The Doctrine of Unconsionability cited by Henry Amoroso, during the 9th International Conference on Catholic Social Thought and Business Education, raised up my curiosity. Unconscionability is when a contract unreasonably favors one party. The principle cannot be mechanically applied because the circumstance needs to be understood. I found out that the Philippine Supreme Court has in fact applied this doctrine on the imposition of unconscionable rate of interest on money. Further research led me to a US court ruling: an employment contract would be unconscionable, when the circumstance of the contract has a level of oppression and surprise within the reasonable expectation of the weaker party; and is unjustifiably one-sided to such an extent that it shocks the conscience.
Unconscionable circumstances
The social pressures and economic motives that surround businesses expose vulnerable employees to unconscionable circumstances. The freedom to contract, which promotes equal bargaining opportunities unfortunately provides no respite to an employee as impartiality is curtailed because stronger parties may impose unfair and oppressive bargains. Do ethical outcomes matter when people have become more focused in their self-serving interests that become deleterious to family and society?
The definition of the “common good” according to the classical utilitarian perspective differs from that of the Catholic Social Thought. The utilitarian view considers the well-being of the greater number over an individual. It is also associated to consequences of an individual’s action. CST’s definition, however, regards the values which promote all together the individual’s material and spiritual welfare.
Pope Leo XIII said people are entitled to work because they need to live and care for their families. Amoroso said that probably the most important contract a person would ever enter is the salary he has negotiated. It is important to promote social conditions that will allow people to thrive and develop. It is therefore not simply a sum total of a specific gain.
Weakening human dignity
Unfortunately, in many situations, these favorable conditions do not exist. Certain situations weaken human dignity at work. For example, employees that enter contracts may be subjected to contracts of adhesion where employees follow the contract and have no power to negotiate or modify the terms.
There are situations where employees are served their contracts after they have already started working and have been working for some time. Time and again, the employee simply signs the contract. In Dr. Divina Edralin’s study, the strategic business decisions to outsource, contract-out, or subcontract are contributors to precarious working arrangement. These innovative redirection of workforce, as presented by Edralin, weakens the collective bargaining agreement of a united labor force.
In conformity with one’s conscience
Philosophical and psychological orientation provides rich knowledge in understanding how the mind thinks which can be linked to business and legal reasoning. According to domestic policy expert William Galston, “the law is capable of establishing templates to distinguish between real and spurious claims, and courts and agencies are capable of applying them.”
I believe that the application of law, however, has limits. If we alone depend on rules, we would be likened to computers who are simply programmed to perform. The application of the doctrine of unconscionability will only be effective if the meaning of being conscionable is sensibly employed. That is, being in conformity with one’s conscience. Galston concluded that the “writ of conscience … though far from absolute, are stronger than what either the contemporary Supreme Court or secular-oriented philosophers are willing to concede.”
Whether it is the business leader or the courts that makes the decision on the fate of the worker, the highest ethical principles should embrace the conscience of every decision maker. It would therefore make the decision maker become fully aware, responsive, and to intentionally act with moral values. The act of which respects human rights and enriches human dignity. Although this clearly agrees with the Catholic social teachings as it realizes CST’s definition of what is the “common good,” putting high regard to every human being is not at all inappropriate.
Ana Liza “Pinky” Asis-Castro teaches corporate social responsibility and corporate governance at the Ramon V. Del Rosario Sr. College of Business of De La Salle University. She can be reached at ana.asis-castro@dlsu.edu.ph.
The views expressed above are the author’s and do not necessarily reflect the official position of De La Salle University, its faculty, and its administrators.