FUTURE OF WORK ADAPTING TO THE DEMOCRATISED WORKPLACE - Herbert Smith Freehills
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FUTURE OF WORK ADAPTING TO THE DEMOCRATISED WORKPLACE
FUTURE OF WORK HERBERT SMITH FREEHILLS
Contents
02 Research methodology
03 Welcome
04 Executive summary: The rise of workforce activism
07 The new world of work
08 Activism on the rise
11 The new magnets for activism
17 The reputational risk
19 What next? Adapting to the democratised workplace
23 Six steps to success
27 Research methodology
29 Appendix
36 Contacts
//01
HERBERT SMITH FREEHILLS FUTURE OF WORK FUTURE OF WORK HERBERT SMITH FREEHILLS
Research methodology Welcome
In recent years, we have seen our clients around the world
experiencing an increase in a wide range of employment-related
We are all living through an unprecedented In times of change, people look for someone to
issues including complaints and grievances, collective action and change in the world of work. Inevitably, much of trust. Trust binds people, organisations and wider
challenges around the use of social media by employees. Our aim in the focus is on technology and digital innovation, society together and in this rapidly changing
this research is to discover whether there is firm evidence for this
rise in workforce activism and, if so, to explore the reasons for it. Activism but we believe the transformation is much more
profound.
world of work, trust is the most valuable
commodity that employers will hold.
Results highlighted within this report are based on a survey
conducted by Coleman Parkes. 375 C-suite executives - at (definition) The very reason why companies exist is being questioned. The drive The bond of trust between employers and the people who work for
companies with more than 1,000 employees and upwards of £250 to create value for shareholders is being replaced with an aspiration them (in any capacity) is being tested like never before.
million in annual sales volume - were interviewed across the US, – driven largely by the workforce – to create value in the widest Technological change and the advent of artificial intelligence in the
UK, Europe, Middle East, Africa, Asia and Australia.
The use of direct and noticeable possible sense; for the company, for the community it serves, and workplace is threatening jobs. At work, people are often being
action to achieve a result. for the world in which it operates. People want to work for asked to do more with less – and are seeing their productivity
For the purposes of the survey, we asked respondents for their employers who make them proud, and they want the time they monitored by employers in increasingly imaginative ways. And the
views on two groups of the workforce: employees, defined as those Cambridge English Dictionary spend at work to be fulfilling. In this new world, purpose future of the planet itself is under threat unless society,
working full time or part time under an employment contract, with increasingly matters over profit. governments and business find a common way forward.
full employment rights; and casual workers, defined as contractors,
agency workers, zero-hours workers, self-employed freelancers Navigating an organisation’s route to value creation in this new Protecting and nurturing the trust and engagement between
and others who are hired for a specific role or limited-term task. world takes extraordinary leadership. Leaders must strike the right employers and the workforce in this environment is paramount.
balance between collaboration and competition and find a way to The organisations that will thrive will be those that find a way to
All charts can be found in the appendix section of this report. align resources and people in order to maximise a much broader redefine the workforce relationship, manage tensions and create a
definition of value. Above all, they must bring the workforce along common, compelling vision. In this report, we track the warning
on the journey and respond to their need for work that is rewarding signs in the form of rising workforce activism and discuss what
in every sense. employers need to focus on to protect the relationship of trust and
succeed in this new world of work.
This research springs from our long-held view that getting the
people equation right in this new world of work – a world where Alison Brown, Global Head of Practice
individual and collective voices have prominence like never before
– is the most important challenge of all. The expectations of the
workforce have changed and their willingness to speak up or take
action when something feels wrong brings far greater risks in the
age of digital communication. We hope that the results give you a
new and thought-provoking perspective on the future of work.
Mark Rigotti, CEO
//03
//03
25%
HERBERT SMITH FREEHILLS FUTURE OF WORK FUTURE OF WORK HERBERT SMITH FREEHILLS FUTURE OF WORK HERBERT SMITH FREEHILLS
Respondents say workforce activism
could cost them up to 25% of global revenue per
year (between £121 million and £177 million)
of global revenue per year
Executive summary: The rise of workforce activism
55%
The paradox of the robotic age is that automation will only make human skills
more valuable. The World Economic Forum estimates that 75 million jobs will be
of respondents name 49%
workforce actions as see activism
lost to automation by 2022 but 133 million new jobs will be created – jobs a potential risk to as a positive
requiring uniquely human qualities such as emotional intelligence and fine reputation, only force for
judgment. But unlike robots, humans have opinions – and that presents its own exceeded by cyber change
challenges for employers. threats and economic
recession
Our survey warns of an unprecedented rise in workplace activism ahead, across
all sectors and geographies. As employers explore different working models and
86%
advanced technologies, those working for them are becoming more vocal in
articulating their views – about the workplace, their employer and about wider
social issues – enabled and amplified by social media. The voice of the workforce
59%
of companies with annual of mining companies
will insist on being heard as never before. If traditional, internal communication
channels fail to meet their needs, external means of raising concerns will fill the
revenue of £1 billion or more
predict an increase in
expect a significant rise
among casual workers
48%
choose to engage with
gap. Employers need to be prepared for what’s ahead. internal complaints and employees only through
grievances and 74% see external channels,
more digital petitions rather than use an
ahead
internal forum
84% But large companies see
77% 83%
pay and benefits (57%)
foresee an increase
of those in banking and and the status of casual in activism among
86% in pharmaceuticals/ workers (54%) as significant expect to see
healthcare expect a rise in triggers of activism more crowdfunded casual workers in
employee activism
legal challenges the future
AI and automation
Values are becoming
a significant trigger for
95%
(identified by 57%) activism, including CSR/
59% and surveillance or
environmental issues/
climate change (46%) envisage a rise in employees
of those in Asia and lack of diversity making their voices heard
expect this increase monitoring of (45%) via social media over
to be significant
of companies anticipate a employees (50%) the next 5 years
rise in employee activism are key triggers of
in the future activism
//05 //06
HERBERT SMITH FREEHILLS FUTURE OF WORK FUTURE OF WORK HERBERT SMITH FREEHILLS
The new world of work Activism on the rise
The world of work is undergoing a transformation on a scale we have not seen since the Industrial In every region and sector, workforce activism is a
Revolution. Automation and digital technology is changing how and where we work, introducing new significant concern.
jobs and making others defunct. The skills that organisations need are changing and the scale of the
cultural shift for the workforce is unprecedented. Organisations are navigating a rapidly evolving
environment that could imperil the essential (and valuable) relationship of trust between employer
and worker.
of companies anticipate
Employers are testing out new working models More than 80% expect to see a rise in activism “Unions and some political parties have a rise in employee
and that has implications for employees. The flexible working conundrum among both employees and casual workers in been very critical about contracting out as activism in the future
Flexible and remote working, widely seen as a the future, and almost four out of 10 think this an employment model because the jobs can
strategy that could increase productivity and In 2009, the IBM Institute for Electronic Government published a report, Working Outside increase will be significant. Only 4% think be insecure and Australia is not alone in
workforce engagement, is one of the policies the Box, which tracked the ‘growing momentum in telework’, using IBM itself as a case there will be a decrease in activism from either experiencing that,” says Anthony Longland,
being reassessed in some sectors; the study. The report said that in 2009, 40% of the company’s 386,000 employees in 173 group in the future (Figures 1 and 3). Partner, Australia. As a result, casual
importance of collaboration and diversity of countries ‘do not have a traditional office and many tens of thousands more work outside employment has recently become a focus
thinking, especially when it comes to sparking their office at least some of the time’. As a result of its telework policy, the company had Respondents in the pharmaceuticals/ for class action funders. Anthony adds:
innovation, has led some companies to reduced its office space by 78 million square feet since 1995, the report added, and 58 healthcare and banking sectors are more “In these cases, typically the plaintiff and
reconsider their approach (see box). million square feet had been sold at a gain of US$1.9 billion. likely to predict a rise in workforce activism plaintiff’s lawyers will push out a lot of
(86% of respondents in pharmaceuticals advertising in the hope of persuading more
Meanwhile, legislation on workers’ rights is IBM’s own research argued that teleworkers were more highly engaged, more likely to and healthcare say they expect to see an people to join the class action and that
still catching up with the pace of change in the
workplace, driven largely by case law being
consider their workplaces as innovative and less stressed than their office-bound colleagues.
Nevertheless, in March 2017 an article in the Wall Street Journal revealed that thousands of
increase in both employee and casual
worker activism, while 84% of banking
raises awareness – and engenders a
response in employers.” 83%
developed across Commonwealth countries US-based IBM teleworkers were being asked to relocate back to six regional offices. respondents anticipate an increase in of respondents
(such as issues surrounding the employment
While IBM has not discussed its decision publicly, in a leaked internal video its Chief
employee activism and 83% expect to see a Criticism of casual employment models is expect to see a
status of gig economy workers). rise in activism among casual workers). This growing in other countries too, although in
Marketing Officer said that there is “something about a team being more powerful, more
most likely reflects the fact that both of the UK activism and legal claims have so far
rise in activism among
Employees – and, increasingly, casual workers impactful, more creative, and frankly hopefully having more fun when they are shoulder to
these sectors have specific concerns about been focused mainly on groups of gig casual workers
employed at arm’s length through contracts, shoulder. Bringing people together creates its own X Factor”.
potential triggers of activism – automation economy workers. These claims,
agencies or in the gig economy – are making in both cases and increased surveillance orchestrated by claimant law firms and
Conversely, in early 2019, BNY Mellon reversed its plan to ban home-working in the face
their feelings known, in any way they can. and monitoring of employees in the case of unions, concern the right to claim pay and
of staff opposition and wider criticism. The lesson is that there is no one-size-fits-all
While union membership in many countries is pharmaceuticals and healthcare. holiday as 'workers', rather than being
approach for all organisations. What’s needed is balance, giving employees enough
on a steady decline, coordinated action still treated as self-employed. Tim Leaver,
flexibility to enhance engagement and productivity while making sure that there are still
has an impact. In September 2019, for Concerns about a rise in casual worker Partner, UK, says: “What status and rights
opportunities for interaction and collaboration with team members and a careful weighing
example, almost 50,000 members of the activism are stronger in some sectors and these workers should have remains a topic
of the pros and cons of a remote working policy.
United Auto Workers union (UAW) walked regions. of political debate across Europe, while gig
out of General Motors, shutting down 33 Flexible working, for example, is widely seen as a way of helping reduce the gender pay workers themselves are increasingly turning
8
5% of those based in
59%
manufacturing plants and 22 distribution gap, given its attraction for working mothers, and as important in improving mental health, to digital platforms to coordinate petitions
warehouses across the US. The Financial another key issue rising up the corporate agenda. Australia, for example, think and strikes to demonstrate their
Times noted that the strike – calling for fair dissatisfaction with pay.”
wages, affordable healthcare, profit sharing, there will be an increase in of mining companies
job security and a path to permanent Unionisation and employee representation are ways of engaging with the workforce to a more casual worker activism in the Moritz Kunz, Partner, Germany, adds: expect a 'significant'
employment for temporary workers – familiar, formal and regulated methods of proactive and transparent discussion of future (compared with 75% of “The German union IG Metall is increasingly increase in casual worker
represented “the resurgence of organised interaction between employer and employee corporate values. Trusted techniques will have concerned with protecting the precarious activism
those in Europe and the UK).
labour activity in America” (a country where – but they are rapidly becoming matched by to change; attempting to limit what employees rights of workers in the gig economy and is
fewer than 10% of employees hold union unregulated, unpredictable forms of worker can say in public seems increasingly unrealistic This may be connected to the fact that 59% also working with unions in other EU
membership) and “the rebirth of labour as a activism, amplified and coordinated through in a hyperconnected, social media-dominated of respondents in the mining sector – an countries to defend the rights of 'crowd
political and economic force”. digital communication. Employers are in a new environment. The previously distinct important employer in Australia – expect to workers', who anonymously take on small
world of employment relations and, at times, it boundaries between corporates, their see a ‘significant’ increase in casual worker tasks through online platforms.”
Equally, in mainland Europe, employee feels like the Wild West. workforces and society are fading; if activism in the future.
representation, in the shape of works councils, organisations are to win the war for future
continues to play an important role in The big question for employers is what they talent and avoid the rising risks of worker
day-to-day business operations. can (and should) do to prepare themselves for activism, they need to be one step ahead.
the future. This rise in workforce activism will
require an entirely new mindset, from new //08HERBERT SMITH FREEHILLS FUTURE OF WORK FUTURE OF WORK HERBERT SMITH FREEHILLS
The changing forms of Large companies (those with annual The role of social media
activism revenue of £1 billion or more) are more likely Wayfair’s internal dispute goes viral
to expect a rise in activism than their smaller Digital technology and social media have
Workplace activism can take many forms. counterparts – 86%, for example, think they provided a convenient way for the workforce The experience of the online furniture company Wayfair shows how social media can
to express their views, compare their
95%
Tighter legal restrictions around organised will receive more internal complaints and amplify employee activism. In June 2019, a group of its employees objected to fulfilling
strike action in many countries, notably in grievances from their workforce in the experiences with others and, when needed, an order for furniture for a detention centre on the US-Mexico border. The company’s
the UK and parts of the Asia Pacific region, future, compared with 79% across all mobilise a response. This has an impact on management messaged all of its employees, noting their concerns but saying that it
have reduced its frequency in recent years. companies, and 74% expect to face more an organisational scale: grievances that was the company’s business “to sell to any customer that is acting within the laws of
Instead, with the emergence of digital digital petitions compared with 63% of all were once private can now become public – the countries in which we operate”.
communication and social media, respondents (Figure 5). and globally public – at the touch of a button.
employers must navigate a far more But it also has an impact on labour policies An employee shared a screenshot of the message with a friend, who tweeted it. The
While companies in Asia are more likely to envisage a rise in employees globally. Social media campaigns can put tweet went viral and Wayfair employees grasped the initiative; a @wayfairwalkout
unpredictable landscape.
report a rise in activism, Fatim Jumabhoy, making their voices heard pressure on sectors and organisations, Twitter account was set up within two hours, gaining more than 22,000 followers. A
95% say they expect to see an increase in Partner, Singapore, makes the important via social media through the mobilisation of consumers Facebook page publicised a planned protest rally, which was attended by hundreds
their workforce making its voice heard point that the way in which activism in the future across the world, to force through change to and attracted media interest from around the world. Wayfair shares fell by 5% on the
through social media channels in the future. manifests itself at a country level is often working practices. For example, this has same day.
culture-specific: “Because many North already been seen in practice in the
That said, other forms of activism are also on Asian countries have consensual societies, campaign against modern slavery and to
the increase, although to a lesser extent. public displays of dissent have been less improve working practices in the South Social media arguably does a more efficient “Social media are undoubtedly
common. Nevertheless, sizeable political African wine industry. job at mobilising groups of people than
unionised collective action did in the past,
driving activism. Employees are
protests over the years in Malaysia,
F
or example, 79% predict a using social media proactively
86%
Thailand, Taiwan, Korea, and Hong Kong Employee and casual worker voices are being as the example of Wayfair’s recent
rise in formal internal indicate that the region is by no means heard more clearly and more widely than ever experience shows (see box). There is no and effectively, and this means
before and they are also better informed. shortage of help, advice and support
complaints and whistle- immune to collective protest.”
A growing range of digital tools, including
that employment cases and
blowing activity. of companies with annual available to workers with a grievance;
campaigns are far more
Culture can play a significant role too. rights-checker apps, along with the ability to not-for-profit organisations such as
revenue of £1 billion or more
"Restructuring, for example, might be more
predict an increase in
make data subject access requests under Organise in the UK or United for Respect in prominent. The #MeToo
likely to trigger a reaction in countries where data protection legislation, mean that the the US provide digital tools, including online
the cultural norm is a job for life, such as internal complaints and workforce has access to far more information surveys and template letters, which allow
campaign may be past its peak
Japan, whereas workplace changes that grievances and 74% see than before. workers to coordinate anonymously with but its impact cannot be
could be interpreted as restricting individual more digital petitions workmates. overstated – and employers
rights are more likely to be a trigger in ahead “We see an increased use by have had to rethink their
jurisdictions with a history of civil rights “In a sense, social media can be seen as a
employees to publicise their proxy for unionisation,” says Barbara Roth, strategies in order to deal with
activism,” says Tess Lumsdaine, Senior
Associate, Hong Kong. claims against their employer Partner, US. “What is interesting in the US is the increase in claims”
through social media in parallel that some aspects of the National Labor
Relations Act have recently been expanded. EMMA RÖHSLER, PARTNER,
with legal proceedings, which in Section 7 of that law, for example, gives FRANCE, HERBERT SMITH
some cases has also been employees the right to act together for their FREEHILLS
crowdfunded via social media” mutual aid and benefit, and that has been
CHRISTINE YOUNG, PARTNER,
extended to workers who are not unionised. “We have seen a spike in
It is conceivable that employees could use
UK, HERBERT SMITH FREEHILLS social media to get together to discuss
workplace misconduct
Changes in forms of activism issues that concern them.” investigations recently, especially
“All it takes is one particularly This ability to coordinate and collaborate
around sexual harassment. The
vocal, particularly difficult rapidly could lead to more employee voice is starting to
individual to raise concerns employment-related class actions, whether make itself heard.”
formal or informal, providing safety in
through social media and numbers and an opportunity to share legal FATIM JUMABHOY,
whether or not there's any basis costs for those involved. PARTNER, SINGAPORE
Strike action to it, often you can’t defend
yourself publicly.” of respondents expect
SURVEY RESPONDENT
77% to see more crowdfunded
Social media Internal complaints Whistleblowing activity
legal challenges in the future
//10HERBERT SMITH FREEHILLS FUTURE OF WORK FUTURE OF WORK HERBERT SMITH FREEHILLS
The new magnets for activism
Top triggers of activism by company size
1 2 3 4 5
Since worker activism first became More recently, a significant shift has taken T
hose taking part in our
commonplace during the Industrial place. The range of issues that trigger
Revolution, actions have invariably been in activism among the workforce is widening,
survey agree that a change is £1bn+
Contract Automation
underway. When asked what Pay/benefits Surveillance CSR
response to disagreements over pay and/or bringing in not only concerns around the workers & AI
working conditions; the Gdańsk Shipyard changing nature of work in the digital age, they perceived to be the
strikes in the 1980s were a relatively rare but environmental, political and social main triggers for increased £500-£999.9m
example of industrial action that was driven issues. Whereas previously the blame was
by politics and civil resistance. attributed mostly to government or State
workplace activism in the Automation
Surveillance Diversity CSR Pay/benefits
& AI
bodies, the new era holds companies to next five years, pay
account in equal measure, and many have inequalities and pensions are
not yet adapted to the challenges. This is not seen as the dominant £250-£499.9m
consistent with the structural shift Automation Surveillance CSR Corporate
underway in most countries towards mixed issue. (Figure 7) & AI Pay/benefits strategy
economies and from public to private sector
employers.
The global top triggers for activism Top triggers of activism by region
1 2 3 4 5
Automation Surveillance Diversity CSR Pay/benefits
US & AI
Automation
& AI Discrimination CSR Surveillance Pay/benefits
EU/UK
2 Surveillance
4 CSR
1 Automation
& AI 3 Pay &
Benefits 5 Diversity
Surveillance CSR Automation Diversity Contract
Asia & AI workers
CSR PAY
RSITY Automation Diversity Surveillance Pay/benefits Corporate
Australia & AI strategy
Middle East
Automation Diversity Pay/benefits Surveillance CSR
& AI
& Africa
//12HERBERT SMITH FREEHILLS FUTURE OF WORK FUTURE OF WORK HERBERT SMITH FREEHILLS
The risk of unequal pay Andrew Taggart, Partner, UK, notes that in Employee surveillance and Most forms of monitoring will involve
the future UK employers could be required to Automation & AI monitoring processing personal data which, across Fingerprint scanner falls foul
That’s not to say that pay and benefits are no undertake and publicise equal pay audits. as a trigger for activism Europe, is subject to restrictions under the of the Privacy Act
longer a magnet for activism. The UK Government Equality Office is Half of companies identified issues General Data Protection Regulation.
considering when mandatory audits could be connected to the surveillance and Monitoring is permitted only if the In early 2019, Australia’s Fair Work
5
7% of companies with annual appropriate and the idea has also featured in 69% 45% monitoring of the workforce as a potential employer has assessed that it’s truly Commission (FWC) heard a case
revenue of more than £1 billion Labour Party policy: “If this does become a trigger for activism. Companies in the necessary and proportionate to achieve brought by Jeremy Lee, who had been
name pay inequalities as a requirement, the publication of equal pay 67% technology, entertainment and media legitimate interests, and usually only if dismissed by his employer for refusing
audit data could act as a significant catalyst sector, and in pharmaceuticals/healthcare, employees have been fully informed as to to provide his fingerprint for a new
trigger, compared with for employee and trade union activism as are more likely to see this as a concern (with what monitoring is taking place and why. entry system used to check workers
US Australia Asia
47% overall. well as for equal pay litigation.” 65% and 59% respectively identifying it as Covert monitoring will usually only be in and out of its site. Mr Lee argued
a trigger of activism). justified if the employer has strong grounds that he should not be required to
The risk is that years of wage stagnation in Automation and AI Overall, 57% of respondents to to suspect wrongdoing. It also engages the provide his fingerprint, on the grounds
some developed nations could raise problems
for employers in the future; the disconnect
in the workplace our survey identify automation European Convention human right to that the biometric data contained
privacy; Eduardo Gómez de Enterría, within it was ‘sensitive data’ under the
between worker and executive pay and The future of jobs in an increasingly and AI as a trigger for activism Partner, Spain notes that in a recent Spanish 1988 Privacy Act and therefore could
pensions has already prompted shareholder automated workplace is seen as the most in the next five years, although case, the European Court of Human Rights
activism and corporate governance reform in likely trigger of employee and casual worker Sectors identifying only be collected with his consent.
concerns are not evenly surveillance and monitoring made clear that the covert use of CCTV to
the UK. Low wage growth leads to activism in the near future. Predictions about record supermarket staff was a serious Employers in Australia were granted
perceptions of inequality, which encourages the impact of automation on jobs vary widely distributed geographically or as a potential trigger an exemption from the Act for
intrusion to privacy, but in that case was
left-leaning activism. Across all industries, the – a study by the University of Oxford in 2013 across industries. for activism proportionate given the employer's employee records when it was first
debate over what is 'fair' remuneration and an predicted that 40% of US jobs could be reasonable suspicion of serious misconduct introduced, over concerns of the cost
appropriate reward for innovation will continue automated out of existence by 2030. 69% of respondents based in the US and 67%
of compliance. Mr Lee’s employer
to rage. Meanwhile, more recently, research by the of those in Australia identify automation as a 65% 59%
and the limited duration and nature of the
surveillance in an area that was open to argued that his fingerprint formed
Organisation for Economic Co-operation and significant trigger for activism, compared with Technology, Pharmaceuticals/ the public. part of his employee record and
Employees are only aware that they may have Development (OECD) in 2018 estimated that just 45% of those in Asia. This is not to say entertainment healthcare
should fall under the exemption. The
an equal pay claim if more highly paid 14% of jobs would be lost in its 32 member that automation should be less of a concern in and media
There are complex implications for FWC, though, found that the
comparators can be identified. In the past, countries – but it remains irrefutable that Asia – most predictions see the impact
employers, which will only increase as exemption wording related to
contractual prohibition on discussing pay (as automation and artificial intelligence (AI) will affecting all regions over time. Rather, it’s
technology becomes more sophisticated personal information that is ‘held’ in
well as natural human reticence on the topic) replace tasks and roles in many sectors. possible that workforces in Asia simply don’t
over time and as the law catches up with an employee record – and as the
has limited claims, but over the last decade yet see automation as a serious threat.
developments. Whether it’s location employee’s fingerprint had not yet
this has been eroded. Reskilling will become a high priority for both There are many valid reasons why an tracking, time recording, heartbeat
In terms of sectors, respondents in the been collected, it could not already be
employers and workers. This disruption could employer would want to monitor their monitoring, facial recognition technology or
pharmaceuticals and healthcare sector, and in held and the obligations of the Act
present an opportunity for organisations to workers, from safety and the need to meet voice recording, employers must think
banking, are more likely than others to name applied. The FWC found in the
re-shape how, where and when people work, regulatory requirements to protecting its carefully whether and how to introduce
automation as an activism risk, perhaps worker’s favour and he was awarded
perhaps instigating a flatter corporate confidential information. As monitoring surveillance technology or face a possible
reflecting the fact that both sectors have compensation.
structure with greater allocation of technology and software has become more backlash. Even if the workforce is on board
responsibilities to teams, or the development relatively recently begun to explore the use
sophisticated, though, employees, casual with the monitoring, this will not necessarily
of an ‘internal gig economy’. But of AI.
workers and the general public have be a complete answer given that in Europe
organisations will need to bring the workforce Arias vs Intermex Wire
Anthony Longland, Partner, Australia, points to become more alert to the possibilities and employees can never genuinely be
Legislation in a number of jurisdictions along on the journey or face disruptive Transfer
the experiences of the mining sector as an to their privacy rights. According to a 2018 considered to have given their consent
(including the UK, France, Germany, and US activism.
example of companies effectively addressing survey by Gartner, more than half of 239 freely in an employment context. As In 2015, a former sales executive for
federal law) has been introduced expressly
the risks of automation: “The mining sector has large organisations surveyed were using Christine Young, Partner, UK says: "It's very money transfer service Intermex filed
permitting discussions about pay, or requiring In a recent survey carried out for the
been heavily affected by automation but there “non-traditional” monitoring techniques, much a case of 'just because you can do it a state court lawsuit in California
larger companies to report on their gender pay Commission on Workers and Technology,
have not been any major disputes around it. So including analysing the text of social media doesn’t mean you should'. Can you achieve claiming that she had been fired after
gap data or respond to individual information 80% of UK workers said technology
far, mining companies have implemented messages and the use of genetic data, an the same objective in a less intrusive way?” she disabled an app that tracked her
requests. Both are fuelling litigation. Platforms introduced at their workplace had already
automation in a progressive way, reskilling increase from 30% in 2015. movements 24 hours a day through
like Glassdoor have also made pay comparison impacted on their role, and 58% felt
easier, while the scope for sharing pay frustrated and powerless at their employer's where they can and, as a result, have managed
Legislation around surveillance and
“Like a lot of companies we will her company-issued phone. Myrna
information through anonymised apps is clear. failure to consult or give them any say over to maintain their social license to operate.”
monitoring of the workforce has expanded in probably end up going down Arias said she and her colleagues had
how this was done. It also found that been required to download the job
Once the potential for a claim has been Tim Leaver, Partner, UK identifies the adoption recent years, particularly in Europe. Some EU the road of facial, retinal or management app and she had
women's jobs make up 70% of the total at nations require employers to consult with
identified, claimant lawyers have used high risk of automation, raising the risk of
of automated decision-making and algorithms fingerprint recognition security complained that monitoring her
in recruitment and promotion as another employee representative bodies before
technology to great effect in building group reduced diversity and a widening of the
potential trigger for activism. 60% of subjecting workers to surveillance measures. programmes and there’s a location during non-work hours was
claims – the numerous ongoing equal value an invasion of her privacy. The case, in
claims against UK supermarkets are an
gender pay gap. Concerns about job losses
respondents opposed its use in a recent In the US, a number of states have introduced sense that employees are
run deep; there have even been reported legislation that prevents employers from which the plaintiff claimed damages
obvious example. Alleged pay incidents of employees deliberately
YouGov poll and there is growing public and uneasy with that. I think that’s of more than US$500,000, was
governmental concern over the need for ethical requiring employees to supply their login
discrimination is also the subject of a assaulting and sabotaging their robot details for social media accounts. something everyone will face in settled out of court.
long-running class-action arbitration by guidelines, a subject that is currently also the
thousands of women against a subsidiary of
co-workers.
focus of EU attention. the future”
Signet Jewellers in the US. SURVEY RESPONDENT //14HERBERT SMITH FREEHILLS FUTURE OF WORK FUTURE OF WORK HERBERT SMITH FREEHILLS
Social and environmental Amazon employees have also used a more Corporate strategy meets Perhaps the best known is the collective “Companies are being
direct method to try to persuade the company employee values action of Google employees in 2018 against
concerns Project Maven, a contract with the US
democratised. Employees
to take action on climate change. A group of
Our survey shows that workplace activism is workers used shares they had been awarded Pentagon that used AI to interpret camera increasingly feel that
increasingly focused around social and
53% of mining as part of their compensation package to file a 37% of companies footage gathered by drones. Some organisations belong to them.
environmental issues, particularly climate resolution at Amazon’s annual general engineers refused to participate in building
change; employers are feeling the pressure to companies predict a rise meeting, asking the company to report
(rising to 47% of those
security tools connected with the project
When they see an issue they
in Australia) expect to
‘do the right thing’. in activism triggered publicly on its plans to reduce its use of fossil see more activism and others resigned. As a result of the don’t like they want to force
by environmental and fuels. The resolution did not pass, but the point triggered by employees’ pressure, Google announced that it would their employer into taking
social issues. was made. objections to strategic not renew its contract with the Pentagon.
action, even if the employer
management decisions Shortly afterwards, hundreds of workers at
Microsoft protested the company’s work for would have done that anyway.
46% of companies In September 2019, the US Immigration and Customs Speed is everything. The
expect social and 4,600 climate Enforcement when it became apparent that
problem is that you can’t
environmental concerns to protests took place In recent months, there have been several migrant children were being separated from
in 150 countries high-profile instances of workforces their families on the US-Mexico border. always make the right
become an increasing focus
for workplace activism in
collectively protesting companies’ actions or decisions in a hurry.”
decisions that they feel are not in keeping This is activism that goes well beyond
the near future, rising to In September 2019, 4,600 climate protests with the organisation’s mission statement. compensation and even culture. One of the EMMA RÖHSLER, PARTNER,
53% in Asia. took place in 150 countries. What was striking frequently noted characteristics of the FRANCE, HERBERT SMITH
was the role that employee groups, notably Millennial generation is the wish to work for an FREEHILLS
from technology companies including employer whose values reflect their own. The
Microsoft, Google, Amazon, Facebook and rise in activism centred on corporate
Twitter, played in coordinating the action. behaviour shows that employees are
Amazon Employees for Climate Justice say increasingly willing to translate this trait into
more than 1,800 employees joined the action. This presents a dilemma for employers,
The largest companies are more likely to marches (it has 8,000 members) specifically who must balance the potential damage to
predict this trend, along with those in sectors to protest the company’s failure to take more reputation and the employer brand with the
that are at the front line of the environmental action to address the climate crisis. reality of creating value for shareholders. If
debate – 53% of mining companies predict a Meanwhile, the hashtag #TechClimateStrike they are to avoid public declarations of
rise in activism triggered by environmental and coordinated the involvement of more than hypocrisy, employers need to be clear on the
social issues. 3,000 technology workers in Seattle. values they hold – and live them.
//16HERBERT SMITH FREEHILLS FUTURE OF WORK FUTURE OF WORK HERBERT SMITH FREEHILLS
The reputational risk
The expected rise in workforce activism is important because
companies see it as a major risk to corporate reputation – and
reputation matters, not only to customers and clients but also to
current workers and potential recruits. A war for talent is raging
and it is difficult to fight with a damaged employer brand.
The financial impact of workforce
activism
Worldwide The financial impact of workforce activism
In Australia, respondents respondents in the can be huge. A two-day strike by British
Overall, 55% of identify workforce activism banking and real estate Airways pilots in September 2019, which
respondents name as the second biggest risk sectors name workforce resulted in the cancellation of 2,325 flights,
workforce actions as a risk to corporate reputation activism as the biggest
cost the airline’s parent company, IAG, at least
€137 million.
to reputation, exceeded only potential risk to reputation
by cyber threats, and global that they face
economic slowdown
(Figure 10)
Activism could be
The larger the company, "We are as concerned as the costly – as much as
the more pronounced the next company about our
25%
concern that workforce reputation and about what
activism could damage our employees think about
reputation; 62% of
companies with revenue of us. It’s a significant risk
£1 billion or more cite this because it's one that is hard of global revenue
as a potential risk to control.” per year
SURVEY RESPONDENT
Companies taking part in the survey are
clear that activism relating to any of the
key triggers could be costly – as much as
25% of global revenues in some cases.
Considering the size of the companies
taking part in the survey, in real terms this
could mean an annual hit to revenue of
£121 million to £177 million.
//18HERBERT SMITH FREEHILLS FUTURE OF WORK FUTURE OF WORK HERBERT SMITH FREEHILLS
Unlike a cyberattack or global economic event, however, employers have a degree of control over a
Scenario 2
workforce dispute or protest, whether it becomes public or not. The challenge for employers is to find
a way to adapt to the evolving workplace and work environment. We tested organisations’ readiness You represent an
strengthened further when new EU-wide
rules come into force in 2021, including an
by asking for their reactions to two fictional scenarios: organisation that openly obligation on larger companies to provide
promotes sustainability and an effective internal reporting channel.
Employers’ instinct
ethical business practices. In Australia, Shiv Jhinku says private sector is to engage quickly and
Engaging with a social media storm brings An investigative journalist, whistle-blowing legislation was amended
Scenario 1 risks, particularly when there are legal publicly in times of a crisis:
early in 2019 to expand the categories of
questions involved. This underlines the helped by an internal
A current employee has
people that can make disclosures and the 64% would apologise
importance of legal, compliance, HR and whistle-blower, claims that matters that they can raise. As a result,
organised a legal 85% of respondents media communications departments being one of your suppliers employers will need robust policies and 74% would announce an
crowdfunding page, in would actively defend their closely involved in crisis management
employs modern slavery procedures in order to respond quickly internal investigation
strategies; a situation like this is not
relation to an age position on social media exclusively the domain of PR. “When workers and your firm failed
and effectively.
and in the press.
discrimination claim that something goes wrong, employers want to to act. How would you Even so, almost half of respondents (47%)
was brought against your 27% of banking sector deal with it internally without causing external
respond?
tell us that they don’t have a formal
respondents are the damage,” says Emma Röhsler, Partner, France. whistle-blowing policy in place, rising to
organisation, which is “They don’t want their mistakes splashed over 52% in Africa and the Middle East. As Ben
most likely to ignore
trending on social media and any trial by social media
the media, but social media means that events
Once again, employers’ instincts to engage
Hopps, Of Counsel, UAE, explains,
can be taken out of their control very quickly.” whistle-blowing policies in the Middle East
has received support in quickly and publicly when a crisis hits are on
have historically seen low levels of adoption
excess of £1 million in 24 Christine Young, Partner, UK, says that taking display – 64% say in this situation they
because of a lack of protection for
a transparent approach and engaging publicly would immediately apologise and 74%
hours. would announce an internal investigation.
whistle-blowers in law. However, over the 46% of respondents
with events can pay dividends in terms of past decade, more and more Middle East
good publicity, but there is a risk: “If you go would immediately suspend
Instincts, however, are not always helpful – countries have implemented specific
When a workplace issue hits social media, The majority of respondents (85%) say public and, for example, say that you will act whistle-blower legislation, following an
their relationship with the
46% would react by immediately
the short-term impact can be intimidating. they would actively engage in the debate in on the results of a review, you are effectively
suspending their relationship with the increased anti-corruption drive across supplier before
The temptation for organisations, from a this scenario, on social media and in the committing to taking steps before you know
supplier in question even before an the region. an investigation
public relations perspective at least, is often press, to defend their position. Those in the what they might be.”
investigation has begun. This could have has begun.
to engage at some level with the debate, on banking sector are the most likely to ignore Employers in Asia are more likely to have a
One other point raised by this scenario is the legal ramifications in some jurisdictions; in
the grounds that ignoring it takes away any any trial by social media (27%), perhaps formal whistle-blowing policy, with just
way in which the case is funded. Shiv Jhinku, France, for example, suppliers could claim
semblance of control over the story. alert to the more stringent compliance 35% of respondents from this region saying
Executive Counsel, Sydney warns that compensation and damages if a business
requirements in the sector – financial they do not. In the current climate, a formal
crowdfunding for individual litigation may relationship is subject to ‘brutal cessation’.
services firms are specifically required by policy outlining the rights and treatment of
become more common in the future as its In the US, a claim for tortious interference
regulators in many jurisdictions to ensure whistle-blowers is advisable for businesses
availability and success stories become more with business or contractual relationship, or
their communications, including social in any sector, even if one is not yet required
widely known. breach of contract, could be asserted.
media communications, are clear, fair and by law.
not misleading. In recent years, legislation to protect
The role that cultural influences play in
whistle-blowers has been strengthened in
many regions of the world. In the UK,
workplace disputes can be seen in 47% of respondents
well-established legislation protects
respondents’ reactions when we asked don’t have a formal
what methods they use to communicate
whistle-blowing workers from detrimental
with workers.
whistle-blowing
treatment. Emma Röhsler comments that policy in place
even in France, which has historically been
reluctant to encourage whistle-blowing, O
verall, 83% say they would in Africa and the
protection for anonymous whistle-blowers
is in force and has gained greater
continue to use employee Middle East (up to 52%)
acceptance since France implemented the forums as a primary method in Asia only
Sapin II Act in 2018. She explains: “We’re of engagement in this situation 35% don't
starting to see greater use of anonymous but this rises to 95% in the
hotlines, for example, to report poor
conduct. It’s a way for employees to protect more consensual societies
themselves.” Protection will be of Asia.
//20HERBERT SMITH FREEHILLS FUTURE OF WORK FUTURE OF WORK HERBERT SMITH FREEHILLS
What next? Adapting to the The Chartered Institute of Personnel and
Development has argued that traditional
Employee representative committees or works
councils are an important workplace
While employers seem engaged with the idea
of formal consultation with employees, it is
democratised workplace
approaches to the employee voice – mechanism in many regions, notably in northern notable that this doesn’t always extend to
representative committees and whole Asia and mainland Europe. In contrast to the US, casual workers.
workforce surveys – are too limited in scope worker representation is embedded in
because they focus mainly on improving day-to-day operations across many European F
ewer than half of respondents
organisational performance. The CIPD argued countries. “These mechanisms are good for say they have a forum or
Given this evolution in both the nature and focus of workplace activism, that the focus should also be on the individual transparency,” argues Emma Röhsler, Partner,
mechanism for consulting with
what steps should employers take to prepare themselves? benefits of being heard, such as its France. “They help employees to accept
contribution to human wellbeing, fulfilment decisions that are made, because they better this group of workers (Figure 14).
and mental health. understand the reasons. But it does mean that,
in some cases, employees have access to the This is surprising given that:
The real danger for employers is that, if they same information as company boards or even
We believe there are two priorities for employers: fail to provide an effective forum internally the company’s auditors, and that can be difficult.
where the issues the workforce cares about Sometimes they become a forum for nuisance
can be discussed, employees and workers will value.”
take the discussion outside the organisation’s
1 2 walls. This risk has increased in the age of
instant electronic communication. Companies
For organisations that do want to engage on
issues raised by the workforce, technological
spend a great deal of time and effort collecting solutions may provide an answer if the right 83% of employers
Provide an effective Consider an the views and feedback of their clients and moment is seized. UPS's slowness in setting expect to see an increase
channel for the appropriate level customers but have been much slower to up an internal social network meant that, in activism among casual
internal voice of controls for the adopt the same approach for their workforce. when it finally did, employees had already workers in the future and
outside voice organised their own external site and were
O
ur survey shows that most reluctant to transfer to the in-house platform.
37% expect that to be
The advantages of internal sites are clear significant, rising to
organisations are still relying 60% in Asia.
– organisations can much more easily tap into
on traditional forms of and influence views and cyber security is
employee representation to stronger. But if they are to achieve the aim of
engage, and probably setting keeping the workforce voice internal and
constructive, management needs to engage, to
The internal voice the agenda for discussion.
listen and to respond.
A number of academic studies have highlighted the importance of providing the workforce
with an effective voice. “Use of social media does present Employers also
risks that need to be managed expect the rights of casual
4 out of 5 through effective guidance and workers to become a likely
Benefits to providing employees with an effective internal voice companies have put in trigger for activism in the
policies. Apart from the obvious future – 54% of large
place a formal forum or
mechanism for employee risks around posting companies view casual
consultation and the inappropriate content, personal workers as a magnet for
remainder say they will data or intellectual property, activism.
Employees see the in the near future. hackers are increasingly using
Management understand employment relationship
employees’ views and can social media to profile
as reciprocal, resulting in
inform their decisions on more cooperative organisations and employees for
work-related issues employment relations the purpose of phishing attacks
or other attempts to breach
companies' security.”
It appears that employers rely on these
mechanisms in practice – 83% say that in a ANDREW MOIR, PARTNER,
case such as scenario 2, their employee forum UK, HERBERT SMITH FREEHILLS
More efficient diffusion Improved engagement, or committee would be an important channel
of information, knowledge leading to higher of engagement. However, when asked what
and experience through productivity channels they would use to respond to issues
the organisation employees want to discuss, 48% say they
engage solely on external channels rather than
internal forums, despite the greater
reputational risk. //22HERBERT SMITH FREEHILLS FUTURE OF WORK FUTURE OF WORK HERBERT SMITH FREEHILLS
Together, these form a strong argument for Where opinions are critical of an employer, the The digital age requires employers to look 4
6% of companies say they “I think it’s important to have as
extending the concept of employee forums or company’s ability to require employees to beyond traditional thinking when it comes to Israel Folau and Rugby
leveraging the technology used to gather keep quiet is increasingly being curtailed by the external voice. There is a strong
have placed restrictions on few regulations restricting
Australia
customer feedback to casual and remote legislation if exposure is in the public interest. temptation to restrict or control what the what employees and casual off-duty conduct, activity or
workers as soon as possible. Tim Leaver, In addition to the recent growth in workforce can and should say on social workers can say or do, The line between an individual’s speech as you possibly can. It’s
Partner, UK, notes that employers in the gig whistle-blowing legislation, the #MeToo media, including where comments are posted including what they say about employment-related capacity and their
economy are perhaps ahead of the curve here. campaign has reset the dial on the extent to outside working hours through personal private capacity is a difficult one that
an area where internal
Hermes, Deliveroo and Uber have all created which employers should be allowed to use accounts on pages without full public access. the company on social media, has been made more complex by social regulation can be overreaching,
various channels for staff to discuss issues of confidentiality provisions to prohibit or deter But this raises many difficult questions, not attending marches, signing media. In May 2019, Rugby Australia problematic and ineffective.”
concern, including online forums, WhatsApp victims of harassment or discrimination from least: does the policing of opinion invade the petitions, or taking strike announced that it had terminated its
groups and other apps, drop-in centres, phone speaking up. There is growing acceptance that, right to privacy? contract with Israel Folau, the national SURVEY RESPONDENT
action (Figure 15).
lines, or opportunities for all individuals or if organisations can sweep grievances under team’s former fullback. It came after a
A stricter line may be appropriate where
independently selected representatives to the carpet by buying silence, there is little “It’s very easy to figure out how The content of such policies will be key tribunal set up under the Professional
comments are made by senior managers likely
meet regularly with local management. incentive to improve workplace culture. Player Code of Conduct found him in
to discipline an employee for considerations in determining what to be seen as representing the organisation's
disciplinary action is appropriate. As Fatim breach of the Code for posting on
“Employee representation helps In the US, employers’ ability to require staff to any activity or misconduct Jumabhoy, Partner, Singapore, points out, the Instagram that Hell awaited various
views. Moritz Kunz, Partner, Germany, points
to the recent example of Airbus, which moved
to head off activism because
sign up to mandatory confidential arbitration during working hours within the severity of organisations' responses may vary categories of people, including
quickly to distance itself from comments
of discrimination and harassment claims is
employers become aware coming under increasing pressure. Large workplace, or while working at from country to country: “In Singapore there is homosexuals, if they did not repent. In
about the recent Extinction Rebellion action
a swift recourse to defamation law if someone August, Folau began legal proceedings
earlier of potential problems. employers such as Google and Facebook have home on the clock, or for makes an adverse comment on social media.” against Rugby Australia and Waratahs
tweeted by its head of public affairs for
Germany. Airbus made it clear that it felt the
If employees don’t have any
dropped the practice in the face of substantial something that happened while In the UK, employment tribunals have Rugby under s772 of the Fair Work Act,
comments were inappropriate and didn’t
employee activism, and a number of States
valve through which to vent, have introduced legislation imposing limits on
they are representing the generally upheld unfair dismissal claims where which says it is unlawful to terminate
reflect the company's opinion. The executive
an individual has been dismissed for private employment on the basis of religion.
that can encourage activism.” the use and drafting of Non-Disclosure company. But when it's outside posts or WhatsApp messages, as there is a A crowdfunding campaign launched by
later deleted the posts and apologised for their
Agreements (NDAs) in settlement working hours, outside the tone. This highlights the need for training to
reasonable expectation of privacy. Andrew Folau reportedly raised in excess of
NATALIE GASPAR, PARTNER, agreements. Some States have also banned help staff find a way to express their own
AUSTRALIA, HERBERT SMITH forced arbitration for discrimination (although
workplace, and when it’s lawful Taggart, Partner, UK, adds that the position is AUD$2 million towards his legal costs.
views without disrespecting different opinions
conduct that doesn’t breach our likely to be different for individuals working in – and to understand when and how to make
FREEHILLS this is currently pre-empted by federal law
regulated industries or professions where a clear that the views are not those of the
favouring the enforcement of arbitration respectful workplace policies, higher standard of personal conduct is
“Generally, courts are being quite sensible on
agreements). this issue, protecting the right to an employer.
that’s far more difficult.” required.
individual’s private life and to have their own
In the UK, calls to ban NDAs outright for views, but recognising that we all have a Finally, both employers and the workforce
SURVEY RESPONDENT “Publicity around specific cases is causing
discrimination claims (with an exception for responsibility not to publish something that’s need to be mindful of the indelible nature of
The external voice people to stop and ask whether restrictions on electronic communications. Despite the
when the victim is seeking confidentiality) have damaging or defamatory,” says Emma Röhsler.
what employees can say or do are deletion of the Airbus tweets, Extinction
been resisted so far, but the UK Government “Many companies will have guidelines in place
permissible,” says Anthony Longland, Partner, Rebellion supporters had already
announced in summer 2019 that it will legislate but are very careful about saying what
Australia. The legal proceedings between the screenshotted the exchange. As Barbara Roth,
to require agreements to make clear that employees can and cannot say. Generally, this
rugby player Israel Folau and his former Partner, US, points out: “Digital sources of
disclosure to the police, legal professionals or means employees mustn’t damage the
employer (see box) has focused minds on this information are also playing a major role in the
regulated health and care professionals is business.”
issue in Australia, and there are similar adjudication and investigation of disputes.
permitted. Aware of the reputational risk
examples across the globe. There is evidence out there that was not
associated with accusations of cover-up, some
organisations are re-evaluating their use of available years ago. Social media posts are
NDAs even where their use would be within the forever, email is forever; the interactions
confines of the law. between employees and between employees
Digital platforms have created a and employers are much more easily proved
Catch 22 situation for organisations The external voice is also an opportunity for than they used to be.”
seeking to protect their public image the workforce to push employers into taking a
and reputation. The instinct of position on an issue (even where there is no
younger generations is to turn to direct relevance to the business), to criticise
social media in almost any situation. them for their failure to do so or to expose
their failure to live up to their publicised
values. Having taken a public position,
Even when they feel engaged at work and organisations can then find themselves having
heard through internal channels, this instinct is to deal with a worker prompted to publicly
hard to contain. Attempting to close down the disagree with that view. What’s clear is that
public expression of their opinions can itself employers can't put the genie back in the
fuel further public accusations of Big bottle. A failure to recognise this and plan for
Brotherism. it puts an organisation on the back foot.
//24You can also read
