Business I / Labor Law Basics
Practice question · Multiple choice

Labour law voids a contract clause where a worker freely agreed to fewer holidays for higher pay. Why does the law override a genuine agreement?

Hints
  1. Who needs the deal more: the worker or the firm? What does that do to bargaining?
  2. Ask what would happen to holiday entitlements if every worker could trade them away.
Show the answer

D. Because the employment relationship is structurally unequal

Why

Freedom of contract assumes rough equality of bargaining power, and the employment relationship is defined by its absence, so the law makes minimums non-waivable. If they could be waived, competitive pressure would push every worker to waive them, which is the whole point of a floor.

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