Artificial Intelligence: The Fourth Industrial Revolution and the need for improved employee representation

Publication | March 2018

Traditional labour law is facing new challenges with the upcoming availability of flexible employment platforms (e.g. Uber/Takeaway/Deliveroo/Helpling). Society demands flexible working hours, flexible contracts and most employees are now - or in the near future - required to constantly review their skills to remain employed.

It follows from research performed by the World Economic Forum that the rise of artificial intelligence, robotics and other digital developments is displacing the primacy of human expertise in the economy.

The individuals who will succeed in the economy of the future will be those who can complement the work done by mechanical or algorithmic technologies, and ‘work with the machines.

Will you still have the same job in ten years? The answer is most likely ‘no’.

As a result of rapid technology changes, such as Artificial Intelligence, autonomous vehicles, 3D printing, robotic automation, blockchain, etc., almost all current business models are affected. New technology requires companies to consider investment, restructurings and potentially mass lay-offs. The positive angle is that this may not result in an overall reduction in the number of jobs, people will require a different skillset: we need technicians.

The key question for both employees and employers is how better to anticipate the changes to the labour market to prevent ‘sudden’, ‘unexpected’ and unnecessary redundancies in the future.

In the Netherlands the role of the works council (set out in the Dutch Works Councils Act) is especially relevant in relation to changes to the labour market. This includes:

  • Discussing the general operation of the enterprise at least twice a year in consultation meetings, including agreeing when and how the works council will be involved in the decision-making process;
  • Seeking prior advice from the works council in relation to any significant reduction, expansion or other change or any major investment by the enterprise;
  • Importantly in relation to the rise of Artificial Intelligence, seeking prior advice from the works council in relation to the introduction or alteration of an important technological provision;
  • Requiring prior advice from the works council in relation to the commissioning of an expert from outside the enterprise to advise on any of the matters referred to above.

In addition to the requirement toconsult with the works council, the Dutch Civil Code (DCC) requires the employer to ensure that employees are trained to perform their tasks and responsibilities; or to continue the employment relationship in case of redundancy. There are also limitations on the ability of the employer to terminate the employment relationship based on performance if it turns out that they did not sufficiently provide the ability for improvement in the employee’s performance by training.

Dutch law therefore does seek to protect the workforce from the unavoidable market change, the question is whether these protections are sufficient.

We expect that trade union/works council consultation procedures in relation to restructuring scenario’s will, more than they do currently, focus on the mobility of employees and changes to their roles. For employees whose jobs are at risk of displacement by new technology, e.g. financial operations, accounting and auditing, health care, transport, production, etc. it will become important to be timely and well informed about any proposed future changes within the organisation and to be heard and consulted with. The following tools may be used to force the employer to consider alternatives now and to avoid unnecessary job cuts in the future:

  • Demand continuous learning and reskilling;
  • Unite and create groups of employees whose of positions are under risk of displacement to discuss displacement risks and potential solutions. This may require the prior consent of the works council;
  • Request that trade unions and /works councils focus on the topic of labour market changes in consultation meetings;
  • Claim a social and employee-related paragraph in relation to the board’s long-term vision/strategy as part of the annual report;
  • The Dutch Corporate Governance Code states that the management board of listed companies is responsible for creating a culture aimed at long-term value creation for the company and that it should formulate a strategy in line with this.

The fourth industrial revolution should be an agenda item in most company meetings. It is time for employees to claim more insight into the long-term strategy of the board.

AI Academy

In May 2018, the above topics shall be part of plenary discussions at our offices in Amsterdam as part of the AI Academy. Please feel free to contact Thomas Timmermans if you are interested in attending.


Contacts

Thomas Timmermans

Thomas Timmermans

Amsterdam