Changing employment relations, labour law & Challenges for Trade Unions

Changing world of work Changing employment relationships because relations with market – consumers and methods of organizing production have changed Production not the most important (outsourcing), ownership of brand name and marketing is – this has consequences for what kind of workers are needed –. HRM policies – not just cheap labour, but committed workforce - by passing unions, restricting unions to just the ‘wage question’ From control via procedures to control through results Changing worker?

Why focus on Employment Relationships? Traditionally, unionism & labour law has been based on – Existence of employer-employee relationship Existence of employer-employee relationship Wage earner status of (male) workers Wage earner status of (male) workers A fixed Work place – factory/firm/establishment A fixed Work place – factory/firm/establishment But the changing world of work, flexible labour markets, TAW, rise of informal economy employment & disguised employment relationships are exposing the inadequacies of such assumptions

Issues for discussion Labour law protects who? Who is an employee becomes a crucial issue for labour law, for workers protection, benefits & union membership. What kind of employment is being offered nowadays? Does the labour law & TU protection offered to outsourced/ contractual workers differs from regular full time workers in your country?

Ex: Changing employment relations in transport sector owner-driver schemes: drivers “converted” to owners of the trucks - drive it exclusively or almost exclusively for one company; instead of wage, paid per load (tonnage) delivered Company car driver converted into owner of the car – paid on number of Kms driven Cabin crew given commercial contracts to provide in-flight services rather than employment contracts Mini- bus conductors hired casually employed by drivers who themselves are paid by passenger load Porters, cleaners on trains, stations, catering services, security guards - Airport services - loading, unloading & other ground staff

Gaps in labour law labour laws based on the assumption of employer-employee relationship BUT most of the new employment is ‘contractual’ - where the employment is offered not as appointment but as assignment (as if in a client-supplier relationship) – often takes the workers out of the ambit of labour law Many benefits under labour law depend on long term employment/regular status employment relationships in informal economy not addressed adequately, if at all (disguised employer-workers relationships) Does not cover unequal bargaining position of workers engaged in work for remuneration outside the strict employment relationship

Issues for discussion What does denial of employment relationship do? - Creates Precarious employment: Employment relation that gives employers flexibility but leaves workers with unstable & insecure work, with limited rights & benefits, and little control over how work will be carried out. - Shifting of business risks & liabilities from employer to worker, society & govt (Ex. in case of accident, for social security, employment) - In many countries takes workers out of the ambit of TUs and CBAs - Increase in legal disputes - what else?

First to be hit in times of crisis Workers in precarious employment – Often ineligible for any type of severance payments or unemployment benefits. Special arrangements like short-time working, placement assistance, income support and retraining schemes apply only to the regular workforce - precarious workers are mostly not covered. In many countries migrants cannot form or join unions or be office bearers – law & practice varies

Securities/Rights denied in precarious employment Labour market security – employment opportunities Employment security – protection against arbitrary dismissals, regulations on hiring & firing, etc Occupational security – secure occupation &/or opportunities for career development Work security – protection against accidents, illnesses at work, safety & health regulations, working hours, etc Skill reproduction security – opportunities to gain/ retain skills (formal apprenticeship, emp trg) Income security – Regular payment of wages Representation security (FoA, collective bargaining)

What are labour law reforms trying to do? Promote employment flexibility, increase management powers of bringing about changes at work place & …what about the workers? In return for flexibility, higher compensation, training & redeployment for workers BUT this should be done mainly by the State!  While the costs of downsizing, insecurity of workers & investment in human capital (education & training) are sought to be passed on to the State BUT its role in regulating workers rights is being eroded

For policy makers the main issue is – how do you balance the need for social protection of the workers with the need of the industry for production and employment flexibility? If the objective is to promote Decent Work for All, what should be the national policy on protection for workers? in or outside the employment relationship?

Given that workers bargaining power is limited, labour policy/labour law should ensure that no person is employed/engaged under conditions that country does not regard as ‘decent’ – which implies – Employed on wage that is insufficient to live on Be deprived of the payment or benefits to which they are entitled to Be subject to coercion, discrimination, indignity or unwarranted danger at workplace Be required to work for so many hours that he/she is effectively denied a personal or civil life Plus - Right to organize & bargain collectively The crux of Decent Work

Negotiating change at national level … Ensure Right to Organize & Right to Collective Bargaining! Set nationwide floor labour standards – that apply to all workers & employers (de-link labour standards from permanency of employment) Roof to be attained thru Collective Bargaining – the right to which should be ensured. Promotion of the ILO’s Employment Relationship Recommendation - the employment relationship is the basis for labour law and its protection and vital for the respect of ILO standards. Fair Contract Act – to cover ‘dependent contractors’ and provide them with some bargaining an social security rights.

Why Labour Rights/Standards? Labour Standards are not just a question of workers rights BUT are also means to promote sustainable economic growth! Labour standards create conditions for growth of domestic markets, enable sharing in gains of growth & spread of purchasing powers – widens domestic markets, encourages investment - makes domestic economic growth more sustainable.

Issues for Discussions What kind of jobs are being created in the economy? [Forms of work relationships] What are the ‘means’ available to unions to enforce workers rights (especially rights to organize & collective bargaining)? Services required by precarious workers, and unions role in enabling access to them Who is the employer? Power of private equity funds to close down enterprises, cause job losses or put pressure for re-negotiations of CBAs.

ILO Recommendation No 198 on Employment Relationship

Determination of Employment Relationship ILO Recommendation Whether an employment relationship exists or not should be determined by ‘facts’ not ‘form’ Provide for legal presumption of existence of employment relationship where one or more relevant indicators are present Reduce or reverse the burden of proof – from workers to employers In consultation with W & E organizations, provide that workers with certain characteristics in general or in a particular sector will be deemed to be either employed or self–employed.

ILO Recommendation No. 198 on Employment Relationship, 2006 The recommendation calls upon the governments to – Review & adapt the scope of laws to guarantee effective protection of workers in an employment relationship Set up mechanism (or use an existing one) to monitor the labour markets & the organization of work to implement measures concerning employment relationships. List criteria for determination of employment relationship, irrespective of how the relationship is described in any contractual arrangement

Determination of Employment Relationship National law/regulations could include indicators of the existence of employment relationship – such as – the level of control the employer has over worker’s activities the level of control the employer has over worker’s activities whether the worker provides his/her own equipment whether the worker provides his/her own equipment whether the workers hires his/her own helpers whether the workers hires his/her own helpers the degree of financial risk taken by the workers the degree of financial risk taken by the workers the degree of responsibility for investment & management by the worker the degree of responsibility for investment & management by the worker workers opportunity for profit in the performance of his/her own tasks workers opportunity for profit in the performance of his/her own tasks

Employee v/s Self employed Under the control of other Supplies labour only Receives a fixed wage Cannot sub-contract the work Does not supply materials for the job (equipment?) Not exposed to personal financial risk in carrying out work No responsibility for investment & management No opportunity to profit Fixed hours of work, OT, etc What else? Owns own business Exposed to financial risk Responsibility for investment & management Opportunity to profit from sound management of work Control over what is done, when where & who does it Free to hire other people Can provide services to more than one person/business Provides materials, equipment, etc for the job Costs & agrees price for the job Control over hours of work What else?

Other measures to be taken Settlement of disputes – effective access Settlement of disputes – effective access Measures to ensure compliance: labour inspection services, collaboration with social security administration & tax authorities Measures to ensure compliance: labour inspection services, collaboration with social security administration & tax authorities Remove incentives to disguise an employment relationship Remove incentives to disguise an employment relationship Promote the role of collective bargaining & social dialogue as a means to finding solutions to work place problems Promote the role of collective bargaining & social dialogue as a means to finding solutions to work place problems Monitoring & implementation mechanism – & involvement of workers & employers organizations Monitoring & implementation mechanism – & involvement of workers & employers organizations

Law & disguised employment relationships in Transport Sector France: Case of a person who drove a taxi under a monthly contract which was automatically renewable, called a “contract for other lease of a vehicle equipped as a taxi”, and paid a sum described in the contract as “rent”. The Supreme Court held that this contract concealed a contract of employment, since the taxi driver was bound by numerous obligations concerning the use and maintenance of the vehicle and was in a situation of subordination. Venezuela: a woman cabin crew member with 3 years service with an airline was withdrawn because of pregnancy from the flight programmes and a training course with a view to promotion. She was not assigned new functions and was deprived of income as she only received a commission based on flights, and had not been declared for social security purposes. The company claimed that there was no employment relationship; rather it had signed a commercial contract with her in her capacity as a representative of a limited company. The Court of First Instance held that an employment relationship existed and ruled in favour of the worker.

Law & disguised employment relationships in Transport Sector Canada: labour law specifically defines “dependent contractors” as employees with rights to collective bargaining. The truck driver who owns her/his own truck but drives it exclusively or almost exclusively for one company is a good example of this. Another example is a fisherman who is party to an arrangement whereby s/he is entitled to part of the proceeds of a joint fishing venture with other persons. The National Automobile, Aerospace Transportation and General Workers’ Union of Canada (CAW) organizes owner-drivers of trucks and includes them in bargaining units. Source: ITF