Monika Martišková

Monika Martišková, Charles University

New technologies, sometimes referred to as Industry 4.0 technologies, may have disruptive effects on economies, especially in those countries that rely on manufacturing to a large extent. Central and Eastern Europe (CEE) represents a region where the automotive manufacturing has become a crucial segment of the economic growth. The arrival of foreign direct investments solved several difficulties this region had been experiencing in the transition period in the 1990s, such as high unemployment rates, stagnant GPD growth and the lack of available technologies and knowledge. However, new technologies may downscale manufacturing advantages by having strong and mostly negative impact on working conditions and the number of jobs in this sector.

There are at least three main reasons for raising the concerns about the impact of new technologies on working conditions. First, the implementation of new technologies will reduce demand for manual work and decrease wages of manual workers.  Second, because of the labour cost reducing character of technologies, cheap labour, the main competetive advantage of the CEE region, may become obsolete resulting in reallocations either to mother countries or to cheaper locations.  The third concern is related to the quality of working conditions associated with the increasing level of control, deteriorating job stability and decline in complexity of duties in manufacturing jobs (e.g. the “feeding-machines positions”).

The present paper studies the effects of new technologies on working conditions by using an example of automotive industry in Czechia based on the secondary data resources and qualitative interviews conducted in the subsidiaries of multi-national corporations (MNCs) and with representatives of social partners at the sector level in 2018. In the paper it is argued that the new technologies´ expected impact on working conditions, wages or job offers are only partially visible nowadays. This situation is associated with the dependent position of subsidiaries in introducing new technologies in production that stems either from limited competences assigned from the headquarter or from local management limited capabilities to implement new technologies. The economic boom experienced in the CEE countries, including Czechia, provides on the one hand incentives to robots´ utilization because of labour shortage, but at the same time it hampers the new technologies implementation because of the production overload and time and capacities constraints to prepare the changes at the firm level.

In light of this development, social partners are aware of expected changes in working conditions, but at the same time, they remain passive in pushing for measures that would moderate anticipated impacts. A broader concept of economic transition is addressed mostly by the business sector actors while trade unions struggle to be involved in determination of policy instruments that would ensure the smooth transition. One of the most important aspects of successful transformation, workers´ participation on life-long learning, is not promoted neither by the social partners, nor by the government.

In the paper, we discuss the puzzle of current improvements in working conditions and wages and expected massive deterioration of quality and quantity of manufacturing jobs. The prospects of workers in the Czech automotive industry do not seem to be dark for now, but the near future remains to be in question that local actors are not fully capable to answer.

The case of Czechia and Slovakia

Marta Kahancová, Central European Labour Studies Institute (CELSI)
Monika Martišková, Central European Labour Studies Institute (CELSI)
Mária Sedláková, Central European Labour Studies Institute (CELSI)

Recent evidence from Czechia and Slovakia, but also other CEE countries, demonstrates that trade unions, with support of, or even joint effort with employers, increasingly prefer legislative solutions to improve working conditions. Through legislation, social partners have managed to introduce significant improvements, i.e. in relation to precarious forms of work including temporary contracts and agency work.

In this paper we examine why legislative solutions are gaining ground in CEE countries that have established traditions of collective bargaining and with fair levels of unionization. In other words, we raise a question why do unions (and employers) increasingly reach out for legislative solutions even if they have other channels of influence at their disposal, including collective bargaining.

In addition, we question the effects of such legislative solutions on (a) the quality of working conditions; (b) on the organizational stability, membership and reputation of trade unions; and (c) on the established industrial relations structures. In particular, we examine to what extent such legislative solutions have weakened or strengthened collective bargaining. The question we aim to answer is whether legislative solutions are crowding out the institution of collective bargaining, or whether they have the opposite effect: does a more detailed regulation generally increase the benchmark for bargaining outcomes and thereby facilitates more ambitious goals for future bargaining rounds?

To examine these questions, we draw on an analytical framework on innovative trade union practices elaborated in the introductory paper. Unions’ legislative efforts are framed as innovative, because only in the last 5-8 years unions openly push for legislative solutions while previously they attempted to concentrate their capacities both on bargaining and political lobbying. At the same time, in the past 5-8 years unions succeeded in significant improvements related to agency work, especially in Slovakia, through legislative efforts.

We address the above questions by examining temporary agency work (TAW) and healthcare – two sectors that witnessed substantial regulatory changes in the past five years both in Czechia and Slovakia. Evidence from other CEE countries is incorporated to underline the main argument.

The TAW sector in Czechia and Slovakia, previously unorganized, saw an important change, first, in trade unions’ willingness to represent agency workers even without direct impact on membership growth; and second, in employers’ willingness to regulate the highly liberal market of temporary agencies and working conditions of agency workers. In result, unions launched cooperation with employers and laid the foundations of sectoral bargaining. However, later these efforts vanished as both parties successfully sought legislative influence. A supporting political environment helped to facilitate this goal, where unions benefitted from sufficient political support. It is questionable whether the same goals would have been reached in more hostile conditions, e.g., with a government less supportive of trade unions.

In contrast, healthcare is a well-organized sector in both Czechia and Slovakia and has benefitted from established bargaining structures at company (both countries) and sector level (Slovakia). The dissatisfaction of some occupational groups, most notably doctors and nurses, with lengthy collective bargaining, often involving dispute settlement bodies, motivated them to push for legislative solutions on wage regulations. This brought a quick success in legislatively anchored wage rises for doctors in Slovakia. In both countries, doctors’ trade unions succeeded with their campaign for better working conditions without relying on the established bargaining channels. The success of doctors’ unions was followed by nurses’ union in Slovakia, but nurses were not as powerful and their legislative effort of wage regulation was successful only until the Constitutional court yielded the legislation unconstitutional. Recently all healthcare unions fought for a legal regulation of wages of all healthcare workers. While the nurses’ unions are not fully satisfied with the outcome, in general all unions favour the legislative solution to lengthy collective bargaining over wages.

The paper will elaborate the argument that legislative solutions are gaining ground because the costs of bargaining are increasing while trust in compliance is decreasing. In other words, unions find bargaining lengthy and increasingly difficult and are afraid of lack of compliance by employers. In addition, unions (and employers, too) are convinced that ‘only legislative stipulations are powerful enough to yield an improvement in working conditions. Law enforcement is higher than enforcement of collective agreements.

What are the implications of these findings for the institution of collective bargaining? While in the case of TAW, we find that legislative solutions are complementary to collective bargaining, evidence from healthcare suggests that legislative solutions are crowding out the long-established bargaining institutions and leave a significant part of healthcare workers without bargaining coverage.