INDUSTRIAL RELATIONS
ASSIGNMENT 1
Impact of Rapid Technological Changes On Trade Unions
Aiman Rashid Bsmt18020
Introduction
We know that technology is always evolving. The world is forever changing and innovation is
taking place constantly and we can’t overlook these factors. With the metamorphosis of
technology, the procedures at the workplaces are changing and the world is going towards
automation. This automation of all the procedures has a direct impact on the labors. This is
because they are low skilled and less educated as compared to high skilled workers i.e.
employees. And in automation, the management mostly replaces the labors with machines and
they are laid off which is actually a basic right violation. There should be proper contracts made
between both the parties so that the security of labor rights is ensured.
Relationship Between Employers and Trade Unions
The first trade union was formed in 1818, whose purpose was to give labors collective
representation and also to work as an intermediary between the employers and the labors. In
many countries, rules are passed that the management has to consult or at least inform the
trade union before they set any rules, change any procedures or do any technological changes
etc. In Fact, a law was made that the managers would have to inform the unions, about two
years beforehand, about any pre planned technological changes due to which they will lay off
their labors. But there had always been a very distraught kind of relationship between the
employers and the unions. Employers predominantly assume that unions are a hurdle towards
any technological change because they think that either the union opposes the technological
changes or put so many costly conditions so as to cancel its positive impact. However, the
reality is opposite because unions know that if there is any advancement in technology, the
productivity will increase and it will lead to the increase in labor benefits. Yes, there is
resistance towards technology by labor unions but it is in exceptional cases and their root
causes are the massive layoffs of workers and their replacement with machines. However, the
resistance of labors towards the technological changes was reduced after the formation of
trade unions because they knew that now they have collective representation also, the unions
started some training activities for the labors. And the management also, somewhat realized
that the machines can be effectively used on a certain task only if the labors who were
previously doing that task manually, are there for its handling and task guidance.
Industry 4.0
Since the era of automation is approaching, which is also known as “Industry 4.0”, there are
and will be many difficulties faced by the unions to control the situations, but it is not in any
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way a solution to oppose the technological revolution and strike against it. And mostly the
unions don’t do it. For example, in the year 1976 in Columbia, a labor union named as
Federation of telephone workers did not oppose the technological advancements going in the
telephone sector, however they made sure that there is no bad effect of this transformation on
the labors. They made sure that the labors were given proper trainings, no income loss should
take place for the workers and early retirement should be offered by companies. Now we will
take another example, which is of General Motors. In 1990s, general motors was facing severe
economic crisis. To come out of this crises, they adopted a strategy in which the University of
Michigan and United Automobile Workers played a very important role. UAW did negotiations
with GM to have fewer job classifications and a two-tier wage structure, and a new technical
education campus was built by the University of Michigan to train the labors. GM setted up new
plants and succeeded in its strategy. When there are any kind of crisis faced by a company,
both employers and labors go through that crisis. Unions can have integrative bargaining and
come to win-win agreements to deliver mutual gains to both employers and labors.
Preparation for “Industry 4.0”
There is no such homogeneous picture provided by any research on the question that how the
trade unions all over the world are preparing for the “Industry 4.0” or in other words, the era of
automation. However, the practices of trade unions of many developed countries, to cater with
the issue raised due to automation are reported. For example, the Italian Federation of
Metalworkers, Italy are asking for professional trainings to be the basic right for labors and
should be written in the NCA (national collective agreement) of the metallurgy sector. Also, as
mentioned above that the machines can only be profitable if they work under the observation
of the workers who were performing the tasks manually which are now done by machines. This
is because the workers who were professionally doing a task for a long period, mostly know
about it more than any person at the managerial level. As it is stated in the German model of
co-determination that if the workers’ are given representation in case of decision-making better
and effective decisions can be driven out which in-turn will make automation truly successful.
And in this way workers’ representation can also be a main claim of unions as it is beneficial for
both employers and labors.
Difficulty Faced by Unions
Difficulty is faced by unions while policy making in concern with technological changes. History
shows that most of the companies which did not keep up with the technological changes,
eventually failed however those which adopted them, stayed and even prospered. In the first
ones, all the workers lost their jobs but in the second ones, some lost their jobs, some lost the
usability of their skills and some had both, but also at the same time, many retained their jobs.
Also the industry expanded due to the new technology and the employment increased as well
as the skills of labors. But these skills did not come to the labors themselves, proper trainings
were given to the labors. In such circumstances, resolutions should be passed by the labor
federations as one was passed by Ontario Federation of Labor in 1978, stating that the setup of
training boards should take place so that the country’s needs for the skilled labors could be
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meet by an all-embracing training program. The service areas should be placed under this
program and the training should be made sure to cancel the negative effects of technological
changes.
Attitude Of The Canadian Unions
The attitude of Canadian unions was conditionally positive which means that they understand
that technological change is important but they make sure that accommodations are made for
the workers who are adversely affected. One of the Canadian unions addresses that actually we
don't oppose technological change if certain conditions are fulfilled. There should be maximum
protection for the workers from its negative impacts. The employer should consult the union
before the introduction of any change. There should be share in the profit resulted from a
technological change for the directly affected workers. The union policies depending on the
responds of unions were; conditional acceptance was 42.6%, resignation was 18.5%, adhocracy
was 16.7%, opposition was 14.8% and unions at the uncertain position were 7.4%.
Major provisions
1. The major provisions saught by the unions are;
2. Beforehand notice of any technological changes.
3. Consultation of management with the labor unions regarding time, accomodation of
affected workers.
4. Guarantee that the technological changes will not lead to any job losses to the regular
employee however skills might be lost.
5. The employers will commit that the employment reduction will take place at agreed
upon annual rate through resignation or retirement.
6. Allowances for the workers who chose retirement.
Anticipated employment effects of future technological changes
The unions were asked questions regarding the future technological changes. The questions were
designed to know about the knowledge and anticipation of unions about the future technological
changes but the surprising thing was that the unions were unaware of all the technological changes
which are going to take place in future. Most of their responses showed that they are reactive which
means that they will wait for change to occur and then access and react to it and negotiate with the
employers to get the rights of the labors, saved. And most of the experiences suggest that reactive
approaches are not the safest ones. according to most of the unions, the future technological changes
would have a negative effect on employment.
Conclusion
Yes, I think that it would be a worldwide phenomenon because automation will eventually reach
everywhere around the globe. But yes, it depends on people’s attitude and culture and various factors
that how the unions of that certain area will behave towards automation, but mostly the above
mentioned factors will be true.
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Bibliography
https://www.jstor.org/stable/23072022?read-now=1&seq=13#page_scan_tab_contents
https://www.forbes.com/sites/kaviguppta/2016/10/12/will-labor-unions-survive-in-the-era-of-
automation/#7da984d73b22
