World Employment Report 2001

Negotiating the new economy: The effect of ICT on industrial relations

4. Industrial relations: Business as usual?

What conclusions can we draw from this survey of the telecoms industry? Perhaps surprisingly, the rapid process of change which the sector has been going through in recent years does not appear to have led to a similarly radical transformation of traditional labour relations – or at least if we exclude from the picture the new entrants to the industry in the United States. In telecoms, it would seem, there is considerable life yet for old-style industrial relations.

Are there specific reasons why this could be the case? Perhaps the high level of unionisation and the long tradition of paternalistic labour relations in some state-run monopolies are still strong factors at work. Furthermore, despite liberalisation, the big national telecoms companies - firms such as Deutsche Telekom, Telecom Italia, France Télécom and NTT - continue to dominate their home markets. It could be argued that, in reality, little has actually changed and that it is too early to make any meaningful assessment.

In a moment, therefore, we need to bring the focus back to the broader picture, to ask if there are more general signs that industrial relations institutions are adapting to the new economy.

4.1 Global collective agreements and institutional reform

We remain briefly, however, with the telecoms sector. Early in 2000, what can be described as the first global collective agreement in the ICT industries was successfully negotiated between the international telecoms company Telefónica and UNI, Union Network International. The agreement originated in negotiations with the two union federations in Telefónica’s home country of Spain, but was broadened so that the eventual agreement covers Telefónica’s employees throughout the world, about 120,000 in all. Both sides to the agreement commit themselves to accepting five core principles:

  • Compliance with the ILO conventions on freedom of association and trade union rights.
  • Recognition of the right to organise and recognition of the right of trade unions to represent and negotiate on behalf of the workers.
  • Strict respect of standards applicable to the environment, security, health and safety at the workplace.
  • An agreement to provide and furnish a high-quality service that is both affordable and universally accessible.
  • An agreement to provide a high level long-term investment in local companies in order to develop and expand services and employment.

Both the General Secretary of UNI Philip Jennings (who talked of a "great breakthrough") and the then President of Telefónica Juan Villalonga emphasised the significance of the agreement. Villalonga told an international union conference: "We need the unions and they need the company, since in the face of something… that is going to change or already is changing the ways we inter-relate, if we are able to anticipate the direction to take and run a fast race it will be to the benefit of all."25

UNI, which was established by merger on 1st January 2000, is itself of interest, since the merger can be seen to be a consequence of changes brought about by ICT. The new trade union body brought together four international trade secretariats, FIET (covering private sector employees), Communications International (telecoms and postal workers), the International Graphical Federation and the Media and Entertainment International. The four agreed to merge in large part because of an understanding that technology was leading to convergence between these formerly distinct sectors. (A similar rationale is being followed in Germany where five unions hope to come together in 2001 to form a new union ver.di).

One example of UNI’s desire to address the issues raised by globalisation in a practical way is its "passport" scheme. This is designed for professionals, particularly those in the IT sector, whose work takes them abroad. The "passport", in reality a card the size of a credit card, gives members of a UNI affiliate the right to request services from the union in the country where they are working.

At the apex of the international union structures, the International Confederation of Free Trade Unions (ICFTU) is itself reassessing its role. The need for a "millennium review" was debated in detail at the ICFTU’s World Congress in Durban in April 2000. The review is intended, in the words of ICFTU’s General Secretary Bill Jordan, to be "the most far-reaching rethink ever carried out since the birth of international trade unionism’.26

4.2 Vocational training and lifelong learning

Changes in working practices require new skills from workers, and the issue of vocational training has been high on the agenda of both employers associations and trade unions.

In South Africa, for example, the Information Systems (IT), Electronics and Telecommunications Technologies sector education and training authority (ISETT SETA) was established in March 2000. ISETT SETA is one of a number of bodies created under the government’s Skills Development Act of 1998. It is a tripartite initiative, with members of the ISETT SETA Authority drawn from employers associations (three representatives from the IT and electronics sector), trade unions (three representatives from unions in the sector) and the government (three appointees). Three further Authority members represent special interest groups. The cost of vocational training in South Africa is met from an employers’ payroll levy (currently 0.5%, due to rise to 1.5%).27

In Singapore, the National Trades Union Congress (NTUC) has participated in major training initiatives, including the Skills Redevelopment Programme launched in 1996 (in which to date about 24,000 workers have participated) and the Critical Enabling Skills Training (CREST) programme (about 30,000 trainees, with another 100,000 workers due to participate in the forthcoming year). The NTUC’s education training fund subsidises union members where employers cannot or will not pay for staff training.28 The NTUC’s skills development department has been given the surrogate status as an employer body, to enable it to apply for public funds for this work.

In Germany, the tripartitite Alliance for Jobs, Training and Competitiveness (Bündnis für Arbeit) was established in December 1998. It includes structures for issue-related working groups as well as regular high-level conferences between the social partners. At the July 2000 conference, it was agreed to aim for 60,000 training places in IT and the media in the years up to 2003.29 A similar tripartite initiative in Ireland, Partnership 2000, was negotiated in 1997 and aims to encourage life-long learning in the workplace.30

In the USA, a partnership between AT&T and the union Communications Workers of America (CWA) has been in place since as long ago as 1986 when a joint body, Alliance for Employee Growth and Development, was established through the collective bargaining process. The Alliance is a nonprofit organisation with representatives from both trade union and company sides, which offers distance learning and on-site training. The Alliance claims that 125,000 active and displaced workers have participated in training activities in the years since its formation.31

4.3 Occupational safety and health

Compared with the industrial age, the workplaces of the information age can seem very "clean" environments.

However, trade unions have suggested that such a view can be misleading. The introduction of computer terminals and PCs have raised considerable concerns over keyboard-induced musculo-skeletal disorders (such as carpal tunnel syndrome and repetitive strain injury), which some have described as almost a white-collar epidemic.

Perhaps the most innovative example of an international initiative in this area is the environmental and ergonomic labelling scheme for computer hardware developed by the Swedish confederation of professional employees, TCO. Since the end of the 1980s TCO has been involved in influencing the development of IT equipment in what it describes as a more user-friendly direction. Its TCO 92 and TCO 95 quality standards were influential in the IT industry far beyond the borders of Sweden. TCO Development is currently launching its third quality mark, TCO99. This covers portable computers and flat panel visual display units, and includes requirements for maximum electrical and magnetic emissions, energy saving features, electrical safety and keyboard usability.

Two examples from the new economy

  1. Call centres

The very rapid growth of call centres has been a striking feature of work life in many developed countries in recent years. Their development has changed the nature of white-collar work for the hundreds of thousands of people who spend their working days handling telephone calls in these purpose-built units. Call centres have had a profound effect on the structuring of some industries, including the banking, travel and telecoms sectors.

Call centres are the first distinctly new form of work organisation to have emerged from the information and communication technology revolution. Yet there is a curious paradox here, for call centres – far from representing the new flexibility in working space and time promised in the information age – carry forward into the new realm of white-collar work the traditional assembly line working model associated with Henry Ford and Taylorism.

Call centre technology can increase productivity in telephone call handling to an often astonishing degree. Automated call distribution, computer-telephony integration (such as "screen popping" of customer information to agents’ screens) and the use of standard scripts by staff mean that the time taken to deal with calls, and free time between calls, can be pared to the bare minimum. What was once a day’s work can be undertaken in an hour, according to one call centre manager.32

This technology-induced efficiency requires the human agents to submit to a highly controlled work regime. Some have described call centres as the electronic sweatshops of the twenty-first century. The degree of surveillance necessary has also invited unfavourable comparisons; one call centre worker compared his work with that of Roman slave ships: "You feel like you are on a galley boat, being watched, answering calls every thirty seconds, monitored and told off…"33

As the International Confederation of Free Trade Unions (ICFTU) has pointed out, the nature of call centre working should make it amenable to traditional industrial relations: "The call centres are the modern version of mass production, usually fertile ground for the trade unions. Centres often employ several hundred operators in vast premises."34 However, the experience to date suggests that, in some countries at least, trade unions have found difficulties in organising and representing call centre staff.

The case of Citibank’s call centre in Duisburg, Germany, is perhaps emblematic. The call centre, which employs about 800 workers, was established by the US-based parent company outside the collective agreements for the banking sector. Staff were employed on a new salary structure, which abolished the thirteenth month holiday pay, traditionally a feature of German pay agreements, and which necessitated changed arrangements for working hours and annual leave. The non-recognition of the German banking unions HBV and DAG has led to an ongoing dispute, which was heightened by union accusations that the opening of the Duisburg centre had involved the closure of several other centres and the loss of over a thousand workers. The dispute included limited strike action in 1998 and an attempted boycott of the company.

Non-recognition has also been an issue in the banking sector in Ireland, where a number of call centres have been established outside the traditional industrial relations agreements in the sector. One example was the AIB 24 Hour Banking centre in Naas near Dublin, where the company did not initially recognise the Irish Bank Officials Association. In its attempts to organise and retain the workers, the IBOA offered to waive their membership subscriptions. Eventually a formal partnership agreement between the company and union was negotiated and the IBOA received recognition at Naas in February 2000. The union is now turning its attention to other non-unionised direct banking centres in Ireland.35

In other countries, however, call centres have been subject to national collective agreements. In Spain, a two year national agreement covering workers engaged in telemarketing activities of all kinds was negotiated between employers organisations and the union federations UGT and CC.OO. in 1998.36

Call centres originated in the United States, and according to a recent UNI report American management techniques have been exported to the rest of the world along with the technology. The report identified a number of characteristics of call centres, which it argued mitigated against traditional industrial relations. They included:

  • An "informal" work culture and management style, which does not emphasis differences of status or work hierarchy.
  • Very flat management structures, with only one or two layers of management.
  • Very restricted opportunities for staff to talk to each other informally.
  • Very high turnover of staff.
  • High percentage of women workers; high percentage of young workers.
  • A "green field" approach to the call centre operation, which may extend to a deliberate attempt to exclude trade unions. Non-adherence to existing collective agreements which apply to other employees of the same company.
  • The high use of agency staff by some employers, so that call centre staff may not be directly employed by the parent company.37

In a number of countries, trade unions have engaged in organising campaigns directly targeted at call centre workers. In New Zealand, for example, the financial sector union FinSec promotes itself as "Your call centre union" and has a dedicated web site for these workers. In the Netherlands, FNV Bondgenoten has a series of web pages of information on call centre working, available both to members and non-members. In Australia, trade unions have invited unhappy call centre staff to ring a hotline to report on poor practices in their places of work.38 Perhaps the most ambitious initiative was an international Call Centre Action Day, organised for 4th November 1999 jointly by FIET and Communications International (now both merged into UNI). Standard leaflets were made available on the Internet, and use of these leaflets was reported from a number of countries, including Australia, Sweden, UK, Germany, France and Ireland.

A typical call centre will be organised into a series of teams, each with a team leader. Recent years have seen a trend in many call centres away from straightforward servicing of customer enquiries towards a more sales-orientated approach, seeking to add value to calls made and received, and competition between teams may take place over call handling performance and particularly sales. Prominently displayed sales targets are a feature of many call centres. An element of American-style razzmatazz may also be introduced, particularly in anglo-saxon countries. For example: "a 12 foot [4 metre] electronic totem pole in the middle of the trading floor [is set off] when the combined sales force meets its monthly target: inconceivably apocalyptic roars, shrieks, whoops, yells and the eruption of a flashing blue light, ex-police, on the top of the tower…"39

Trade unions have been concerned to ensure that performance-related pay tied to sales (either made by an individual or their team) does not result in lower basic wages. One example of a successful agreement over bonus payments is that which was struck in Denmark between Codan and the insurance union DFL.40

From a management point of view, the task of running a successful call centre can be made more difficult by the high levels of staff turnover. So-called "churn" rates of 30%, 40% or even 50% a year are a feature of the industry in many countries, a symptom of the low wages normally paid, of the stress and boredom of the work but also of the fact, as one French worker told his trade union, that call centre working is not really a proper job: "pas vraiment un métier".41 There is some evidence that both employers and trade unions are increasingly choosing to collaborate to develop longer-term strategies for employment. In New Zealand, for example, the Electrotechnology Industry Training Organisation is working with employers and the union FinSec to develop a National Certificate in Call Centre Operation. In Holland, a number of call centre employers have invited FNV Bondgenoten to engage in collective bargaining, even in centres where the union has no history of recruitment or organising.

In the longer term, however, there is a question mark over the future development of call centres, with some analysts suggesting a slow down in growth.42 Technological innovations such as touch-tone phones and interactive voice response, as well as the Internet, allow customers to obtain information and undertake transactions without human mediation. The call centre industry is now looking to move towards broader "customer relationship centres", enabled not only for telephone call handling but also for email, web and digital TV customer contact.

Increasingly, call centres are operating across national borders. International call handling (where calls are routed abroad and automatically answered in the appropriate language for the caller) have long been a feature of the European scene, with both Ireland and Britain major centres. In 1999, for example, Air France located its European reservations centre in London, in a move which led to criticism by the union federation CGT that the company was side-stepping tighter labour controls in France.43

However, there are also signs of a migration of call centre work from the developed to the developing world. One example is GE Capital, which set up a wholly owned subsidiary GE Capital International Services (GECIS) in 1996, to offer transaction processing and call centre services (both for its own company and for non-GE companies worldwide) from a centre near Delhi, India. GE Capital recently announced that some credit card operations would move from Britain to Delhi.44

Finally, some analysts have suggested a growth in the number of so-called virtual call centres, where instead of working in large centralised units call centre agents are located in their own homes.45 The advantages for employers, it is suggested, include greater flexibility in establishing work rosters, greater staff retention, a reduction in absenteeism and higher productivity. For unions, however, the use of home-based teleworkers in this way raises some significant additional issues and challenges. This leads us conveniently on to explore further the issues raised by telework.

  1. Telework

For almost twenty years, interest in new ways of working made possible by ICT has been focused to a large extent on the somewhat vague concept of telework. The issue has received considerable attention from academics, from trade unions, from policy-makers and from international organisations such as the ILO46 and the European Commission.47

Indeed, in the European context, telework was given something approaching talismanic status in the influential Bangemann report of 1994 "Europe and the Information Society" for its role in creating "more jobs, new jobs, for a mobile society". More recently, the proportion of the workforce engaged in telework has been stated to be one of the indicators to be used in assessing the success of the European Union’s current eEurope initiative.48

Telework has also been specifically identified by the European Commission in its current consultations with the social partners in Europe on modernising and improving employment relations as one of two areas to receive specific attention (the other is that of quasi-employees without formal employee status). In a first stage consultation undertaken in mid- 2000, the Commission identified a number of issues, including:

  • Definition of telework.
  • Arrangements for the introduction of telework.
  • Suitable of job for teleworking, and selection of teleworkers.
  • Arrangements regarding the home office.
  • Rules and procedures for communications, including consultation.
  • Training requirements.
  • Company security policies.
  • Terms and conditions of employment (working hours, pay and benefits, trade union rights).
  • Monitoring and review of telework.49

The Commission suggests that "framework provisions" on telework be developed at EU level, for implementation in individual member states. The Commission has previously pondered the case for a formal European directive on the issue.

Despite this high-level interest, however, telework can be a surprisingly slippery concept to pin down. It is perhaps not surprising that the first item on the European Commission’s consultation list for the social partners is an attempt to find an agreed definition.

In earlier years telework (and the closely analogous term telecommuting, used particularly in north America) tended to be restricted to home-based working, made possible by IT and telecommunications links. In more recent years, however, the definition has been stretched to include those working remotely in neighbourhood telecentres or community telecottages, and mobile workers (for example, those who operate from their cars or from touch-down office facilities). For some, telework can stretch still further to include jobs relocated to remote back offices, offshore data processing centres and even call centres.50

The central idea behind telework, however, is based on two features: that of work which has been relocated, because of the opportunities inherent in technology. Taking these two points, the UK Trades Union Congress has come up with a definition of telework simply as "distance working facilitated by information and communication technologies".51

Given problems of definition, it is not surprising if it is difficult to find definitive figures for the numbers of people teleworking. The only country believed to be collecting statistics formally is the United Kingdom, which uses both a "teleworker homeworker" and "occasional teleworker" definition of what constitutes teleworking in its Labour Force Survey. Using the broader definition, about 5.5% of the total British workforce (about 1.5 million people) were teleworking in early 2000.52

The situation in other European countries was investigated in research undertaken in 1999 for a European Union funded project ECaTT. This research suggested that there were then about six million people regularly teleworking in the fifteen EU countries. This figure included those regularly working a day or more per week away from the office, at home or on the road, and making use of computers and online connections. (This is a looser definition than that used in the UK survey). The number rose to about nine million if more occasional teleworking was also taken into account.

Table 7: Teleworkers in selected countries


Home-based teleworkers

Regular teleworking (incl. home-based)

Regular and occasional teleworking

% of labour force



















































Source: empirica for ECaTT53

Estimated figures for teleworking in the USA (15.7 million) and Japan (2.09 million) were included in a European Commission report published in 1999, though it is not clear how rigorous was the methodology employed in either case. Regrettably, it has not been possible to find statistics for telework for other parts of the world.54

More useful than absolute figures, perhaps, may be indicators which suggest that telework is increasing as a form of work. The ECaTT findings (above) could be compared with similar research findings undertaken in five EU countries in 1994. Such a comparison suggests an annual telework growth rate over the period of 34% in Germany, 29% in Italy, 11% in Spain, 10% in France and 8% in the UK.55 The UK’s official statistics show a 19% increase between early 1999 and early 2000 in number of individuals occasionally teleworking.

Initial trade union concerns that telework might replicate the worst sweatshop conditions found in traditional homeworking have tended to be modified more recently, with a recognition that the flexibility inherent in telework may benefit both employees and employers. This approach is predicated, however, on the introduction of telework being properly negotiated and monitored. The resolution passed by FIET (now part of UNI) at its World Congress in 1995 still sums up many unions’ position:

Telework may be, on the one hand, a tool for employers to move work to geographical areas where working conditions, salaries and collective bargaining rights are the poorest.
But on the other hand telework, where regulated through a negotiated framework, may be an interesting alternative for employees in certain phases of their lives, eg as an attractive alternative to physical mobility due to structural changes.56

The need to develop an appropriate "negotiated framework" for telework has attracted the attention of trade unions internationally. In South Africa, the Congress of South African Trade Unions (COSATU) has identified teleworkers and homeworkers as contingent workers who may not be adequately covered under the country’s current legal framework, the Labour Relations Act and the Basic Conditions of Employment Act.57

In Australia, an early collective agreement between the main telecoms operator Telstra and the Communication Workers Union of Australia was agreed in 1994. Also in 1994 a Home Based Work agreement was negotiated between the Australian federal government and the Community & Public Sector Union, though in practice few civil servants have taken advantage of this arrangement.

However it is perhaps not surprising if most of the examples of telework collective agreements have come from within Europe. National sectoral agreements on telework have been agreed in Italy for the commerce and banking sectors and in Austria for the industrial sector and the oil industry. In France the telecoms sectoral agreement signed in June 2000 also deals inter alia with telework.

Model telework agreements have been developed by unions in Austria (GPA), Sweden (TCO) and Denmark (HK). A raft of company-wide agreements have also been agreed; they include, in Germany, IBM and Deutsche Telekom, in Austria IBM, in Italy Telecom Italia, in Belgium SITEL, in the UK the Co-operative Bank and in Sweden Siemens Nixdorf. Public sector telework agreements have also been made in a number of European countries.58

The German post and telecoms union Deutsche Postgewerkschaft (DPG) has been responsible for establishing an innovative telework helpline service, OnForTe (Online Forum Telearbeit). OnForTe, funded from the German federal government, Deutsche Telekom and the union itself, began operating in December 1997 from a small call centre in Regensburg. Web-based access to advice was subsequently added, and two other unions HBV and IG Medien also became involved.

The service is designed to offer the public, including non union members, the self-employed and works council members, an access point for information about all aspects of telework. Simple queries are dealt with by the call centre agents, with more specialist enquiries passed to a second tier of advisers who can assist on issues such as legal rights, telework contractual agreements and problems of self-employment.59

It is also worth noting that the DPG has introduced telework for its own employees, under a collective agreement signed in June 2000 between the union and its staff representatives. The main aim of telework is to improve service to union members, to enhance flexibility and to increase staff job satisfaction. The DPG agreement is believed to be the first example of a trade union formally introducing teleworking arrangements.60

At the national governmental level, initiatives have been undertaken in both Spain and Ireland. In Spain, the white paper for the improvement of public services, published in February 2000, sets out a strategy for public sector management in Spain in the twenty-first century. Telework, to be introduced initially on a pilot basis, is seen as one of the best tools for improving the quality of services.61 In Ireland, the government established a National Advisory Council on Teleworking, with representatives from, among others, Chambers of Commerce, business, trade unions and universities. This Advisory Council reported in June 1999, with a series of recommendation for government action in areas such as employment legislation, taxation and education and training. The Council has also drawn up a Code of Practice on Teleworking.62

Any synthesis of this now considerable bank of work can identify a number of common features. Trade unions in particular are concerned that telework is undertaken voluntarily and not by managerial diktat, that the decision to telework can be reversible, that employment status remains unchanged, that teleworkers continue to have access to their representatives, and ideally that telework is undertaken only for part of the working week (sometimes called "alternating telework"). Telework agreements also typically include issues such as safety and ergonomics for home workplaces, privacy, and access to training. Some, but not all, telework agreements arrange for a payment by employers to teleworkers to cover costs incurred by working from home.

Where telework is being undertaken from home, it is worth recalling that the 1996 ILO Convention on homeworking is likely to be relevant. The Convention covers employees and the pseudo-self-employed, although not the genuinely self-employed home-based worker. The ILO’s Encyclopaedia of Occupational Safety and Health also includes detailed information on telework.63