TRADE UNION AND AMAZON: A COMMON CONUNDRUM BETWEEN UNION AND CORPORATE BODIES

Introduction

The press, the public, and the labor movement expressed worry about Amazon’s frenzied work speed, irrational corporate culture, and appalling working conditions at the end of 2017. Since 2001, the continuing labor dispute between the United Services Union and the mail-order behemoth Amazon has been creating noticeable sparks all around the world. Recently, a failed attempt was made by the union in form of organized campaign against Amazon in the state of Alabama, U.S.A.

The results of the referendum on whether Amazon warehouse workers in Bessemer, Alabama, would form a union were announced by the National Labor Relations Board. There were 738 votes in favor and 1,798 votes against it. Although this was unquestionably a bad news for the union’s effort, it does not rule out the possibility of future Amazon campaigns being successful; or does it? The present article analyses the opinion both in favour of and against the concept “Unionisation” and the trend the world seems to follow in near future.

The Amazon workers’ campaign was not a spontaneous revolt. It was the result of a coordinated expansion of trade unions’ associational strength in the shape of a two-year organising project of the United Services Union, albeit it was probably not intended. Within two years, nearly a thousand workers had joined the union, a huge amount considering the high percentage of fixed-term contracts and rapid staff turnover, and it was possible to develop a long-term activist structure that exists even today. Amazon’s strict regulation of workers’ daily activity, interference in workers’ right to organize and social media claims of workers of being made to pee in bottles to avoid wastage of time in bathroom had been at the apex of criticism from labor organisations worldwide. Even the Amnesty International in its public statement dated October 13th, 2020, called on Amazon to genuinely respect the workers’ right to unionise, organize and protect their right of speaking against any violation of human rights issue in the workplace.

Glance at some other Anti-Union Campaigns

Nissan began producing automobiles in the United States in 1983 at a factory in Smyrna, Tennessee. Nissan employees attempted to form a union within a few years. In 1989, 1997, 2000, and 2001, the United Auto Workers (UAW) suffered four major setbacks during frequently contentious organising campaigns at Nissan’s Smyrna plant. Nissan, according to the UAW, utilised many illegal pressure methods to persuade its workers not to support unionisation, including threatening to relocate the plant to Mexico if workers voted to unionise.[i]

Nissan invested a significant amount of money in a counter-campaign that comprised a local advertising blitz that included television commercials, print and radio ads, and Spotify adverts. Nissan’s investment to stay union-free in the traditionally union-free South teaches employers an important lesson: regardless of geography or organising history, do not be complacent about the threat of unionisation.

Since T-Mobile, which is owned by Deutsche Telekom AG, initially entered the US telecom market in 2002 with the help of the US union, the Communications Workers of America (CWA) has attempted to organise the company. T-Mobile, on the other hand, has waged a vigorous anti-union effort, including the formation of a business union, T-Voice.[ii] T-Mobile management dismissed the concept that ILO law favours union access or employer neutrality when challenged with criticism of the anti-union campaign from members of the US Congress, arguing that the CFA had specifically recognised companies’ rights to campaign against unionisation. Furthermore, it alleged that the CWA was requesting preferential treatment from T-Mobile management by requiring access and neutrality, which would be a breach of both US law and ILO jurisprudence.[iii]However National Labor Relations Board judge has ruled against the T-Mobile’s company controlled labor organization.

So, the question that now arises is whether this sentiment to unionise is just restricted to USA or is there any rising sentiment in other parts of the worlds where Amazon operates?

The presence of trade unions at Amazon in Italy is low. There are 250–400 members, according to trade union estimates, mostly organised in the three main trade unions, the Confederazione GeneraleItaliana del Lavoro (CGIL), the Confederazione Italiana   (CISL), and the UnioneItaliana del Lavoro (UIL) (UIL). Cattero and D’Onofrio have concluded that Amazon does not need to use specific anti-union defence methods in Italy because the significant share of temporary workers “already acts as an effective barrier to union enrollment.”[iv] Despite this, employees in Piacenza joined for the first time in strike activities organised with Germany’s Ver.di on “Black Friday” in November 2017. When the CGIL signed an in-house collective agreement to govern weekly working hours in Piacenza in May 2018, it made international headlines. The UNI Global Union called the accord “historic” because it was the first collective bargaining agreement of its kind struck at Amazon.

Yet again in Germany, the trade union “Verdi” had called out for 48 hours strike at six locations all over the country to protest against the wage dispute and push Amazon to negotiate collective bargaining agreement. Voices were also raised by Unite Union, a London based organisation, to allow workers working in Amazon centre of the UK and Ireland to join the union “without fear and obstruction.”

In India the 24-hour planned strike took place at several Amazon warehouses in cities across Bengaluru, Delhi, Hyderabad and Pune. The walkout, according to the Indian Federation of App-based Transport Workers (IFAT) and Telangana Gig and Platform Workers Union, hopes to put collective pressure against the company’s decreased compensation rates, asking for an increase in insurance claims, and the removal of the know-your-customer (KYC) process as a requirement for clients.

Now more than ever, it is substantial that the idea to unionise and organize against the ‘alleged’ workplace practices of Amazon is shared by many unions all over the world. But this is just one side of the coin. To reach a conclusion, it is necessary and more than important to understand Amazon’s or to say any corporate structure’s argument against unionizing with regards to the growing sentiments in favour.

Corporate’s Idea and Arguments Against Organising and Unionising

Corporate and businesses believe that the general public harbors a misconception about labor unions representing the interest of workers rather they operate against their own best interests.[v] The very idea that collective bargaining shields the workers from being exploited by unscrupulous corporations is rejected by the business class and criticizes unions.[vi]

  1. Labor unions tend to monopolise as workers lack the freedom to join (or not join) union democratically as they more than often are either not offered the option of not joining or joining a different union altogether which leads to labor unions becoming monopolies at their respecting operative fields. Having no competitors, they have absolute freedom in collecting any amount in name of dues. Being a monopoly, chances are very high that they are misused by unethical businessmen to avoid dispute and the laborers have little or no option to follow union’s order, even if it is against their best interests.
  2. Even if they are not corrupt or do not indulge in unethical practices, unions tend to have a harmful impact on society by increasing inflation. They have a habit of negotiating for unreasonably high compensation despite no gain in output. This pressurizes the government to generate more money since this is occurring throughout the economy. As a result, the greater salaries earned by workers are now meaningless, as real prices have risen and real wages have plummeted as a result. Hence, by forcibly raising salaries, unions may believe they are benefiting workers but they are merely contributing to inflation.
  3. The competition in market is very tight and increases everyday which means that to sell a product, businesses must compete with both domestic and foreign suppliers. Increase in labor costs due to unions’ regular interventions and their unreasonableness cannot be passed on to the customers, so the business chooses automation and mechanization of their process as it is more efficient and less expensive. Paying workers a severance and continuing mechanized operations is much more cost effective in the long run for the businesses. Hence, laborers force their own layoffs.
  4. American automobile industry specifically believes and has witnessed decimation in the American workforce due to labor unions. America is considered to be the birthplace of the automobile industry with companies like Ford, GM, and others being among the first ones to set up shop in the United States, it has now become the world’s largest consumer base too when it comes to autos. The firms, on the other hand, are on the verge of going bankrupt and have to be bailed out by taxpayers. The only solution to it is found in shifting the manufacturing industry units outside America and then importing the vehicles back which would be cheaper than production in home country as almost every basic industry from steel to rubber is represented by unions, which raises the price.
  5. By the 1990s, practically every industry in the country had had enough of labor unions’ repressive tactics. Win-win situations were never appealing to labor unions. They were more concerned about benefiting at the expense of others. Fiber optic cables and technology transformed the world because of this. Businesses started outsourcing their work as it was found to be extremely inexpensive either due to better currency exchange rate or the relaxed or non-stringent labor unions in the developing or third-world countries. Therefore, even today, outsourcing is an offer too good to pass.

Millions of people lost their employment as a result of the unreasonable pay increases, as firms discovered feasible alternatives in offshore locales. Hence, to summarise, labor unions do the polar opposite of what they are supposed to accomplish. They end up harmingworkers’ interests altogether instead of safeguarding them.

Allowing Unions and Right to Organise – Arguments in ‘favor’

Over the other end of the bridge, it is also pertinent to analyse the importance of Unions and right to organize[vii] in protecting workers from the vulnerabilities of businesses which thrive on capitalist ideology. These unions are non-commercial associations, working class communities with embodiment of rights. 

  1. Unions provide collective voice to the workers and help them keep their concerns before the management. It is practically impossible for a single employee/worker to raise a voice or concern against their employer without facing the risk of getting fired. Unions act as a channel between the management and workerers by providing them an adequate forum to express discontentment rather than quitting.
  2. Unions accomplish better wages to its member-workers. The members reap the benefits of collective negotiation in the form of better wages which are significantly higher than those of non-union members. This has also paved the way for millions of employees to harvest pioneering perks such as health benefits, pensions, medical care, etc.
  3. Interestingly, better and higher wages have a positive impact on productivity, quality, and innovation; a simple theory of positive incentivisation of economics applies here too. Back in 1914, Henry Ford started paying his employees $ 5 per day, double of what wage was prevalent in the auto industry then – the decision of his allowed him to lower the price of Model T and significantly increased benefits and profits.[viii] Besides it also helped America’s working class to shift to the middle class. Hence, the unions are good in uplifting the economy as they contribute in fostering a competitive high-wage, high-productivity strategy.
  4. More motivated workers are aided by workplace fairness and compensation that reflect market performance. Given today’s globalisation and competitiveness demands, labour unions have responded by raising productivity and embracing new technologies.
  5. In the political sphere, unions have been pressing for better minimum wages, health care, pension schemes and overtime salaries. Workers’ voices can help balance out the strength of business interests when they are able to band together in a democracy. Unions have played a pivotal role in the passage of some very important legislation in past few decades which has benefitted all the stake holders.

Conclusion

Here appears to be two hopeful lessons from this disappointing story that America and the rest of the world can draw. First of all, the convention now argues that companies need strong unions. Secondly, the excitement at the Alabama ballot shows how far feeling moves against big business and towards work in the capitalist heartland.

Although Amazon still refuses to conclude a collective agreement with the trade union, organised workers have significantly improved working conditions, such as a significant rise in wages and the payment of a Christmas Bonus, since the start of trade union activities. Further improvements have also been achieved to workplaces such as improved safety or ergonomics such as height-adjusting tables, decentralized common rooms and abolishing unpopular feedback talks, at least in some FCs.[ix] The agreement, however, regulates content which, while vital, has little impact on some of Amazon’s most visible shortcomings in terms of work organisation and human resource management.[x]

Finally, it is interesting to note that the recent judgement of UK Supreme Court in Uber BV v. Aslam[xi]which brought the Uber drivers (gig workers) within the scope of Section 230(3)(B) of the UK Employment Rights Act, 1936, entitling them to basic workers’ rights such as minimum pay, holidays, workers’ compensation, sick leaves  and the right to unionise. This would serve a pivotal factor in the future in forming Unions in the corporate houses. This long debate seems to settle very soon as individuals and courts have now started recognizing the right and importance of forming unions so as to collectively voice the concerns of the working class and provide a suitable alternative to employers in addressing their demands or negotiating with them. We definitely need a win-win situation here!


[i] Minchin, T., 36(2) They Didn’t Want to Be Union: Southern Transplants and the Growth of America’s “Other” Automakers, Australasian Journal of American Studies, 35-66(2017), Available at https://www.jstor.org/stable/26532933 (last accessed on 01/09/2021).

[ii] Logan, J., Lowering the bar or setting the standard? Deutsche Telekom’s labor practices in the United States, American Rights at Work, (November, 2009).

[iii] Daily Labor Report (2015a), ‘Congresswomen tell Merkel of T-Mobile harassment policy concerns’, November 24.

[iv] Cattero B. and D’Onofrio M., Organizing and Collective Bargaining in the Digitized “Tertiary Factories” of Amazon: A Comparison Between Germany and Italy. In: Ales E., Curzi Y., Fabbri T., Rymkevich O., Senatori I., Solinas G. (eds),Working in Digital and Smart Organizations, Palgrave Macmillan, 158, (2018).

[v] Apicella, Sabrina and Hildebrandt, Helmut, 13(1) Divided we stand: reasons for and against strike participation in Amazon’s German distribution centres, Work Organisation, Labour &Globalisation, 172-189 (Spring 2019).

[vi] See Morgon O. Reynolds, Making America Poorer: The Cost of Labor Law,187-88(Cato Institute)(1987).

[vii] Freeman, R. (1976). Individual Mobility and Union Voice in the Labor Market. The American Economic Review, 66(2), 361-368. Available at http://www.jstor.org/stable/1817248 (Last accessed on 06-09-2021)

[viii] Daniel M. G. Raff, & Summers, L.,5 (4), Did Henry Ford Pay Efficiency Wages?, Journal of Labor Economics, (1987) S57-S86. Available at http://www.jstor.org/stable/2534911 (Last accessed on 06-09-2021)

[ix] A feature of Amazon’s control regime are the so-called “feedback talks,” in which managers and employees meet with a view to optimizing the workers’ performance. The problem is that these talks are based on performance data collected by digital devices like hand-held scanners operated by both the pickers and the stowers.

[x] Supra at note 4.

[xi] Uber BV and Ors v. Aslam and Ors., [2021] UKSC 5.


Mehul Mayank, 4th Year, NUSRL Ranchi.

Picture credits: iPleaders


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