Research Proposal: Assessing the Impact of the COVID-19 Pandemic on Labor Contracts and Relations in the Mining Industry

Abstract

This paper proposes research on how the COVID-19 pandemic has influenced the performance of contracts and labor relations in the mining sector. The research focuses on legal frameworks in the United Kingdom and United States, utilizing a doctrinal analysis to achieve the research objectives. The primary research question in this paper is the extent of the vulnerabilities in the interpretation of the force majeure clause that could arise because of the unforeseen events that emerged because of the pandemic. This research finds legal precedents in the US and case law in the UK whose comparative analysis illuminates the need for clear contractual language, especially in the mining sector. The expected results in this research can infer legal grounds for the most likely outcomes regarding cases that might emerge seeking clarification of “impossibility” and “frustration” in the context of the pandemic, in the US and UK legal frameworks. These results will be significant and valuable for industry stakeholders in the mining sector and can define the nature of labor relations and the drafting of future contracts.

Contextual Background

In the judicial arena, case laws in the UK legal system has provided essential perspectives on contracts; for example, Taylor v. Caldwell [1863] establishes a lucid perspective of “impossibility” in common law foundations for contractual agreements. Comparatively, the United States legal landscape is based on a blend of statutory legal precepts, regulatory frameworks, and precedents established by federal and state courts. Considering labor relations in the United States, key federal statutes are critical to this research; for example, the Fair Labor Standards Act of 1938 provided a fundamental basis for compensation elements like the minimum wage (Andrias, 2017). Therefore, most legal frameworks in different jurisdictions have legal precepts that direct the performance of contracts and labor relations in different sectors.

Significance of Research

This research is significance because it is guided by the need to investigate the intricate relationship between the COVID-19 pandemic and its influence on the performance of contracts in the mining industry. Because the mining industry is significant to the broad outline of extractive industries in the world, understanding how the recent pandemic affected this industry, including the adverse impact on labor relations and contractual obligations, is crucial for policymakers, industry stakeholders, and legal practitioners. The research findings can inform legislative and regulatory reforms that can enhance resilience of mining contracts in the face of potential future crises.

Definition of Terms

This research recognizes several key terms to ensure clarity and consistency. The following are the critical terms for definition:

2.1. Research Questions and Research Hypotheses

2.1.1. Research Question(s)

This research proposal recognizes several research questions that will direct the research methodology and the synthesis of existing knowledge on the topic. The broad research question for the proposed research is:

“How has the COVID-19 pandemic impacted contracts within the mining industry, and what are the legal, economic, and practical implications for contractual performance?”

This broad research question covers the core of the research, reflecting the impacts of the COVID-19 pandemic on the mining industry. However, this research proposal also recognizes sentiments by Fourie (2015) arguing that research questions should be specific and measurable in such a way that they would be effectively reflected in the research findings. The following are the specific research questions that will direct the research:

• What vulnerabilities in labor contracts within the mining industry associated with the force majeure clauses emerged during the COVID-19 pandemic, considering the legal framework in the United Kingdom and the United States?
• What adaptations and modifications in contractual obligations became necessary for mining companies during the COVID-19 pandemic and how have these changes been reflected in the overall nature of labor relations?
• How are the legal doctrines of “impossibility” and “frustration” reflected in the broader mining sector during the COVID-19 pandemic?
• What recommendations can be efficient for contracts in the mining industry considering the strategies that were effective in navigating the challenges posed by the pandemic?

These research questions are crafted to guide an extensive literature review, revealing existing knowledge on the topic of contractual performance during the COVID-19 pandemic for the mining sector.

2.1.2. Research Hypotheses

The research hypotheses in this research proposal are based on the extensive literature review. The hypotheses will direct the nature and outline of the research findings. The following are the primary research hypotheses for this paper:

2.1.2.1. Research Hypothesis One: Force Majeure Vulnerabilities

This research proposal operates on the hypothesis that the pandemic illuminated significant vulnerabilities with the force majeure clauses of labor contracts in the mining sector. In addition, there are significant variations in the force majeure clauses in labor contracts within the mining industry during the COVID-19 pandemic.

2.1.2.2. Research Hypothesis Two: Impact on Labor Relations

This research proposal proposes the hypothesis that the adaptations and modifications mining companies made during the COVID-19 pandemic had a significant influence on the performance of labor contracts and labor relations in the mining sector. This analysis will also elucidate the legal insights into the nature and extent of the impacts.

2.1.2.3. Research Hypothesis Three: Reflection of Legal Doctrines

Finally, this research proposal investigates the hypothesis that argues that legal doctrines of “impossibility” and “frustration” appeared in the context of labor-related contracts in the mining industry during the COVID-19 pandemic.

2.1.3. Research Justification

The justification for these research questions and the derived hypotheses is associated with the legal and practical implications of the COVID-19 pandemic on contracts in the mining sector. These research questions and hypothesis illuminate the intricate nature of contractual relationships, providing actionable insights for various stakeholders in the mining sector.

2.2. Research Objectives

The research proposed in this study is based on three lucid and significant objectives that delve into the impact of the COVID-19 pandemic on contracts within the mining industry. These research objectives include the aim to:

• Conduct an extensive doctrinal analysis of legal literature, statutes, and case law in the United Kingdom and the United States to identify and compare vulnerabilities associated with force majeure clauses in labor contracts during the pandemic.
• Examine the adaptations and modifications in contractual obligations made by mining companies during the COVID-19 pandemic.
• Explore how legal doctrines of “impossibility” and “frustration” were reflected in the broader mining sector during the COVID-19 pandemic.

Satisfying these objectives is a significant element because it ensures that the research can contribute to the knowledge on the legal implications of the COVID-19 pandemic on contracts in the mining sector.

2.3. Boundaries and Limitations

This research proposal acknowledges several boundaries and limitations in the trajectory of the research. One significant inherent limitation is associated with the study scope. This study is limited with the selected jurisdictions; UK and US. Even though the knowledge from these jurisdictions provides diversity in legal precepts, the universal applicability of several elements may be limited. In addition, because the primary methodology is a doctrinal analysis, the proposed research does not incorporate primary data from industry stakeholders; thus, the research can be limited by failing to reflect the broad spectrum of current industry practices, as would be reflected in a qualitative phenomenological research. Nonetheless, this research will provide valuable insights into the legal dimensions of contractual performance during the pandemic in the mining sector.

Literature Review

3.1. COVID-19 and the Mining Sector

There is a complex interaction between contractual obligations and several legal elements when considering COVID-19 in the context of the mining sector. According to a paper by the African Development Bank Group (ADBG), the mining sector suffered significant shocks during the early stages of the pandemic, with most prices of minerals reflecting these shocks with a reduction in prices (ADB, 2021). Some of the reasons for these shocks have been attributed to the contractual elements; for example, some workers were unable to complete their roles within the industry (ADB, 2021).

3.2. Labor Relations in the Mining Industry

This legislation has allowed the country to avoid incidents like the Battle of Virden between mine workers and guards with deteriorated labor relations. On the other hand, the United Kingdom’s labor relations in the mining industry are governed by a combination of employment laws, industry-specific regulations, and the influence of trade unions. In addition, there are health and safety standards proposed by the Health and Safety at Work Act for workers in the mining industry. Considering the apparent similarities in the approach to healthy labor relations, it is clear that labor relations are critical elements for the mining industry, especially in the context of periods of distress like those imposed by the COVID-19 pandemic.

3.3. Force Majeure Clauses in Labor Relations

A fortuitous piece of case law provided details on the potential trajectory of cases that would emerge from cases regarding the performance of contracts in the mining sector during the COVID-19 pandemic. In the United Kingdom, the case of MSC Mediterranean Shipping Company S.A. v. Cottonex Anstalt [2020] EWHC 1615 (Comm) provided essential perspectives regarding an innocent party’s affirmation of contracts following repudiation where performance of a specific contract is regarded “impossible.” The judgment in the appellate ruling in this case provided context for the force majeure provisions within the context of shipping contracts, including invoking the legitimate interest principle in contracts and its congruence with increasing recognition in common law. This case law provides significant perspective for contractual language for common law whose application can be relevant in periods of crises in relation to the force majeure legal precepts by asserting that with a repudiatory breach of contract, an innocent party’s capability to affirm the contract is impossible where further performance of a contract is deemed “not possible.” On the other hand, legal precedents in the United States law have provided context for the operation of the force majeure clause in US law. For example, in Elavon, Inc. v. Wachovia Bank, Nat. Ass’n, 841 F. Supp. 2d 1298, 1306 (N.D. Ga. 2011, the court held that economic downturns as imposed by the 2008 global economic crisis did not meet the criteria for “an Act of God” rendering fallibility in the concept of “impossibility” in the performance of a contract. This clause reveals the vulnerability in the application of the force majeure case, especially when applying it to the COVID-19 pandemic, which combined several adversities, including socio-economic elements.

In addition, there are legal precepts reflected in legislation that can provide perspectives regarding labor relations and the force majeure clauses in the perspective of labor contracts. In the United States, the country’s legislature passed the First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which established legal foundations for specific provisions impacting labor relations; for example, expanding family and medical leave during the crisis period of the pandemic (Burke et al., 2020). These legislative frameworks contextualized the legal environment within which mining labor contracts and the legal framework for labor operations during crisis. Even though the UK law is based on common law principles and limited changes occurred during the pandemic, several acts of parliament had a significant potential to influence the trajectory of legal suits arising in congruence with force majeure clauses; for example, the Coronavirus Job Retention Scheme provided a legal basis for the government to provide grants for businesses to ensure that they could pay 80 percent of their staff wages, enabling them to get to ensure healthy labor relations with firms, including mining companies, being able to guarantee continued performance of labor contracts (Pope et al., 2020). These legislation legal precepts are critical in understanding the precepts of labor contracts in various industries.

3.4. Impossibility and Frustration of Contracts and Labor Relations

Based on the vulnerabilities on the application of the force majeure clause and the comparative variations between the US and the UK, there are necessary critical considerations regarding the precepts of “impossibility” and “frustration” in contracts in the mining sector. Further illumination of the doctrine of frustration is encapsulated in Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696, where “frustration” was outlined as a condition where “without default of either of the parties” a contract becomes impossible to perform. This case law is a robust basis for considering whether “frustration” can apply to labor contracts in the face of “unforeseen events” like the COVID-19 pandemic.

3.5. Summary and Knowledge Gaps

This literature review reveals that the performance of contracts and labor relations in the mining sector invokes a set of complex legal frameworks that outline contractual obligations and external factors. According to this literature review as part of the doctrinal analysis, the existing knowledge on the force majeure clauses in the United Kingdom and the United States answers the first research question on the vulnerabilities in this clause by arguing that the US lacks federal law to discharge direction on this legal precept and there is also subjectivity of interpretation that necessitates precise contractual language. These elements could define the impact of COVID-19 pandemic on the mining sector. In addition, this literature notes that most adaptations and modifications in contractual obligations during the COVID-19 pandemic were reflected in legislation as opposed to precedents and case law. This insight illuminates the value of legislation in creating or amending laws during crisis, including providing a legal framework for renegotiating terms, implementing remote work policies, and adjusting workforce structures; which are significant elements for labor relations. Moreover, even though there are limited cases that invoke the legal concepts of “impossibility” and “frustration” in labor contracts, their manifestation in case law and legal precedents presents insights into how “unforeseeable events” are treated in contractual agreements and the criteria for defining specific elements as “Acts of God.”

Nonetheless, this literature review also illuminates several knowledge gaps regarding the long-term impact of these adaptations on labor relations within the mining sector. For example, it is obscure whether case-specific assessments of the legal concept of “impossibility” and the application of the force majeure clauses would be applicable in the context of the COVID-19 pandemic or whether the circumstances presented in the early stages of the pandemic are sufficient to prescribe “frustration” of a contract.

Expected Results

The expected results of this proposed research includes comprehensive insights into how the COVID-19 pandemic illuminated vulnerabilities in contracts and their performance during the pandemic. In addition, this research can infer legal grounds for the most likely outcomes based on legal precedents in the US and case law in the UK regarding cases that might emerge seeking clarification of “impossibility” and “frustration” in the context of the pandemic. These results will be significant and valuable for industry stakeholders in the mining sector and can define the nature of labor relations and the drafting of future contracts.

References

African Development Bank. (2021, October 12). Working Paper 357 – Impact of COVID-19 on Mining Case Studies of four African Countries. African Development Bank Group – Making a Difference. https://www.afdb.org/en/documents/working-paper-357-impact-covid-19-mining-case-studies-four-african-countries#:~:text=The%20effects%20of%20the%20pandemic.

Andrias, K. (2019). An American Approach to Social Democracy: The Forgotten Promise of the Fair Labor Standards Act. The Yale Law Journal, 616-709. https://www.jstor.org/stable/45389450.

Burke, L., Burton, D. R., Fishpaw, M., Greszler, R., Michel, A., Michel, N. J., … & Winfree, P. (2020). The senate’s coronavirus bill: bailouts, missed opportunities, and positive reforms. Heritage Foundation Backgrounder, (3479), 2020-03. https://www.heritage.org/sites/default/files/2020-03/BG3479_0.pdf.

Burton, K. L. (2015). The Perfect Storm for Labor Reform: Past, Present, and Possibilities for the National Labor Relations Act. Employee Relations Law Journal, 41(3), 4-28. http://www2.ucsc.edu/whorulesamerica/power/history_of_labor_unions.html.

Fourie, A. N. (2015). Expounding the place of legal doctrinal methods in legal-interdisciplinary research. Erasmus L. Rev., 8, 95. https://doi.org/10.5553/ELR.000045.

Gałaś, A., Kot-Niewiadomska, A., Czerw, H., Simić, V., Tost, M., Wårell, L., & Gałaś, S. (2021). Impact of Covid-19 on the mining sector and raw materials security in selected European countries. Resources, 10(5), 39. https://doi.org/10.3390/resources10050039

Kennedy, S. E. (2014). The banking crisis of 1933. University Press of Kentucky.

Laing, T. (2020). The economic impact of the Coronavirus 2019 (Covid-2019): Implications for the mining industry. The extractive industries and society, 7(2), 580-582. https://doi.org/10.1016/j.exis.2020.04.003

Pope, T., Dalton, G., & Tetlow, G. (2020). The coronavirus job retention scheme. Institute for Government, 22. https://www.instituteforgovernment.org.uk/sites/default/files/publications/coronavirus-job-retention-scheme_0.pdf.

Rogers, B. (2016). Employment rights in the platform economy: Getting back to basics. Harv. L. & Pol’y Rev., 10, 479. https://heinonline.org/HOL/hein.journals/harlpolrv10&div=23&id=&page.

Case Law

Taylor v. Caldwell [1863]

MSC Mediterranean Shipping Company S.A. v. Cottonex Anstalt [2020] EWHC 1615 (Comm)

Panda Power Funds, L.L.C. v. A-Power Energy Generation Systems, Ltd. (S.D.N.Y. 2016)

Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696,