How Technology Is Reshaping Workers’ Relationship to Work

UK Policy Prosperity

How Technology Is Reshaping Workers’ Relationship to Work

Posted on: 25th November 2021
Jeegar Kakkad
Head of Productivity and Innovation

Technology is developing at an exponential rate, creating new ways for businesses and individuals to adopt more non-traditional models of work. Yet the winner-takes-all dynamics of new technologies risk shifting the balance of control in favour of platforms and businesses and away from individuals. This revolution demands the UK modernise its system of worker rights and representation to better share risk and ensure these jobs can contribute to productivity and growth in an increasingly digital economy.

Currently, our labour market institutions, systems of taxation and methods of enforcement are adapting only incrementally in the face of exponential technological change. This is creating fissures between the changes enabled by technology and the norms and laws that govern the world of work.

Earlier this year the UK Supreme Court ruling found that Uber exerted significant control over drivers’ pay, workflows and performance, and hence that Uber drivers should be classified as workers, rather than as self-employed. This entitled them to the national minimum wage, paid annual leave, rest breaks and protection against unauthorised deductions from pay. Yet while it sets precedent for further tribunal cases, the decision does not apply to individuals on other platforms whose working conditions are not that different from Uber drivers.

Consequently, there are three areas of growing concern about the emerging world of work: individuals’ ability to control their own pay, working conditions and career progression.

For atypical, non-traditional forms of work, the flexibility in hours and work is seen as a potential benefit to both businesses and workers. In practice, new technologies allow businesses and platforms to flex labour around changes in customer demand, with little input from workers. In addition, the use of algorithms to adjust pay structures creates constant insecurity about the expected pay due from working a particular set of hours. Another major concern is that almost nine in ten workers on freelancer platforms have had work rejected, and so were not paid for their work. As such, the roles do not always guarantee a minimum level of pay.

Technology is also being used to control working conditions. The tight control over hours means that 37% of UK workers receive less than a week’s notice of their working hours, with 7% receiving less than 24 hours' notice. In addition, a combination of real-time data collection, AI, and machine-learning analysis allows employers to hire and fire, monitor and direct their workforce on a continuous basis, while delegating responsibility for decisions to algorithms. In addition, the use of automated rating mechanisms, the gamification of work and incentive-based mechanisms, become increasingly effective in controlling disparate groups of workers and tends to fall outside the scope of traditional legal concepts of employer control.

These models of work may also not fully utilise individuals’ skills and experience, increasing the risk of skills mismatch, limiting opportunities for training and skills acquisition, and therefore hampering pay and productivity growth. For example, on many platforms, workers are unable to include any information on their previous work in their profiles, and any ratings or reviews on one site are not portable to others. Technological design, therefore, risks locking individuals in atypical work into particular platforms, minimising cross-platform competition, and giving platforms power over an individual’s access to work.

Addressing these imbalances should not simply be about constraining or regulating technology, or adopting overly rigid employment laws: the dynamism of our economy relies on flexibility, competition, and technological innovation.

Rather the UK needs to create a new framework for worker rights and representation so that the benefits of technological change do not accrue solely to businesses and platforms at the expense of workers.

The first step is to understand the degree to which atypical work is expanding in the UK, as well as the motivations and experiences of workers in a more decentralised labour market.

Second, the UK needs to modernise and better enforce employment law to make labour markets less insecure, as well as rethink how regulationtaxation and the safety net can deliver both flexibility and security for workers and sustainable operating models for businesses.

Third, the UK should look domestically and internationally at how to strengthen worker representation in a more decentralised labour market and in fast growing sectors. This should include exploring the role of modern, adaptable unions and the role of technology itself, where the growth of ‘WorkerTech’ is helping individuals to leverage their collective weight.

As technology evolves and the numbers in atypical work grow, the UK will need to modernise its approach to employment rights to ensure that these jobs are contributing to productivity and growth. Failure to do so could see further rises in insecurity and inequality, while getting it right means having a labour market that is as dynamic as the technology reshaping it.

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