A NEW LABOUR CONTRACT FOR REMOTE AND GLOBALLY DISTRIBUTED JOBS
INTRODUCTION
Technological evolution and changing work patterns are generating new needs and collective interests. This document aims at analysing new jobs, their features, regulatory and institutional constraints, the necessary protections for workers, the instruments to guarantee them and the actions to be taken.
The purpose, starting from a a new labour contract, more adherent to the operational needs of new jobs, is to implement national and international policy level actions aimed at:
1) Build new digital tools for a better functioning of the labour market (see for example the Digital Work City project)
2) Identify the regulatory limits that do not allow the diffusion and proper functioning of the market for new jobs and the free movement of talents
3) Favour an extensive cooperation among national states to allow the opening, modification, and closing of employment contracts, the payment of welfare and training contributions, the payment of taxes for companies and the portability of protections as a consequence of the personal choices of workers (geographical mobility, family status, professional and entrepreneurial choices, etc.)
4) Promoting access for workers to universal training tools, on a global or national scale, fighting fragmentation and barriers
5) Facilitate access to high skilled workers for organisations
It would also be necessary to identify best practices at the level of companies, nation states and institutions in guaranteeing economic freedom, concrete rights, continuous training and engagement of workers, quality and quantity of employment.
BACKGROUND
The world of work is shaken by strong changes, accelerated by the pandemic crisis.
There is a strong demand of autonomy, qualifications, freedom and actionable opportunities for workers. Dual-income families, more women and different generations in the labour market, global circulation of talents and the growth of start-ups are crucial phenomena for the development of citizens, the sustainability of welfare systems and the balance of society.
These phenomena also structurally change the dynamics of labour market participation.
At the same time, the demand for flexibility, access to cutting edge competencies and innovation by companies, in order to compete in global markets, and management of a more independent and globally distributed workforce, is increasing. The evolution of technology, which is becoming faster and more pervasive, requires constant updating in the skills of workers.
NEW JOBS AMID REGULATORY GAPS AND INADEQUATE TOOLS
These complex phenomena translate into new work experiences and relationships, in some cases highly qualified, but different from the traditional forms of regulation of labour relations, creating regulatory gaps and enforcement difficulties.
In this new context, the current national collective agreements, the forms of regulation of labour relations and the international public institutions do not always grasp the novelty of this phenomenon and allow for a simple organisation of work that meets the needs of companies in training, supporting and fulfilling large sections of the working-age population.
A new system for regulating digital work and an innovative employment contract would therefore serve to fill these gaps and at the same time meet the demands mentioned above. It is therefore not a question of regulating old types of work impacted by technology, which would merit further consideration, but of encouraging and regulating new jobs by making them more accessible, widespread and sustainable.
DEFINITION OF TECHNOLOGY FOR WORK
It is widely believed that the spread of technology will bring about a major change in the way work is organised and practised. However, technology for work is not just about software or ICT, but is the result of a complex intersection between technology, labour law, internal organisation (roles, hierarchy, regulations), public services and practices.
Changing only software tools while keeping the other elements stable does not allow for a balanced transition to the new forms of work, just as updating legislation with a negative bias and a poor knowledge of technology evolution.
In both cases there is risk of failing to deliver positive economic impacts on productivity, inclusion and innovation.
Technological change in work does not only concern software or digital platforms but also the organisational, regulatory and commercial structures in which work is practiced. For this reason, dealing with labour contract and regulatory systems that revolves around it is the first step to usefully direct the impact of technology on work. This action is fundamental both to properly direct change in markets where it occurs spontaneously (US. UK), but also to stimulate change where it is slow to arrive ( EU) . This task is much more complex but even more important in labour highly regulated markets where the responsibility for the outcome in terms of quantity and quality of employment is attributable to the close relationship between regulatory, organisational, institutional and technological frameworks.
RELATIONS BETWEEN CONTRACT AND SOCIETY
The discussion on the digital transition at work and on employment contracts goes far beyond the dimension of companies, unions or states. It crosses economic, psychological, institutional, social and collective dimensions to an increasingly global extent.
The employment contract, within a system of institutions that qualify it, represents a sort of hinge that welds together technology, organisational practices, institutions, companies, workers, society, work environments and customers.
GOVERNING THE TRANSITION IN A COORDINATED WAY
Digital work enhances and defines new working activities that deserve dedicated regulation. In order to affect change, it is therefore necessary to intervene on several dimensions in a coordinated manner. The great change in the regulation of employment relations is to move from a system centred on the stable relationship between individual workers and companies to one in which workers operate in the global labour market in connection with several companies, of different geographies, collaborating with more co workers, retaining the possibility of guiding their own career path.
SIMPLIFICATION TO CREATE VALUE
The first step is to simplify the activation, modification and management of employment contracts, and the related fulfilments, in coincidence with the very rapid variation of employment relationships and personal status of individuals (see workers residing in different countries). This requires the collaboration of national and supra-national institutions in order to build a single a tool in which various types of jobs can be covered, correctly isolating them from other types, making it possible to assess the costs and choices necessary in creating the new jobs extremely easy, fast and predictable.
PERIMETER OF NEW JOBS
The perimeter of application is crucial as new forms of work are not homogeneously spread and it would not make sense to apply a new model to traditional jobs.
The contract must therefore intercept, regulate and stimulate a new, autonomous, collaborative, remote type of work, at the same time offering protection and stability to those who work. There may also be companies in which these forms of work are already more wide spread (e.g. start-ups) or sectors of activity (digital) or periods in the workers life (e.g those with family obligations). This obviously opens up to hybrid situations in which companies have to apply different types of contracts, just as the employees may change and have several ones (even simultaneously) during their working life.
BETWEEN AUTONOMY AND SUBORDINATION
In this new types of jobs seem that some of the general protections provided in the employee’s status, as periodical salary, contributions for training, social security, sickness and maternity leave, should be merged with the characteristics of freelance workers, such as free adherence to projects, multi-commissioning, freedom from hierarchical constraints, absence of employer’s authority or freedom in establishing the price of single assignments.
The integration of these two models into a single instrument presents considerable regulatory and institutional challenges. The path of hybridisation is therefore complex and potentially subjected to changes in evaluation. Therefore, pragmatic choices and experiments will be needed in order to regulate work in a solid way waiting for the evolution and contribution required from public institutions.
RETRIBUTION
A first absolutely relevant element is certainly related to the worker’s remuneration. Today, work with the employee model is mainly paid on a hourly/daily basis while in the self-employed model is paid on results based agreements between the employers and workers. Since these new jobs seem to take elements of employee model and others from freelancing, it is necessary to recompose a remuneration practice that integrates some parts as periodicity of payment, automaticity, payment of contributions, minimum salary and other parts like remuneration according to activities/results, possibility of freely managing holidays and absences, also using adeguate support tools (e.g. structured systems of performance evaluation and objectivisation of activities).
Combining pay practices with new organisational models we can achieve several goals: allowing employees to earn more money, self-employed people to be more involved and secure, thanks to a stable contract and quality team working, employers to have a larger talent pool, more flexibility in choices and fairness in managing different groups of workers. Finally, for society, there is more production of quality jobs.
Finally, limits to the notion of work should be considered, “downwards”, where practices have a preparatory purpose to work (e.g. uploading data on social networks or exchange of preliminary information or apprenticeships) or, upwards, where the “entrepreneurial” results of activities are mentioned (work for company shares or long-term result objectives).
THE RELATIONSHIP BETWEEN REMUNERATION AND PERSONAL ELEMENTS
It is clear that the issue of remuneration is also closely linked to different elements , for example the residence of the workers, family status, gender, personal choices. It creates a complexity for both the employer and the employee, who need to be able to adjust their relationship quickly according to the needs of the company and the individuals. The key is therefore to be able to fluctuate the worker’s salary, and the consequent payment of contributions, in a simple and manageable way based on objective assessment tools and payroll system, while maintaining a minimum wage and the possibility of rapid reskilling. Secondly, the contractual element must not build barriers between different kind of workers but become a level playing field for each type of person, regardless of their contract type, geography or status.
TRAINING AND WORKING TOOLS
The rapid, continuous and somewhat unpredictable change of required skills and working tools is an established reality. Work performance is constantly influenced by the choices that the individual workers or the organisations make in terms of training. The idea is therefore to build a dynamic training model throughout the working life and not only at the entry into the labour market.
There are at least two conceptually distinguished types of training to be considered: one required by companies to practice those activities for which the worker is paid and one needed by the workers to maintain and evolve their skills in view of future assignments and personal development. The company’s training responds to the traditional model and is paid for and organised by companies, whereas further training requires an alternative budget and services that workers can use autonomously.
Since work cycles are not always dependent on company governance, it is clear that in some ways the workers of the future will be much more responsible for their training,
Also it is necessary to establish hybrid practices between company training (centrally organised) and the training of the self-employed. Just as for companies it no longer makes sense to manage all training from the centre, it can be difficult for the self-employed to access the best training contents or learning groups at reasonable costs. (also considering the fragmentation of the training offer). This may become a collective problem if large groups of workers struggle to find adequate training tools for their professional updating needs.
WORKING TOOLS AND DISCONNECTION
The same applies to working tools. One of the novelties in the new forms of work is the freedom of workers about working methods and tools, including the devices to be used and the places of work (except in special cases). While in traditional forms of work it would seem to make more sense for the employer to pay and choose the tools for their employees working from home, this is not always the case in new jobs, as these instruments shall be used at the same time for different employers.
A final element that changes radically between new and traditional forms of work is the right to disconnect. If there are no fixed hours and there is workers autonomy over time and place, disconnection loses its meaning. In other words, if the right to autonomy is guaranteed there is no need for the right to disconnection.
WELFARE SEPARATED FROM COMPANIES
Previously we mentioned how welfare is a necessary element for workers as companies may buy some welfare services for their employees as flexible benefits. Institutions, in this new context, should instead analyse and understand the new needs of workers and respond to them through correct people caring policies. In the presence of hybrid, overlapping and mobile employment relationships, people caring policies must be managed primarily by public institutions, not by employers. Companies are still one of the elements of welfare, but won’t be so important to the workers’s life as they are at present.
CONCLUSION
In the countries with freedom based labour law policies, the legislator has to understand if these new jobs have the same protections as traditional jobs or if they need more adequate tools and safeguards, and which ones.
In the countries with more rigid and prescriptive labour legislative systems, it is necessary to understand if the regulatory system somehow blocks the development of this new jobs, especially in the cases where the labour indicators show low employment , hard finding some cutting edge competences and difficulties for some social groups, such as young people and women.
The aim is to avoid a Far West of unequal opportunities between individuals, states and companies that are able to position themselves in this new global flow of skills, opportunities and wealth and those that are unable to do so.
The new jobs are already among us and they are bound to grow. Pretending they do not exist would be a serious mistake for companies, states and people. An error that would cost so much in the near future.
Nicolò Boggian
FOUNDER AND CEO WHITELIBRA
