Not Up To The Job

Abstract

This chapter makes a case against the use of smart contracts in the context of employment. It discusses the general operation of smart contracts, followed by a consideration of their potential use in employment. With that information as a lens through which to view the remainder of the chapter, four key suggestions are then made as to why smart contracts are not suited to instances of employment. The first is that smart contracts cannot account for an employer’s exercise of the managerial prerogative, which is inherent to employment. Secondly, smart contracts are unsuited to allowing for employers to exercise various types of discretions that tend to be contained under employment contracts, which, in turn, has the potential to unfairly prejudice employees. Thirdly, a smart employment contract is unable to allow an employer to performance manage, discipline and potentially dismiss employees for misconduct, or even to allow employees to respond to such circumstances—all of which are concepts of a strongly subjective nature. Finally, smart contracts are unable to accommodate for certain changes that are cognizant in instances of employment and inherent in the employee’s interests; they are inflexible and contain functional vulnerabilities that would generate unprecedented and unnecessary structural change in workplaces. Put simply, smart contracts are not up to the job of supplanting the existing means of generating a contractual relationship between an employer and employee.