How is technology changing employer-employee relationships?

A recent Padua Labour Court decision affirmed that the traditional concept of subordinated relationships between employers and employees should be redesigned to reflect how changes in technology are reshaping company organisation. Evolving technology is giving more relevance to automated production processes which produce measurable data than the formal relationship between employers and employees that is traditionally based on a hierarchy. This shift is becoming particularly apparent where businesses engage external workforces, which are connected to their organisation via devices that generate and record data relating to work tasks.

In this case, a provider's employees were engaged to perform picking activities in the principal's warehouse. The employees brought a labour action in order to be recognised as employees of the principal. The claim was based on an allegation that the provider's employees had been equipped by the principal with optical readers and headsets with microphones that used voice software to communicate and receive the identification data of the goods that were to be picked. The voice software also recorded any task individually performed by the employees, which enabled the system – which belonged to the principal – to associate an employee's name code with the goods that were managed.

According to the Padua labour judge, the pickers were the provider's employees only from a formal perspective. In reality, the pickers were subordinate to the principal, which provided them with working instruments and gave them direction and work instructions through dedicated software that was able to record data generated by their working activity as part of the organisation's information flow.

This decision is one of the first in which an Italian labour court has considered whether the traditional concept of employment relationships is still valid or if employees' and employers' rights should be considered differently in light of technology's impact on organisations. The Industry 4.0 trend towards automation means that production is increasingly being designed and measured on the value of the data and information generated, rather than traditional production factors such as the workforce. Interested parties should watch this space for future developments.

For further information on this topic please contact Francesco Pedroni at Stanchi Studio Legale by telephone (+39 02 546 9522) or email (f.pedroni@stanchilaw.it).