Ronald Janssen is an advisor for labour market policy and European employment strategy for ETUC, the European Trade Union Confederation.
Marc Stocker is senior advisor for economic and financial affairs with BusinessEurope, the association of corporate employers.
Gerhard Huemer is director of economic and fiscal policy with UEAPME, the small and medium-sized enterprise (SME) association in Europe.
In your opinion, does it make sense for social partners to try and define common ground using 'flexicurity'? More precisely, is there sufficient common ground between partners?
Ronald Janssen: Labour market issues are social partners' core business and providing a balance between flexibility and security is an important aspect of labour market functioning. So, it certainly makes sense to try and define common principles.
Is there sufficient common ground for social partners to do so? Provided that employers do not take a narrow perspective by prioritising short-term profits over long-term solutions, there might indeed be a certain margin here. After all, employers can hardly expect that workers, who do not feel secure because of precarious working conditions, will be productive, able to engage in further learning or eager to participate in workplace innovation. However, at the same time, the ETUC observes that policymakers are often using flexicurity to focus only on more flexibility for firms without paying any attention to the security of workers, with the recent country recommendations proposed by the Commission for the 2007 Lisbon Spring Council being the latest example. The real agenda hiding behind 'flexicurity' simply seems to be the dismantling of job protection, thereby giving employers even more power to press for lower wages and reduce workers' flexibility. So, the central question is whether employer organisations, in the knowledge that they have support from some policymakers, will be willing to move into a real and meaningful dialogue on what should be the right balance between flexibility and security instead of simply pursuing narrow interests?
Marc Stocker: The ongoing discussions between European social partners in the context of our work programme 2006-2008 have broad and ambitious objectives: identifying the key challenges facing Europe's labour markets, deciding appropriate joint recommendations to the EU and national institutions and defining priorities to be included in a framework of actions on employment.
Within this mandate, we are trying to characterise what flexicurity means for European social partners. This is not an exclusive objective but it is nevertheless crucial. Flexicurity is an appealing concept because it offers a way to restore a positive link between competitiveness and social protection. Globalisation and technological progress require responsiveness to deliver their full benefits, and hence finding new ways to combine social protection and economic flexibility is fundamental to more and higher-productivity jobs.
There is also a strong political momentum in the EU, which is reflected by the Council's decision to discuss flexicurity with a view to adopting a set of common principles for national reforms. The Troika of the German, Portuguese and Slovenian EU presidencies has already issued a joint paper on the issue. European social partners could make a very positive contribution in the debate if they are able to present a common understanding of the key components of flexicurity.
Gerhard Huemer: I believe that flexicurity is more a concept to discuss current problems in labour markets and social systems than a concrete model to solve something. By and large, the flexicurity concept points out very clearly some of the main problems facing labour markets or social models in many European countries. Due to the changing economic reality, the old rules and solutions from the former industrial society no longer fit.
At the same time, it must be clear that, due to national differences, there will be no European solution and that the European social partners will not be able to solve all the problems that different member states have to face as regards labour markets and social reforms.
Therefore, the role of EU social partners must be a different one. If we are able together to analyse the different problems with current regulations, assess reform processes and provide good practices and ideas for other countries, we could play an important role in facilitating national negotiations, increasing awareness and strengthening political support for reforms. This is particularly true for issues such as indefinite versus fixed term or temporary contracts, incentives to enter or to stay in labour markets (the famous 'make work pay' concept), employability of low qualified people, precarious contracts and poverty gaps in some cases. This is exactly the aim of the current work on a joint labour market analysis, which we will try to circulate before summer.
Formally, the EU has no powers in the field of employment and social policy. Please say why you consider/don't consider the European level to be adequate for leading this discussion.
Ronald Janssen: The EU level has indeed limited powers in the employment and social policy field and the ongoing discussion should probably be seen as an attempt to rebase the European employment guidelines, which are up for thorough renewal at the beginning of 2008, on the sole issue of flexicurity. The idea is to provide governments with the argument that they should reform labour markets because 'Europe tells them to do so'.
There is, however, another approach. Let's not forget that Europe does have the power to build a level playing field to put a stop to internal-market competition that is detrimental to workers. So, when it's about forms of excessive flexibility fundamentally undermining workers' security and thus distorting fair competition on the internal market, Europe can do much more than simply benchmarking 'good' (or in this case 'bad') practice. Practically, methods such as 'bogus' self employment, endless chains of fixed-term work, discrimination of the temporary agency work force, low wage and involuntary part-time work traps should also be tackled on an European level and by European social agreements.
Marc Stocker: Social and employment policies are the competence of member states and the specific ingredients of flexicurity will vary widely depending on each country's needs. However, this does not mean that the EU cannot make a useful contribution by promoting flexicurity as a general approach to labour market modernisation in Europe. The EU dimension plays an important role and we expect it to identify priority actions, to organise the exchange of best practices and to monitor national reforms using effective instruments in the context of the European growth and jobs strategy.
What it should not seek to do is harmonise, tying member states' hands with varying circumstances and needs. For instance, the competence to modernise labour law lies first and foremost with member states and most measures need to be taken there. Taking a top-down legislative approach at the EU level would be counter-productive.
Gerhard Huemer: The EU does have the power to define minimum standards in the field of labour markets and social policies. This seems justified to ensure fair competition and avoid social dumping. Therefore, these clauses were incorporated in the internal market package 20 years ago.
Besides such minimum standards, we see neither the need (due to competition between different systems) nor the possibility (due to different starting points, different priorities, different institutional settings, different economic performances, different political cultures in member states) to solve such questions at EU level.
On the contrary, the recent economic developments (such as globalisation, technological changes, service orientation, and pace of innovation) request tailored solutions as close as possible to the responsible actors. Therefore, BusinessEurope (representing large enterprises) would like to deal with these issues as much as possible at company level, while UEAPME (representing crafts and SMEs) has realised that flexicurity issues in small companies, for instance training and employment security, cannot be dealt with exclusively at company level but need support at regional, sectoral or national level.
Could you provide us with a list of the most important elements that a European flexicurity concept should consist of?
Ronald Janssen: For the ETUC, the policy agenda representing a real balance between flexibility and security should be based on:
- A quality of work agenda to fight precarious jobs and ensure a 'workable' workplace;
- an agenda to ensure upwards flexibility (agenda of lifelong learning, skills) and worker-friendly flexibility (compatibility between work/life);
- complementing (not substituting!) the protection of existing jobs with measures enhancing the upward-mobility of workers;
- recognition of the diversity of solutions in Europe. External flexicurity may work well for a small economy with an heritage of more than 100 years of social tradition, but other countries may and should be able to choose other flexicurity models (internal flexicurity, equivalent rights approach, Latin model of internalising the costs of flexibility through tax measures);
- more investment in welfare systems;
- developing active labour-market policies investing in people;
- recognition of social dialogue and the role that social partners should be playing. This, for example, implies that European social partners, in particular the ETUC, are not bypassed, by only giving a voice to professional associations presenting the business point of view only, and;
- co-ordination of tax policies in Europe to stop tax dumping and make it possible for governments to engage and invest in ‘real’ flexicurity.
Marc Stocker: In essence, flexicurity is about moving away from a job-preservation mindset into a job-creation mindset and to reduce to a minimum periods of unemployment. It requires comprehensive national strategies with the right mix of economic and social measures to foster job creation and help people to maximise their chances on the labour market.
Flexicurity must be founded on three pillars:
- Flexible labour law with smart rules on protection against dismissals and a variety of employment contracts to answer different needs of companies and workers together with a strong commitment to fight undeclared work. This is also one of the central issues in the Commission's Green Paper on Labour Law, the launch of which has triggered a Europe-wide debate on the modernisation of labour markets. The purpose of this debate should not be to protect the principles of the past but looking constructively on how to prepare our future;
- putting into place effective labour-market policies and lifelong learning systems fostering employability and labour-market integration, which are areas in which companies are actively engaged, and;
- having an employment-friendly social-protection system and in particular unemployment insurance that links rights and obligations for the unemployed.
Again, BusinessEurope does not believe in a one-size-fits-all model of flexicurity to be implemented across the EU, but there is a way to go and processes need to be put in place at EU level to achieve the three goals listed above.
- Reintegration of undeclared work – especially at the lower end of the labour market and in labour intensive service sectors;
- the shift from 'job security' to 'employment security' concept, by trying to reduce barriers and eliminate fears of employer change;
- reduction of barriers to indefinite employment contracts for employers;
- support for the integration of young people into the labour market, the reintegration of women and for older workers to stay in labour markets, and;
- strong joint commitment of social partners to improve workforce employability.
To read a shortened version of the interview, please click here.