of contingent work is proliferating, dispute resolution remains an understudied aspect of contingent work. This qualitative study seeks to address this important gap by comparing and contrasting the dispute resolution and prevention practices of online labour platforms with those of staffing agencies. As staffing agencies have been dealing with similar challenges as online labour platforms regarding dispute resolution, they are wellsituated to contextualise possible changes in dispute settlement brought about by online labour platforms. The goal of this comparative analysis is to gain a more nuanced understanding of the challenges related to dispute resolution in contingent work arrangements. We argue that the dispute resolution practices of different labour market intermediaries are strongly influenced by their organizational set-ups, which in turn are closely associated with the intermediary’s business model. Situating the study in the context of the increased privatization of labour dispute resolution (Colling, 2004; Kovach 2007), we evaluate the dispute resolution practices of these two labour market intermediaries by developing a framework based on due process criteria (Redish and Marshall, 1986; Edelman, 1990; McGregor, 2015). We thus ask: How do different labour intermediaries engage in dispute resolution and prevention, and how should these practices be evaluated against criteria of due process?
Traditionally, the settlement of employment conflicts could hardly be considered to be a class of dispute resolution on its own with workers and employers relying on courts to settle conflicts (Lipsky, Seeber and Fincher, 2003; Mahony and Klaas, 2007). Due to the high financial and reputational costs associated with adjudicating employment conflicts through courts (Hill, 2002), many firms have adopted alternative dispute resolution processes for handling disputes in the workplace (Bingham et al, 2009; Colvin, 2003). Originally intended to compliment traditional court proceedings, such alternative dispute resolution (ADR) processes can consist of ‘softer’ and ‘harder’ measures. Whereas ‘soft’ measures do not lead to any legal binding outcomes, such as open-door policies or forms of mediation, ‘harder’ aspects may relate to forms of ADR that produce binding decisions, such as arbitration (Mahony and Klaas, 2007).
Intended to alleviate the financial burdens on plaintiffs and remove barriers such as physical distance, ADR has generally been theorized to increase access to justice (Goldberg and Sander, 1985). This narrative has been complicated by scholars highlighting the nonconclusive evidence on the success of ADR in making justice more accessible (Hensler, 2003) and the high costs still associated with some mechanisms of ADR (Adams and Prassl, 2017). While the existing literature allows us to consider the growth of ADR in the context of overall labour market transformations, it generally assumes full-time and direct employment, as opposed to the contingent work arrangements mediated by staffing firms and online labour platforms. This shortcoming leaves us with the question of how different types of intermediaries use elements of ADR in resolving disputes between workers and clients, and the implications of these systems in terms of due process.
Scholars have problematized ADR systems for a variety of reasons, most of which are contained in the problem of one-party control. As Bingham et al (2009) note, dispute resolution systems and the quality of their outcomes depend on the exercise of control regarding the design of the system, the goals the system is meant to achieve, and the rules that govern the system. As it is often employers who enjoy more control over dispute resolution systems, ADR in the workplace has been suggested to often adversely affect employees. In the context of labour market intermediaries, however, this problem of oneparty control has at least in part been solved. Therefore, one could assume that, with the intermediary in charge of the ADR system, the design, objectives and rules of that system should inhibit less biases in favour of either party.
In this paper, we argue that this assumption of neutrality on the side of the intermediary insufficiently captures the nuanced disparities between different types of labour market intermediaries and the dispute resolution practices they have adopted. Namely, while staffing agencies are more similar to conventional hierarchies, online labour platforms identify themselves as two-sided markets (Rochet and Tirole, 2002) which market share depends on offering novel and often technology-based solutions that keep transaction costs (Coase, 1937; Williamson, 1981) to a minimum. While it may very well be that different types of labour market intermediaries have developed ADR systems that are more ‘human’ or more ‘technology’-based, what we don’t know is what social and organizational implications this holds for structuring the dispute settlement process and people’s access to justice.
To shed light on this matter, we have conducted a qualitative study of the dispute resolution and mediation practices of a major online labour platform and compare them with the practices of staffing agencies. We examine various organizational aspects that lead to the adoption of different dispute resolution systems. Our preliminary findings show that whereas staffing agencies tend to rely on highly personalized, unstructured and integrated dispute resolution and prevention practices, the practices of online labour platforms can be characterized as de-integrated, process-oriented and rule-based. In our presentation, we will discuss how these differences in ADR systems design produce different outcomes. We will discuss how, contrary to what one may expect, the relationship-driven dispute resolution and prevention practices of staffing agencies demonstrate less adherence of due process criteria, while the technology-focused system of the online labour platform creates a more predictable and explicit process that allows for greater compliance with due process norms.
We theorize that platform-based dispute resolution systems can be viewed as an extension of a larger trend of privatizing labour dispute resolution. We will discuss the possible implications for collective action in the context of platform-mediated work as well as the implications of our grounded theoretical framework for policy makers interested in employment dispute settlement in the gig economy (see e.g. Felstiner, 2011; Prassl and Risak, 2017).

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