Relaxation of labor markets and employment contracts

Early in the process of industrial development, it became clear that it was necessary for the state to engage in a process of mitigating excesses in demand and supply to avoid potential harm to workers and communities at large. The history of these interventions is often thought to begin with the inception of legislation setting caps on working hours and establishing minimum safety standards in the workplace. Children, youth, and women have been the main beneficiaries of these reforms given their inability to protect themselves from exploitation by the employers. 

As a result, the LMIA application  process has evolved to include more measures that protect foreign workers from exploitation and ensure they are being paid at fair wages. These measures include the requirement of employers to advertise job postings locally and nationally, prove they have made genuine efforts in their recruitment process, offer a wage that is competitive with local standards, and provide detailed information about working conditions. To further ensure employers are not able to take advantage of foreign workers, the government has instituted a series of fines and sanctions for those found in breach of these regulations. 

Originally, master and servant law was the legal background for creating common law regulating employment. The servant was obliged to obey the master completely, and the master had complete legal and moral control over the servant. A servant could be punished with corporal punishment if he did not follow his master’s instructions. Over time, this model has obviously become outdated.

There is a long-standing pattern of countries intervening in the labor market to avoid some excesses in the market system, particularly by setting standards for minimum treatment for workers. The main areas in which minimum protection was legislated were compulsory mediation, maximum working hours, and minimum safety standards. In modern times, potential discrimination is based on race, gender, or other attributes, compensation for work-related injuries, freedom from unfair or unlawful termination, redundancy pay, and old age. The labor market in many countries has also been moderated through the system of awards which is now pervasive as a means of providing a safety net for workers in a large variety of industries. Almost every industry now has some sort of relevant award which can be used to apply standards and to ensure certain basic minimum protections.