The changing nature of the world of work, digitisation and impact on labour law, wages, social security systems and social dialogue

On May 18-20, 2017, an international conference on “The changing nature of the world of work, digitisation and impact on labour law, wages, social security systems and social dialogue” was held in Vilnius. The conference was organized by the Lithuanian trade union “Solidarumas”, in conjunction with EZA (The European Centre for Workers’ Questions) and co-funded by the European Union.

The conference was part of the EZA project co-ordination about „Digital world of work – technological developments and changes at the workplace“.

The conference was aimed to share insights about the changes in the labour market as a result of technological advancement. The ever increasing pace of high technologies has exerted an influence on the so-called 4.0 industrial revolution. It is only natural that the changes going on in the economic sphere influence societal changes. Digitization and robotization in the sectors of industry and services bring forth relevant changes in the world of labour. Today, we are witnessing the emergence of new industrial relations and innovative forms of employment.

One of the main goals of the European Commission headed by Jean-Claude Juncker is to create a single digital market, that is, a market which ensures a free movement of goods, persons, services and capital. A single digital market can contribute towards a faster growth of the European economy, promote job growth, foster the competitiveness and innovation-driven entrepreneurship as well as provide new opportunities for start-ups and development of existing businesses.

Industrial revolution 4.0 opens up new opportunities but at the same time poses certain threats. As a result of this revolution, disparities and inequalities among the countries concerned and within the countries can still increase. 

Under the circumstances, the world of work is undergoing a major process of change. What should be done on the national scale and what challenges should be undertaken by international organizations such as the ILO and ETUC?How should we adapt to the changes of today? How are the industrial relations likely to evolve?

What awaits workers in the future and to what extent will are the labour protection and social security be guaranteed?

What actions should be undertaken by trade unions to make sure that they keep pace with the technological changes, facilitate workers‘ adaptation to change and seek to ensure social protection for all workers.

The key topics discussed during the Conference were as follows:

·         The future of the word of work in the context of technological changes

·         Decent work for all. Working conditions. Wages. Social protections.

·         The changing the world of work. Organisation of work. A new role of social dialogue.

On May 18, the venue of the conference was Conference Centre “Karolina”. The participants were welcomed by Ms. Kristina Krupavičienė, President of the Lithuanian trade union “Solidarumas”. She also gave an overview of the conference, highlighting the topicality of key issues to be discussed. The following person to address the conference was EZA representative Ms.Jelena Soms, coordinator of the EZA project “The Digital World of Work – Technological Development and Changes in the Workplace”. Participants of the conference were also welcomed by Mr.Thiébaut Weber, Confederal Secretary of the European Trade Union Confederation and Mr.Luis Colunga, Deputy General Secretary of IndustryAll.

EZA representative Jelena Soms made a presentation on “The Future of Work within the Context of Technological Changes.She made an overview of the activities undertaken by EZA within the framework of the project “Digital World of Work – Technological Development and Changes at the Workplace” and provided thorough information about 6 different seminars organised  (some of them to still be held) by EZA, as part of the project in question.

During the presentation, the following topics were discussed:  position of the European Commission, a possible future of the world of work, threats and opportunities, challenges, digitisation from the perspective of work-life balance and the role of trade unions.

During the discussion which followed the discussion, quite a few comments were made about the influence of digitisation and robotisation (smart phones, work on online platforms, etc.) on our daily life and possible societal changes. Concerns were raised about the future, for example, how taxes will be collected, if human beings are replaced by robots; who will use the end product if there are many unemployed, etc.

On May 19, the conference took place in the Constitution Hall of the Seimas (Parliament) of the Republic of Lithuania. The first part of the conference – The Future of Work within the Context of Technological Changes” – was moderated by Ms. Kristina Krupavičienė, President of LPS Solidarumas. Participants of the conference were also addressed by Mr. Algirdas Sysas, Chairman of the Committee on Social Affairs and Labour of the Lithuanian Seimas. Mr. Sysas shed light on the undergoing changes in the labour market, changing industrial relations and the capacity of trade unions to influence political decisions in Lithuania. According to the speaker, “the capital exerts more influence on political decisions, compared to the influence of trade unions. We are witnessing a significant social exclusion in the country and the lowest wages in the EU. Furthermore, the sytem of collective bargaining is underdeveloped, and unemployment insurance is only paid out to a small percentage of persons who lost their jobs. The good news is that Lithuania‘s problems have already been addressed by the EU and identified by the European Commission in its recommendations developed for the EU member states.

Ms. Maria Helena André, Director of the Bureau for Workers‘ Activities (ACTRAV), International Labour Organization, welcomed the participants of the conference via a video presentation, thus demonstrating the use of state-of–the-art technologies. She introduced a new Future of Work initiative,launched by ILO. The world of work is undergoing a major process of change. It is directly influenced by such key drivers as globalisation, climate change, demographic changes, technological impact as well as the financial strength and concentration of global economy, to name a few. Technological innovations and their continuous development have always been influencing the world of work. However, the changes we have been exposed to during the recent years are unprecedented. In order to better understand and to respond effectively to these new challenges, the International Labour Organization launched in 2015 a new Future of Work initiative,which will continue until 2019, when ILO’s centenary will be commemorated. The aim of the initiative is to involve the ILO’s tripartite constituency – workers’, employers’ and the government representatives - fully and universally, but also to reach beyond them to the academic world and all other relevant and interested actors in order to jointly tackle the challenges in the world of work, to seek solutions of how to shape the world of work, which would be attractive to all, to advance social justice and promote decent work for all. The "future of work centenary initiative" is structured around four "centenary conversations": work and society, decent jobs for all, the organization of work and prduction and the governance of work.

Mr. Ramūnas Darulis, who replaced during the conference Ms. Eglė Radišauskienė, Viceminister of Social Security and Labour of the Republic of Lithuania, made a presentation on employment trends and changes in the Lithuanian labour market. The analysis of the country's employed population structure by age groups reveals that there is a relative annual decline in the working age 25-54 population and a growing weight of young people and older persons involved in the labor market. Even the share of working retirees is slightly increasing. The growing participation of youth and senior citizens in the labor market shows that given a high wave of emigration and the growing shortage of skilled labor, attempts are made in the labor market to more efficiently use the available labor resources.

The economic sectors employing the greatest number of people have for many years remained the same, including wholesale and retail trade, manufacturing, education, agriculture, forestry and fishing, construction, transport, health care, public administration and defense. Today, we can still see a pronounced differentiation of male and female professions. In 2016, most of the plant and machine operators and assemblers as well as skilled workers and craftsmen were men - respectively 81 and 78.3 percent. A slightly smaller gender-related difference is identified among managers and directors - 60.4 percent of managers were men, while women accounted for 39.6 percent. Among the highly skilled agricultural, forestry and fishery workers, men accounted for 60.0 percent, whereas women made 40.0 percent. Most women were employed as office clerks and service and sales workers - respectively 75.7 and 74 percent. The majority, about 44 percent of the employed population, have a university or college education. During the period in question, the number of employed persons with primary or education increased from 3.3 percent in 2011 to 4.1 percent in 2015. During the period of 2011-2015, the number of the employed persons with basic education and professional qualifications decreased by 4.9 thousand, and amounted to 28.2 thousand in 2015. Likewise, the number of employed population with secondary education and professional qualifications also decreased by 5.2 thousand, and in 2015 reached 254.1 thousand.The speaker concluded by saying that the Lithuanian labor market has not yet entered the so-called "fourth industry" phase. The transition to digitization and innovation has been left to chance. However, recently progress has been made. The Ministry of Economy has developed national "Industry 4.0 platform". This decision was made by the Government of the Republic of Lithuania in May of 2017. The initiative aims to promote more systematic activities, expand the network of partners at national and regional level and to integrate the country into European development. Prior to launching this initiative, preparatory work had been conducted by the Working Group, consisting of the Lithuanian Confederation of Industrialists (LPK), Lithuanian Engineering Industries Association LINPRA and the German-Baltic Chamber of Commerce (AHK).

Among the major challenges in Lithuania is the absence of any functioning system for retraining or upgrading skills and qualifications. This makes it difficult for people of older age to reintegrate into the labor market. The attitude towards older people should be changed, by promoting the awareness of the society and the stakeholders.

After the presentation, questions from the audience were raised about the importance of having the long-term perspective, the estimate for marketable professions and the future of jobs. This seems to be is of particular importance for the individuals when working with high school students.

Mr.Marius Vaščega, Economic Governance Officer of the European Commission in Lithuania, gave an overview of the current initiatives and policies adopted by the European Union. His presentation was entitled "Industry 4.0 and the changing world of work: how will Europe react?" Mr.Vaščega introduced the evolution of industrial revolutions, presenting the following four stages of industrial breakthroughs: in the end of the 18th century, the steam engine was invented, and the industrial use of steam and water power was started. The end of the 19th century saw the emergence of work sharing, mass production and consumption of electricity for industrial purposes. The second half of the 20th century was characterized by the advancement of information technologies and automation processes, whereas the 21st century is known for the ever-increasing “connectedness” of devices and sensors to the Internet, deployment of AI (artificial intelligence)  applications, the Big Data as well as IoT (Internet of Things). These technological innovations induce changes in the world of work. Thus, the number of persons employed in the service sector is ever increasing; more and more people choose new ways of work, including telework; workers/employees change their employer much more frequently; a significant number of people are employed part-time; the share of older workers participating in the labor market is on the increase. In their professional life, people are already confronted with such challenges as the adoption of radical innovations, replacement of long-term contracts with short-term contracts and introduction of new types of employment. Furthermore, more requirements will have to be complied with in one’s professional career such as the need to pursue a dynamic and life-long learning and the increasing need for the development of interdisciplinary competences and creative skills. One workplace jobs will be replaced with on-call, zero-hour or off-site employment. The balance between work and personal life will be distorted, as these two areas are likely to become more and more intertwined.

The above mentioned changes in industry and labor market conditions result in the growing gap between countries and between regions within countries. The results of surveys show that Europeans find social issues of utmost importance.

Eight out of ten Europeans believe that unemployment, social inequality and migration is a major challenge for the EU; more than half of Europeans believe that not everyone has the opportunity to achieve success and fulfillment, and the life of future generations is likely to be even be more difficult.

In order to better respond to citizens' expectations, the European Commission has drawn up the European Pillar of Social Rights, which sets out a number of key principles and rights to support fair and well-functioning labour markets and welfare systems. The development of the European social dimension is regarded as part of the Reflection Paper on the future of Europe. The document is divided into the following five areas: development of the European social dimension, development of economic and monetary union, globalization containment, the future European defense policy and the future of European finances.

Mr.Luis Colunga, Deputy General Secretary of the Trade Union Confederation IndustriAll, shared his insights about the future of the European industry. Industrial production is still 12% below the pre-recession period. Therefore the IndustriAll full supports the EU objective to increase the share of industry back to 20% and support internal demand by all possible means, including the following measures: stopping austerity policies and deregulation of labour markets, strengthening  social security systems, turning precarious jobs into stable contracts, introducing a fairer income taxation and a more equal income distribution, increasing wages, switching taxation from labour to capital and advocating environmental policies, fighting tax evasion/avoidance in order to restore public finances.  Mr. Colunga stressed that full employment should become a strategic goal. Support measures to fo facilate the transition to a low-carbon economy are needed. Exploring the synergies between industrial policy and environmental policies by further developing the toolbox for a sustainable industrial policy (regulations to promote the uptake of sustainable goods/services, lables, standards, taxes, subsidies, sustainable technologies) should be made priority issues high on the EU agenda. These measures should be underpinned by broad and long term policy frameworks and action plans (Energy Union, European climate plans) in order toprovide more safeguard measures to industry.

Special attention for the promotion of the circular economy is needed, with a view of creating new  jobs (from ‘take-make-dispose’ to ‘closing the loop’ at all stages of the lifecyle of a product: turning waste in secondary raw materials, ecodesign of products, repair, re-use, re-manufacturing before throwing away). More programes should be available to promote innovations as the main driver for industrial policy in order to reinvent the traditional industrial sectors. It is both the duty and obligation of politicians to maximise the social and economic benefits of ICT’s.

With regard to industrial policy, it should be understood by all stakeholders that sustainable, affordable and secure energy is the key factor. Implementation of the European Energy Union has a potential of creating 900,000 new jobs. The energy price has to be competitive. Adequate measures should be introduced to develop energy efficiency technologies. The social dimension of industrial policy is of utmost importance witthin the context in question, therefore structural change has to be managed in a socially acceptable way. It means that the best possible solution should be found for every worker who is a victim of restructuring. Furthermore, active labour market policies have to be developed and adopted to ensure a smooth transition from one job to another. Regional reconversion strategies should be available for regions which fall victim to large restructuring processes (including such measures as developing smart specialisation strategies, decentralisation of economic activities, building new infrastructure, tackling skills gaps, promoting life long learning, etc.)

Free trade must become fair trade. Bearing in mind the fact that 90% of global growth during next decade will come from outside Europe, global level playing field is necessary. Trade agreements must create an equal level playing field and should address unfair trade practices. The EU anti-dumping regulation must be enforced.

Mr.Dalius Gedvilas, Vicepresident of the Lithuanian Confederation of Industrialists, delivered a presentation on "The Adaptation of the Lithuanian Industry Sectors to Digitization". The Lithuanian Confederation of Industrialists unites 3000 companies, 50 sectoral associations and 7 regional organizations. The industrial sectors represented by the LCI account for 64 percent of GDP, that is, 19 billion Eur. In total, more than 550 thousand people are employed in these industry sectors. During the last five years, the number of workers/employees in the industrial sector has increased by 6.5 percent. During the recent years, the share of self-employed persons has also increased. Thus, during the last five years, the number of the self-employed has increased by 25 percent. Most of them (about half of the total number) are employed in the service sector, to be followed by those employed in agriculture (second place), construction sector (third place) and industry sector (fourth place). 

The number of unemployed persons in Lithuania is decreasing. On the other hand, we see more and more foreign nationals taking Lithuanian jobs, mostly from Ukraine and Belarus.

In the attempt to cope with the current challenges, the Lithuanian Confederation of Industrialists has launched the initiave of creating a register of job resources. The speaker illustrated the point by demonstrating a specific register of construction workers‘ competencies. Such a register provides the stakeholders with a unique opportunity to quickly and easily share evidence through digital channels (at any time and at any place) that the individual has the approved competencies.

The persons employed in the construction sector are issued the so-called builder‘s card, which includes the data confirming that the person in question is a builder, that he/she is legally employed, that the building site where the person is employed is complying with the requirements of the working time, that the employer of this building site only employs persons who have the authorization to work as builders. The card also contains data about the professional competencies of the person in question, the details of his/her business licence and the procedure for issuance the license as well as compliance to the procedure of issuing tools and work equipment. The register and the builder‘s card are believed to help ensure legal work at the building site.

Mr.Thiébaut Weber, Confederal Secretary of the ETUC spoke about changes in the world of work and challenges for workers’ representation. The first and the second industrial revolutions brought forth new key dimensions in industrial relations, including the labour standards, labour contracts, fixed working hours, the emergence of trade unions and many other things that had not existed before.

We as trade unions representatives should understand that the world of work keeps changing every day and we should find new methods how to protect the people who are participating in the new digital world of work. The new forms of employment embrace the self-employed, free lancers, crowd workers (on-line platform workers), etc. We should draw upon the experience gained by our colleagues in other countries who have already been familiar with such kind of employment for some time and have achieved certain success in protecting these types of employees.

The second part of the conference was dedicated to discussing the challenges related to decent work for all, including working conditions, salaries/wages, social protection, etc. The session was moderated by Ms.Jelena Soms, coordinator of the EZA project.

The key presentation was made by the UK representative Ms. Kathleen Walker Shaw, GMB European Officer, member of the European Eonomic and Social Committee.  The speaker presented the EESC opinion on the changing nature of employment relationships. The presentation was entitled "The New Forms of Employment in Europe. The impact on working conditions, wages and social protection".

The exploratory opinion was elaborated in response to the request made by the Ministry of Social Affairs and Employment, on behalf of the Dutch residency of the Council and under Article No 304 of the Treaty on the Functioning of the European Union (2015) to draw up an explanatory opinion on the changing nature of employment relationships and its impact on maintaining a living wage, and to the request of the Ministry of Foreign Affairs of the Slovak Republic, due to take over the presidency of the Council in July 2016, to to draw up an explanatory opinion on the impact of technological development on the social security system and labour law. The EESC has considered issues related to the newly emerging trends in employment relations and made a comprehensive assessment of the ability of existing labour market and social security systems to face the new development to avoid greater inequalities, ensure people can maintain a decent and reliable income and a balanced work and family life. In its explanatory opinion, the EESC highlights the importance of evaluating the impact of technological development and changes in the industrial sector on the labour market and labour standards, economy, tax and social security systems and wages. It is necessary to promote innovation and competitiveness and the exchange of good practices in order to ensure sustainable development and competitive social market economy. Furthermore, the development of social welfare models, adapted to the flexible forms of employment, should be considered as a priority issue. This should be reflected in the European Pillar of Social Rights.

EESC recommendations are as follows: The changing nature of work and employment relationships is developing so rapidly that the development of contractual relations is lagging behind. Therefore, the legal status of new employment forms has to be addressed. The Written Statement Directive has to be reviewed, in the hope of extending its scope of application, including the new forms of employment relationships. The role of labour inspections has to be strengthened by allocating adequate resources for their activities. The EESC notes that the European Commission is currently consulting on the Written Statement Directive and anticipates that addressing new forms of employment relationships will be included in proposals should the Commission decide to revisit this legislation.

A rapid development of online platforms basically exerts a positive effect on the economy, employment and innovations. However, in certain cases their development reaches such a scale that there is a risk of creating monopolies and in such a way distorting the market and creating unequal conditions of competition.

Off-site employment can also pose a threat to the health and safety of workers, clients and the public at large.

In order to protect workers, clients and the public at large, the liability for accidents at work should be clarified. Currently, these issues are rather vaguely addressed by some online platforms.

The new employment models, those of sharing economy among them, should not become a means of abuse, in the attempt not to pay decent wages, to avoid tax and social security obligations or violate labour law and working conditions by transferring costs on the shoulders of consumers and workers as well as to avoid compliance with the rules set for non-internet based business.

Furthermore, the rights of crowd and precarious workers as well as those working under constantly changing conditions should be clarified, among them those related to the working hours, collective bargaining coverage, freedom of association, information and counseling, upskilling and reskilling, rest breaks, the right to social security, entitlement to insurance and benefits, the right to challenge an unfair decision by the management, user ratings and de facto illegal dismissal; the right to refuse the pork proposed at the last minute without fearing any penalies; a fair wage and the right to remuneration for the work completed.

Ms. Kathleen Walker Shaw also spoke about Uber. “Uber is a transport company, EU lawyers says”.  “The American company Uber operates in the field of transport and is not an information society company”, a top EU lawyer said in advice to the Court of Justice of the European Union on Thursday (11 May). The court said in a press release that, according to one of the court's advocate-general, "the service offered by the Uber platform must be classified as a ‘service in the field of transport’."

During the judicial proceedings, additional conditions were offered by Uber to some drivers, such as payment for sick leave, etc. But by doing this Uber actually confirmed its responsibility as an employer. The Uber case shows us the threat of sharing economy. People who are using online platforms just want to save a few Euros and they don’t have the idea that in case of an accident they could lose hundreds of Euros because Uber is not held liable for accidents.

Professor Raul Eamets from Tartu University, an expert on macroeconomics, shed light on the future labour market in Estonia. According to the Professor, nobody knows what the future holds in store. It is impossible to say what might happen in 50, 25, 10 and even 5 years. We can make some forecasts, but we cannot predict the future with 100%.

At the end of the second day Mr. Paulius Vertelka, Director of the Association INFOBALT, made a presentation about the special program aimed at involving female students to the IT training program “Women go Tech”. The program aims to break stereotypical notions and promote IT professions among women. Currently, according to statistical data, there is a significant gender gap in IT studies, with a proportion of 90/10 (male/female). We have all reason to believe that the program in question will significantly narrow the gap by involving more women and girls into IT studies.

The topic of the last day of the Conference was “The New Role of Social Partners in the Changing World of Work”. The session was moderated by Ms. Jovita Pretzsch, Secretary General of LTU “Solidarumas”.

Mr. Rimtautas Ramanauskas, Deputy President of LTU “Solidarumas”, gave an overview of the current situation in the world of work and the challenges to be addressed.

Ms.Lina Sabaitienė, Viceminister of the Ministry of Economy of LR spoke about the future possibilities for Lithuania in its aspirations to become a country with high-technology production.

During the discussion with the participants of the conference, the following measures were highlighted: developing and launching education system reform; introducing the assessment of universities/high schools and reviewing the curriculum introduced; benchmarking graduate employability upon completion of their studies; developing marketable skills for future professionals.

Supporting industry and innovations in all possible ways is also identified as a priority issue.

The last speaker to deliver a presentation was Mr. Jonas Gricius, representing State Labour Inspectorate under the Ministry of Social Security and Labour. Mr.Gricius spoke about collaboration between social partners, the work of labour disputes commissions and the possibility to work together in a more efficient way.

The conference was closed by Ms.Jelena Soms, EZA coordinator. She made a summary of the key message of the conference. Ms.Soms promised the participants to update them with information about the progress achieved during the implementation of the project.

Conclusions:

·         Technological development exerts an impact on the changes in industry; the world has entered the fourth stage of industrial revolution, the so-called 4.0 industrial revolution.   We are witnessing fundamental changes in the world of work, such as digitization, new forms of employment, a wide range of employment contracts, etc. Within this context, a huge responsibility rests with the politicians.

·         To a great extent, the future of our society and our labour market as well as the nature of our social policy depends on the politicians‘ decisions, their values and ideological attitudes. The measures aimed at reducing poverty and income inequality. Providing adequate opportunities for upskilling and reskilling people should become priority issues high on the political agenda at all levels of governance.  

·         No single European country can successfully use all the opportunities provided by the digital era on its own. Digitization of industry totally depends on a common industrial strategy developed by the EU and EU member states. 

·         Social partners should devote more attention to the new forms of economic activities such as circular economy, sharing economy, online platforms, etc. It is of utmost importance to ensure as smooth as possible transition to a new era addressing the challenges caused by the drastic transformations on the world of work. These changes could further deepen the existing economic disparities between countries and even within the countries.

·         New forms of employment emerge at such a fast pace that the development of contractual relations cannt keep pace, therefore the legal contractual status of new employment forms has to be addressed, the sooner the better. 

·         The Written Statement Directive needs to be reviewed, in the anticipation that its scope of application will be extended to include new forms of employment.

·         Labour inspectorates should be ensured a role and given the resources and training to fulfil this role.

·         The rapid development of online platforms is bringing forth unprecedented challenges for the world of work. Thus, off-site employment can pose a risk to the health and safety of workers/employees, customers and the general public. In order to protect workers/employees, customers and the public at large, liability for safety and accidents at work has to be established. The problem is that these issues are rather vaguely addressed in some online platforms.

·         The social dimension is extremely important. In some EU member states, social security systems are stuck within the transition from planned to market economy. Another factor that raises concern is the challenge of ageing society and its impact on the economy.

·         Our labour markets are facing major challenges. There is no certainty anymore what jobs and how many of them will be required in the future. Which jobs will be displaced by technologies? What marketable skills and professions will be needed?

·         Encouraging everyone to acquire digital skills and further develop them should be among the EU priorities. To pursue this goal, education reform should be developed and launched. The reform should also aim to ensure lifelong learning and adult education.

·         The situation in Lithuania is further encumbered by the absence of a functioning  professional upskilling and reskilling system. This makes it difficult for older people to reintegrate into the labour market. To address the situation, the attitude towards older people should be changed  by providing more opportunities for these individuals to facilitate their participation in the labour market.

·         Participation in the “Industry 4.0“ platform, created under the Ministry of Economy of the Republic of Lithuania, should be encouraged. Furthermore, closer cooperation with the “Infobalt“ association should be pursued.

 

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