What are Policies and Laws?
In order to understand the difference between policy and law, it’s helpful to look at the official definitions of each term:
• Policy: a definite course or method of action selected from among alternatives and in light of given conditions to guide and determine present and future decisions
• Law: a body of rules of action or conduct prescribed by controlling authority and having binding legal force
When looking at those two definitions, there does appear to be a gray area where an organization may have established certain policies to which they adhere. But at the end of the day, the law came first and prevailed over policy, which organizations must follow.
Given that , any time there is a disagreement about the proper course of action, policy comes into question, not law. When law is in dispute then we are talking about the court, attorneys and judges to determine the outcome. So when policy is viewed as law, then you are looking at an ethical dilemma. The issue cannot be resolved because the ethics of the policy don’t line up with the law. Whereas, if policy and law are viewed as two separate things then it is an easier fix. The ethical course of action may be to change your policy to reflect the law. However when you view policy as law, you are pitting your organization against the court and essentially manufacturing an issue.
Objectives and Scope of Policies
Policies: Purpose and Scope
While laws set the legal framework for actions, policies serve a very different – but related – purpose in any organization. In a business or association, policies are needed to guide and instruct organizational operations. Some policies are necessary for the basic functioning of the organization. Often, the obstruction of basic operating procedures can defeat the organization’s purpose and its mission. Take, for example, the business or non-profit that seeks to rely upon a specific person in its management team, but that person is unavailable as a result of refusal to authorize the organization to run a background check. As to that person, the organization has two choices: (a) institute a new policy prohibiting any such refusals; or (b) take the risk that no such policy exists. And when it comes to basic function, the consequences of foregoing a sound policy decision are rarely seen as favorable, and may be challenged as arbitrary or capricious on appeal.
Governmental policies serve an equally vital role, guiding the government’s regulatory powers by specific direction. Federal agencies, such as the Federal Trade Commission, have the authority not to proceed with enforcement of a particular law or regulation so long as its policies, regulations, or some other specific criteria are "met". See 5 U.S.C. § 551 et seq. (2006). Moreover, specific policy or regulatory direction may offer an exception to a proposed enforcement. For example, the Commissioner of Internal Revenue, using express authority to waive a provision of the Internal Revenue Code, is empowered to opt out of enforcing a provision of the tax code as it relates to low-income tax filers. 26 U.S.C. §6015(f)(3) (2006). And where the Department of Labor (DOL) is authorized to order the payment of back wages, a prevailing employee may receive less than the back wages sought where the DOL finds "that special circumstances exist that would make a grant of other than full relief inappropriate." 29 U.S.C. §216(c) (2006). Enforcement of the DOL’s policy is discretionary and will be reviewed using only an arbitrary and capricious standard. And thus, a particular law or code may only be enforced if a regulation, policy, or regulation exists guiding the enforcement decision. That, in turn, exposes the agency to the risk of challenge if a policy or regulation upon which it relied is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.
Objectives and Scope of Laws
Laws are a set of rules or guidelines that are enforced through social or governmental institutions. Laws are made by government and are written into the statute books, or as common law. In Britain, the law made by parliament is known as statutory law. Laws can be enforced by the courts or other government bodies and generally apply to everyone within the applicable jurisdiction. Laws are also written on a national level and can apply equally to large groups of people, rather than on a case-by-case basis.
If nations or countries wish to enter into legal agreements with one another, they can become parties to international law, which is governed by a recognised authority. Drafting policy or statute requires legal knowledge and expertise, as although the formal legal document may appear simple, it can have complex implications if drafted incorrectly. Policy is an administrative guideline, or a course of action that is developed by the executive branch of government, without the need for legislation. Policy must always be modified (updated periodically to reflect current conditions) and reviewed (assessed and evaluated so that the policy remains relevant). An example of this can be seen with renewable energy policies, which are regularly reassessed to ensure that they reflect the changes we are seeing both socially and commercially – e.g. advances in technology and changing laws. Policies are not legally enforceable unless translated into law by way of a statute or other instrument. Policy is often implemented and enforced by administrative authorities. A policy is only relevant and applicable to states, institutions, individuals, non-state actors, etc., if it refers to and is dependent upon pre-existing laws, customs, agreements, policies, etc., under which they occur. For example, investing in renewable energy is policy within environmental law.
Essentially, a law can be considered more powerful than a policy because it affects the public in its entirety. As laws are enforced through social or governmental institutions, if an individual refuses to comply with the law, then a legal body such as a court can enforce the law and punish that individual. An affecting case would be failing to comply with a court order, such as a child maintenance order, which is a formal order made by the court setting out how much a person must pay for upkeep of the child (from a previous relationship). The order is legally enforceable and specifies the amount that the non-residential parent must pay to the resident of the child. If the non-residential parent still refuses to pay this, despite the court order, they can be found in contempt of court and held in prison for a period of time.
Whereas policy is not law in itself and therefore cannot be enforced solely through legal systems, but must be implemented and verified by policy analysts, academics, etc. If policy has been made law, then non-compliance of that policy becomes non-compliance of the law, and the penal system can take over (provided the policy is sufficiently clear and unambiguous). When it hasn’t entered law, however, policy cannot be enforced in the same manner and would rely on non-legal systems. A relevant example of this would be non-compliance with a policy set out in the House of Lords Code of Conduct. The Code of Conduct sets out the rules and obligations that each member of the House of Lords (specifically those in the House of Lords) must follow in their public life. It is expected that members of the House of Lords will adhere to this, and the Parliamentary Commissioner for Standards, or House of Lords Commissioner for Standards, can investigate any allegation of non-compliance. However, as adherence to the Code of Conduct is not legally enforceable, simply being in breach would not compel the Commissioner to take action, because there is no law which would be breached. By contrast, where failure to comply with a court order is a criminal offence, the Police Officer would have no choice but to arrest you, even where you tried to contest it.
Policy Making and Law Making
Policies and laws are created in different ways. The process for creating laws is described below.
Laws are created by a legislative body. They start as a bill that is typically introduced by a member of the legislative body. For example, in the United States Congress, legislation is proposed and introduced by a Senator or Congressman. In many cases, but not all, they hold hearings on the proposed legislation, during which testimony is received from the public subject to certain rules for submitting testimony. This testimony frequently includes expert testimony and advocates for and against the proposed legislation. The proposed legislation is then debated by the members of the legislative body.
In most legislative bodies, the proposed legislation must pass through one or more committees which can modify it and then bring it up to the floor for a vote by the members of the legislative body as a whole. The debate can be lengthy. Amendments to the proposed legislation are often suggested and voted on. The legislation must pass a majority vote of the legislating body before it can become law.
In some legislative bodies, the legislation must go through a second approval system called the reconciliation process in which the legislation is debated and voted on again after modifications are made that result from the first legislative process.
After being approved by the majority of the legislating body, the legislation must go through an approval by the other house of the legislating body before it can become law. This then will trigger the governmental approval process.
The legislation must then receive governmental approval. What this is is dependent on the government. In the United States, for example, many proposed legislations are given to the President of the United States for approval. The President can sign the legislation causing it to become law, he can veto it, or take no action. If he does not sign the proposed legislation or veto it, the proposed legislation can still become law under certain circumstances. The legislature can overrule his veto if both houses approve a 2/3 majority vote of the members of the legislative body.
Implementation and Compliance
Unlike laws, policies can be developed in collaboration with a variety of stakeholders, but local governments are expected to adhere to those developed at the federal and state level. Policies are usually voluntary, and are designed to provide guidance for personnel on the handling of specific matters, rather than being mandatory. Non-compliance with policies therefore carries no legal ramifications. On the other hand, if guaranteed rights under the law are not enforced, discrimination is allowed to flourish.
Laws are also stricter, because non-compliance can lead to civil action or criminal prosecution . If a covered entity does not comply with the law, and discrimination occurs as a result, they can be held liable. Enforcement is therefore focused on a punitive approach, and civil action is often taken. Enforcement of laws is not the primary responsibility of the department that developed the law. Rather, the Office for Civil Rights (OCR) is responsible for oversight and enforcement of most civil rights laws. The OCR may conduct a compliance review, complaint investigation, technical assistance and/or directed investigation, or provide resolution. More severe violators of civil rights laws (for example, extensive and repeated violations) may be subject to enforcement through criminal proceedings.
Cases and Examples
The "through the looking glass" effect is important in considering the distinction between policy and law, and how they can collide with each other. Royal Bank of Canada v Trang involved an employee of the Royal Bank of Canada who stole $288,513 through use of false documentation. The thief was fired, arrested and charges were laid. Meanwhile, the thief paid back $30,000 (that he had stolen from a prior employer…long story). Royal Bank of Canada later sued the thief for the balance owing. It argued that this theft was an example of a plausible action based on its loan policy, and the bank should be entitled to recover it as damages. The trial judge awarded RBC $4336.55 in damages, but not for the creation of liability, rather the amount was awarded for the thief’s breach of fiduciary obligations.
R v Monney is an older case that dealt with rates that the provincial sales tax (PST) should be assessed at. The government of Canada was using its own definition of PST rates, and demanding payments at higher amounts. Even though the PST rates were different in practical terms, the court still used the original directive and found the higher rates were not going to be used.
United Teachers v Ontario is another case in which the court questioned the application of policy as law. The United Teachers considered whether the deduction of union dues should apply to all employees, or just to those who have given consent. The Ministry of Education decided all employees should have union dues deducted from their paycheques. The Pay Equity Office refused to approve this order, marking it as a violation of the Equal Pay Act. The court found that the government had not given consent from employees, and the Ministry’s decision was not binding.
The most well-known case regarding the distinction between policy and law is Amendariz v Canadian National Railway Co. In this case, CN obtained judgement against Amendariz, who tried to appeal. But CN had a specific policy on when booming interests and penalties would be waived. The trial judge had refused to waive these amounts in a unique application. The court found that as CN was obligated to follow its own policies, its policy was not binding and the appeal should be heard.
In this case, Ms. Hung came to Canada as a perspective refugee. She was told she would have to wait a number of years before becoming a permanent resident of Canada. As such, she departed Canada, and after arriving back in Vietnam, she did not get back into the country to live here permanently until 2010. Upon her return, she noticed the government policy had changed during her time away. This made it easier to become a permanent resident. The Minister’s decision was made according to policy considerations, and Ms. Hung’s rights were not considered.
Interaction and Cooperation
Policies and laws also have the capability of working in concert. In many regulatory scenarios, as a matter of practice, they will be aligned. For instance, policy may be made law by statute, or regulations may be used to further embody statutory policy. Laws can also be used to enable policy, such as when they grant agencies the authority to implement and execute them. Or, there may be the situation in which law may be enacted to require agencies to develop policies that result in a new regulatory program. Thus, it can be said that they exist on a continuum of regulatory development and implementation.
A relatively frequent regulatory scenario is the exercise of discretion in most policymaking. That is, agencies are often given a wide latitude in deciding when and how to implement laws; that is, if they are granted such authority in the first place. Therefore, policies may be described as existing at one end of the spectrum of the exercise of discretion and laws at the other , which is punctuated by various intermediate strategies. In this regulatory context, the two can be complementary: Agency guidance, for example, can be used to detail the contours of laws. Such policies can also be used to explain or illustrate the agency’s expectations, giving applicants or other entities with their regulatory responsibilities greater clarity.
Policymaking will also occasionally be used, sometimes jointly, as a mechanism to promote compliance with law. In this context, they can be considered part of a continuum of enforcement strategies ranging from punitive measures such as inspections, seizures, or fines on one end to education and training at the other. And, between these poles is the publishing of performance standards and guidance documents, the latter of which help set expectations regarding compliance and the agency will use that information to anticipate when and where to target enforcement actions.