New Technologies, Old Problems: Collective Bargaining Agreements and Technology Changes in the Israeli Banking Sector

Thirty years ago, in 1986, a collective agreement in Bank Leumi dealt with ending the work of perforators in an Israeli bank due to new technologies.1 The phenomenon of replacement of labor by technology in general, in the bank sector in particular, is not new. Nonetheless, new technologies such as digitalization, robotization and artificial intelligence pose new challenges to governments, unions, corporations, and employees. Moreover, in the last few decades many states have scaled down their involvement in the labor market, privatized their public job services and dramatically cut income support to the unemployed. At the same time, unions across all OECD countries have been facing a sharp decrease in memberships and have lost much of their power. These trends raise questions regarding states' and unions' ability to assist vulnerable workers in general, workers who are being replaced by technology more specifically.This article addresses the Israeli social response to the displacement of labor by digitalization, robotization and artificial intelligence. It studies the governmental programs, which aim to retrain or reskill workers who are being displaced by technology. After studying the governmental programs, the article will demonstrate the capacity of trade unions to address the effects of new technologies by drawing on the case study of employment policies and collective agreements in Israeli banks. I have chosen to focus on the case study of Israeli banks for several reasons. First, Israeli banks have introduced many technological changes in recent years. Second, the Israeli Supervisor of Banks encourages customers to use digital options instead of coming to the branches. Third, in recent years Israeli banks have been downsizing the number of their branches as well as the number of their employees. Fourth, in Israel the bank sector is highly unionized. In the five big Israeli banks, employment policy is regulated through collective agreements that by law are open to public scrutiny and are published on the Ministry of Labor's website. The case study of the bank sector in Israel is therefore useful for examining unions' and employers' response to the introduction of new technologies.