In this paper from the Robert Schuman Foundation, Philippe Garabiol outlines the advantages and disadvantages of the existing fexicurity models in Europe in order to define common principles for a European labour market.
The Commission published a green paper on “modernising labour law to meet the challenges of the 21st century” in November 2006. Following this report, it released a communication on flexicurity and hopes to define and adopt a common set of principles on flexicurity by the end of 2007, recalls the author.
European integration has supported growth in member states only when EU policies came with a deep transformation of national systems, he notes. The European Union now wishes to implement a new policy aiming to modernise labour rights in order to relaunch growth in the EU, he adds. In fact, the Commission considers growth to be dependent on market reactivity.
Therefore, the different labour regulations equate to legal barriers for the labour market, just as border protection was a barrier for the internal goods market, explains Garabiol. Despite the heterogeneous character of the European labour market, the Commission considers it to be important for member states to implement a set of common principles in the framework of the implementation of the Lisbon Strategy, he continues.
He cites the example of Denmark, which appears as “a model of reference” for labour market reforms. The Danish system combines flexibility and security, as it is characterised by adaptable labour regulations and weak employment protection, notes the author. In parallel, some significant efforts have been made in the area of lifelong learning and to improve the social security system.
Another major innovation was launched in Austria in 2003 with the enforcement of a new system of severance pay that obliges the employer to deposit a fixed amount of money in an individual account each month. The employee can take this money if he is laid off and retain his rights if he brings an end to his contract himself. This new system therefore facilitates workers’ mobility.
According to the author, Italy remains the most innovative member state on flexicurity through the “para-subordination” system. This type of contract extends the act on individual labour disputes to agents, commercial representatives and other similar relationships involving continuous, co-coordinated and personal work, even if there is no subordination. This gives more flexibility to workers.
Garabiol finally makes a number of recommendations for a set of common principles for the modernisation of the European labour market:
- Firstly, employees should be guaranteed to keep the rights they acquired in a previous employment situation and temporary contracts must not remain “second-category” jobs;
- Temporary work should rest on the equality principle;
- However, the legal framework for contracts can be more flexible for SMEs;
- Lastly, another element of the set of common principles for the modernisation of work would be the acknowledgment of the contract of para-subordination.