technological development

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Over 40 million people around the world are trapped in conditions of modern slavery, according to research from the Walk Free Foundation and the International Labour Organization. The fight against modern slavery is fragmented. Governments, non-governmental organisations (NGOs) and law enforcement agencies are engaged in their own fights at various levels (local, regional, national, global) with little collaboration.

In increasingly globalised markets, there is growing regulatory and consumer pressure on businesses to eliminate the exploitative practices of modern slavery in their operations and global supply chains.

Businesses have the chance to lead the way in the growing global effort to eliminate the exploitative practices of modern slavery; they are uniquely positioned to educate the largest constituency—their employees and business partners. By taking action, businesses can meet increasing investor, shareholder and social expectations; manage legal, reputational, financial and operational risks; and demonstrate corporate leadership on an urgent human rights issue.

However, they cannot do it alone and, to be effective, businesses will need to go beyond mere compliance efforts centred on due diligence/disclosure and focus on transparency and collaboration with government and NGOs. Technological advancements are providing real and substantial opportunities for improvement.

Using technology for greater transparency

Governments and NGOs are starting to take advantage of technology to spread knowledge and tools for those in the private sector and communities to educate themselves and learn how they can take action.

For example, the U.S. Department of Labor has created two apps—Sweat & Toil and Comply Chain—that each have a different focus. Sweat & Toil is a resource companies can use in their risk assessments to identify whether goods used are produced with child or forced labour. It consolidates information on other countries’ legal and enforcement standards, among other things. Comply Chain creates a standard of set practices to reduce the likelihood of goods being produced with child or forced labour. It provides a blueprint for businesses to create or enhance a social compliance system.

NGOs like Stop the Traffik, a global organisation focused on prevention of modern slavery, has created a Center for Intelligence Led Prevention, in partnership with IBM, to collect, analyse and disseminate information about modern slavery routes and risks. With the dissemination of such information, the efforts in this fight can become less fragmented.

Likewise, for businesses to really make a difference as they embark—voluntarily or involuntarily—on responding to a new regulatory scheme, technological advancements will give them an opportunity to support their actions in working towards transparency and ethical supply chains. For example:

Worker voices – Utilising mobile platforms allowing two-way, real-time communication for workers throughout the supply chain.

Traceability of materials and supplies – Using blockchain to trace products along their journey from producer to consumer.

Supplier and worker engagement – Equip and use data analytics to monitor labour-related risks in real-time, creating more responsible global supply chains.

Risk assessments – Mining data (for example, from mobile phones, media reports and surveillance cameras) which can be analysed using artificial intelligence and machine learning to extract meaningful information and identify risks in the supply chain.

Employee engagement – Using internal communications tools to allow employees to engage and become educated, particularly in recruiting.

Technology can only be as good as the purpose for which it is used and how carefully the information acquired from it is leveraged. If effective tools are used to educate and learn from the different actors within the supply chain, there is opportunity for businesses to work with governments and NGOs to build and share knowledge.

The compliance framework

In addition, there is a growing body of international laws and norms requiring corporate reporting and due diligence on modern slavery and human rights issues.

These include the UK Modern Slavery Act, the French Corporate Duty of Vigilance Law, the Swiss Responsible Business Initiative, the U.S. Federal Acquisition Regulations, and the California Transparency in Supply Chains Act. Legislatures in Canada and Hong Kong are also currently considering modern slavery laws, alongside Australia’s proposed Modern Slavery Act and NSW’s Modern Slavery legislation.

The compliance steps for meeting legislative requirements will not be unfamiliar to businesses; the these steps will be much like actions taken for compliance with anti-bribery laws.

Between the growing global compliance framework, technology and the willingness of business to honestly review their operations, comes the potential for a new level of transparency and commitment, helping to build on efforts to fight modern slavery and more holistically bring this largely hidden crime to light.

We are already working with our clients to ensure they comply with their modern slavery reporting obligations – contact us if you would like to know more.

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The ways we work, the structure of our businesses and the economy continue to be transformed by emerging technologies and cultural shifts. Seyfarth Shaw’s annual survey of business leaders seeks to understand how they are coping with, and adapting to, the rapidly changing landscape.

From talent readiness to cybersecurity, the 2018 Future Enterprise Survey Results give a flavour for the top-of-mind issues facing our clients. Take a look at the Survey Results here and consider whether they resonate with you and the way your business is responding to current opportunities and challenges.

Our experience is that clients who accept the changing world and take calculated risks through opportunity driven leadership are gaining a competitive advantage – we recently discussed this in our blog Why “Future Proofing” Is A Myth.

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Automation is a game changer that is altering the industrial landscape. A Committee for Economic Development of Australia publication estimates that over the next 10 to 20 years, 40% of jobs in Australia have a high probability of being susceptible to computerisation and automation.

Smart businesses will approach the automation process from the front end and engage with their workforce in a manner that ensures the business is able to harness all of the productivity benefits from automation, without suffering the industrial dissention and dislocation which so often coincides with dramatic workplace change.

Planning and practical implementation is critical

McKinsey recently published “A CEO action plan for workplace automation”, highlighting the benefits of business harnessing automation processes within their workforces. However, it cautions the need for an appropriate plan of action.

From an industrial relations standpoint, preparing for automation sooner rather than later can provide a business with payoffs down the track.

Where the opportunity presents itself for a business to enter into a carefully tailored enterprise (or greenfields) agreement prior to implementing automation measures, such an opportunity should be seriously considered. If timed properly, this will minimise the impact on the business from workplace change, and maximise workplace flexibility to allow the business to easily transition, saving time, cost and mitigating the risk of workplace disputes arising.

Left to the last minute, an enterprise may face pitfalls in implementing technological change. For instance, should a round of enterprise bargaining be imminent, employees and their representatives will push for greater job security during bargaining through superior redundancy and retention type arrangements. These could slow change, and add cost and complexity. Late engagement and consultation may also create resentment and cause further disputes and delays.

Where workforce engagement occurs early, these issues may not be so prevalent, and a business can ensure that it has the appropriate flexibility mechanisms in place to easily transition. As reported in The Australian recently, NAB’s Andrew Thorburn reflects on the importance of planning for NAB to “retrain and redeploy” workers post-automation. Clearly, planning can deliver the best outcomes for all stakeholders.

Enterprise bargaining in the post-automation world

There are implications on an employer bargaining for a new enterprise agreement (or for a greenfields agreement over a new enterprise) that will cover the business post-automation.

For example, the ability to influence new roles that will be required from technological advances comes with the ability for an employer to:

  • effectively bargain for terms and conditions off a fresh slate as post-automation roles may result in coverage of employees with vastly different terms and conditions
  • use a different modern award (if any) as a base for terms and conditions
  • provide an employer with greater leverage in bargaining through dealing with a smaller, more specialised workforce
  • bargain in circumstances where the agreement’s coverage will dictate which union (if any) has a right to represent employees.

Of course, the need to engage workers with a different skill set may also provide a business with an opportunity for workers to grow in their careers, and present an environment in which cultural change might be effectively promoted and achieved. Viewed through this lens, technical change need not be seen as a negative from an employee relations perspective.

Implementation of process

‘Redundancy’ is the word that comes to most employees minds when they catch wind of an employer taking steps to automate elements of their work.

However, despite many claims made to the contrary, major technological change does not necessarily result in a workforce being decimated. Opportunities are inevitably presented from change for employees to upskill in order to fulfil different roles in the business (or elsewhere).

Unfortunately downsizing a workforce is, in a number of cases, a necessary step in achieving the full productivity benefits that are so attractive in implementing technological change. Again, early and effective planning can minimise forced job losses, and maximise opportunities to upskill.

Transparency and appropriate engagement with employees is critical during the process, as is implementing an appropriate consultation plan.

In a world where so many businesses are moving to automation, failure to take these steps may result in your business falling behind its competitors, change (and its benefits) being seriously delayed, or the often significant capital costs required blowing out.

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Social, technological and economic forces impacting the workplace will continue to pose challenges for employers, employees, unions, policy makers and regulators in 2018.

Disruption

In 2016 the CEDA reported that 40% of Australia’s workforce could be replaced by automation within the next 10 to 20 years. Of course, automation has been happening since the industrial revolution – but the nature, pace and scale of automation is now being fuelled by digital disruption. These changes are happening now, or their seeds are being sown in many a workplace.

The Government recently established the Senate Select Committee on the Future of Work and Workers. Expect its report in June.

Corporate accountability for workplace breaches

This is one for boardroom ‘risk buckets’. Expect to see increased activity from the Fair Work Ombudsman targeting holding companies and franchisors following the enactment of the Protecting Vulnerable Workers legislation in September 2017. These changes bring home accountability to holding companies and franchisors for certain workplace contraventions by their subsidiaries and franchisees. These changes take individual and corporate responsibility for workplace compliance to a new level.

Wage growth and bargaining

There are mixed views here with economists tipping a return to healthy wage growth. Low wage outcomes have been reflected in collective bargaining. Tight economic conditions have seen many an employer “bunker down” to avoid high wage outcomes – effectively acknowledging the medium to long term impact of high cost outcomes is not worth the short term expediency of buying workplace peace. More than ever, collective bargaining and “workplace strategy” is grabbing the attention of the C-Suite, given their outcomes significantly impact the bottom-line and with compounding effect.

In the area of major project infrastructure, labour shortages will intensify in 2018. This will see a return to high cost “greenfield” agreements to incentivise project stability. Expect higher than average wage outcomes for skilled and semi-skilled labour, at least in some sectors.

Sexual harassment claims

In the wake of high-profile sexual harassment allegations against prominent individuals both here and abroad, expect to see an increase in the number of claims made in 2018. The tolerance for sexual harassment has never been lower and incentive to bring a claim has never been higher.

CFMEU and MUA merger

Make no mistake – the proposed merger of the CFMEU and MUA will be high impact. The construction and mining sectors’ reliance on port services bears this out. In circumstances where massive shipments of infrastructure hit our shores for major project construction, the nationwide impact of greater CFMEU-style control will be tangible.

Litigation funded union claims

Expect to see large union claims backed by litigation funders. These funders, typically from the UK, bankroll large scale litigation punting on a profit from the outcome. For unions, such financial backing facilitates litigation with the aim of extracting large financial settlements. This will encourage claims on a scale rarely seen in Australia, with medium and large employers with “deep pockets” in their sights.

Modern slavery and supply chain reporting

Another issue for the boardroom. Globally, there is a growing commitment to eliminate the exploitative practices of modern slavery which includes forced and child labour. Corporates are reviewing their respective labour supply chains lest they are exposed to allegations of being complicit in slavery. Details can be found in A Modern Slavery Act for Australia.

Change of government?

Federal elections inevitably shine a spotlight on the workplace. Expect the same if an election is held in 2018. The ALP has already expressed its concerns with the current workplace regime – despite it being largely a product of its own making. The “tilt of bargaining power away from workers and to employers has gone too far” according to Shadow Minister for Workplace Relations Brendan O’Connor.

Many an employer would beg to differ. Workplace laws have moved like a pendulum with changes to government in Australia, albeit remaining relatively static under the Abbott /Turnbull Governments. But it seems the pendulum will continue in its current trajectory under Labor. The Government will seek to remain a small target on workplace relations in 2018 as the recent Cabinet changes reflect. For employers, the regulatory environment will only get tougher should we see a Labor Federal Government.

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The impact of technology on the workplace is undeniable, and its effect on how employees will communicate in the workplace of the future cannot be overstated.

Impacts are emerging in workplaces, globally. We thought we would share the thought leadership of our colleague, Karla Grossenbacher, a partner in our Washington, D.C. team. It seems to us that her insights on these issues are equally applicable to Australian workplaces and we hope you find them of value.

As Generation Y begins to enter the workforce, many believe their preference for using texts instead of email to communicate will cause a fundamental shift in the workplace of the future, in which texting will replace email as the primary method of electronic communication. Employers need to prepare now for how they will be able to access and monitor workplace texts in the same way they do email, and preserve those texts as necessary to fulfill any legal obligations they have to preserve workplace communications.

Texting is becoming more common in the workplace. Most employees use company-owned or personal phones to communicate in the workplace to some degree, and with phones comes texting. Even if email is the sanctioned form of communication in the workplace, employees will text. Some employers may not even be aware their employees are texting with each other or to what extent. Other employers may be aware and actually permit texting in the workplace or simply tolerate it because they feel they cannot prevent it from happening.

Yet, if employers allow employees to text in the workplace, they will need to think about how they will access, view and preserve employee texts in the same manner that they do with emails. Lawyers in employment cases are beginning to demand that text messages be produced along with emails during discovery. If the texts are made from company phones, the basis for such a request would seem to be well-founded assuming the substance of the texts is relevant to the claims and defences in the case.

However, when the texts are sent or received on personal devices used by employees in the workplace, the issue becomes more complicated. In such cases, employers typically argue that they are not required to produce texts from their employees’ personal devices because such devices are not within the employer’s custody or control. But if employees are using personal devices at work pursuant to a Bring Your Own Device program, the argument that such devices are not under the employer’s custody or control is undercut. Often BYOD policies allow for the employers to take custody of the employee’s personal device for various legitimate business purposes, which would include responding to discovery requests in litigation.  Continue Reading Are your employees texting? Risks to employers taking workplace communications offline

SurveillanceTechnological advances in monitoring and surveillance call to mind the lyrics of The Police’s widely misinterpreted hit, Every Breath You Take. But how will this emerging new frontier play out in workplaces and work practices? As technology continues to accelerate, many employers are starting to think about how to harness these developments in order to achieve greater workplace productivity and consistent health and safety outcomes.

When we think of workplace surveillance, it’s easy to get stuck thinking about the traditional measures that have been widely used for the last 10 years or so – email monitoring, CCTV and the occasional dash-board camera. These methods have historically been used for safety, security and compliance. But as workplaces become more remote and isolated and there are lower numbers of employees on any one site, organisations are looking beyond traditional methods and embracing the latest monitoring technology – both to deal with safety and security, but also as a direct way of measuring employee productivity. Continue Reading Every breath you take, every move you make – the future of measuring workplace productivity

Video killed the radio star…or did it?Radio star

In its most recent research paper analysing the effects and possible responses to digital disruption, the Productivity Commission observes that with each wave of change “speculation about the effects of technologies often suffers from extreme optimism or pessimism”.

While perhaps raising more questions than it answers, the Productivity Commission focuses on the potential of digital technologies to deliver economic benefits if regulated appropriately. Continue Reading Back to the future: The digital disruption debate

In the 6 January edition of the Australian Financial Review ANZ Bank CEO Mike Smith described the effects of digitisation as being “as significant as the changes imposed by the industrial revolution”.

This comment is supported by a deep and diverse data set and important research from organisations such as McKinsey & Company and we have previously written about the Business Council of Australia’s discussion paper from last year.  Continue Reading The new industrial revolution – digitisation in the workplace