12 February 2019

The European Social Union: addressing challenges on the labour market

The success of the EPSR – and by extension the development of the ESU -  depends upon engagement and ownership by governments and social partners in member states.

*Caroline de la Porte Caroline de la Porte is Professor MSO at the Copenhagen Business School

 


The contributions in this forum address fundamental questions about the functional, operational, policy specific and free-standing normative-political justifications of a ‘European Social Union’ (ESU), of which the European Pillar of Social Rights (EPSR) is an important component. As noted by Vandenbroucke,  “(…)the expression ‘Social Union’ invites us to propose a clear-cut institutional concept (…) A European Social Union is not a European Welfare State: it is a union of national welfare states, with different historical legacies and institutions.” Ferrera provides a framework to identify and characterize the logics of interaction, resources and levels of governance that would make up the ESU. The ESU does not embody the ambition to develop a European welfare state, but rather, to make use of the resources already available at EU level within the existing institutional and legal framework.

In the launch of the EPSR, Jean-Claude Juncker argued that fair, inclusive and empowering welfare systems and labour markets are crucial for boosting productivity, strengthening social cohesion and increasing standards of living (European Commission, 2016). The solemn declaration adopted in Gothenburg in November 2017 embodies high symbolic value, underlining the member states’ commitment to the 20 principles of the EPSR. While the declaration is not legally binding, the principles are to be implemented by various instruments, particularly social benchmarking and policy coordination, but also (updates to) directives, which are legally binding. Since then, the activity at EU level to focus on moving from intentions to delivery has been extensive. This momentum – that contributes to building the ESU – has to be maintained or even strengthened, following the change of guard at EU level later this year. I argue that the EU’s activity is particularly relevant for politically sensitive areas, such as work-life balance, and cross-border challenges, such as changes to the labour market, which lead to an increase of precarious workers.

As a long-term analyst of EU social policy, I argue that one of the undervalued aspects of EU’s activity is its capability to contribute to solving labour market and welfare state challenges, that are common to the EU’s member states. Since the mid-1990s, the EU has developed and used its capability to diagnose major policy challenges (through high quality comparative data), to propose common EU policy solutions to those challenges (on the basis of best practices identified among the EU member states), and to recommend country-specific policies (through policy coordination) to support each member state in its on-going reform trajectory. Pensions, (active) labour market policy, health care reform, and anti-poverty policy are areas where the EU, in collaboration with member states and social partners, has successfully applied this type of resources, based on finding the best solution to common problems. In other words, the EU’s strongest resource consists of comparative data and knowledge, and with it the exchange of (best) experiences and country-specific recommendations. As underlined by Matsaganis in his contribution, it has never been more relevant to exchange best practices, due to challenges, which member states are not able to tackle on their own. In this contribution, I focus on the EPSR’s aims regarding two major labour market challenges: reconciling work and family life, a sensitive policy issue on which there is often deadlock in member states, and enhancing protection for the ‘most flexible non-standard work and new forms of work’ (hereafter ‘the most flexible new forms of work’).

During the last decades, there has been a dramatic increase in female labour market participation across the EU. According to Eurostat, the total female employment rate in the EU (from 20 to 64) has increased from 61% in 1997 to 72% in 2017 (Eurostat, labour force survey). This trend has led to an increase in demand for adequate parental leave schemes and child-care among citizens. This issue is sensitive politically in member states because it concerns values about child education and care, which are central in the private sphere.  At the EU level, member states – such as Sweden – that have successfully introduced adequate leave schemes for parents, as well as high quality, accessible and affordable child-care are seen as models to be emulated (see de la Porte, 2019). Based on the knowledge of best practices in Sweden, the EU promotes leave policies targeted at the second carer as well as accessible, affordable and high-quality child-care, because such policies facilitate the combination of work and family life. From a gendered perspective, such policies would also reduce the labour market-related penalty for women (in terms of career progression, working time as well as wages) (Esping-Andersen, 2007). In the framework of the EPSR, an important breakthrough has been made in this area: the revised directive on work-life balance – agreed provisionally between the European Parliament, the Council and the European Commission in January 2019 – encourages more gender equalizing leave policies. Based on knowledge from best practices, the directive introduces paternity leave for fathers/equivalent second parents, for at least ten working days, to be paid at least at the level of sick pay, and it earmarks two out of (at least) four months of parental leave for each carer, compensated at a level decided in member states.

Similarly, concerning child-care, the EU has, based on comparative data and knowledge, as well as best practices in Denmark and Sweden, encouraged member states to invest in high-quality early childhood education and care (ECEC). More specifically, in 2002, the member states agreed on EU wide benchmarks for child-care in the European Employment Strategy: 33% under three and 90% of children from three until mandatory school age should be in ECEC by 2010. It is to a great extent because of EU pressure to extend ECEC, that member states have made progress in this area. In the EPSR, an assessment of progress in the development of ECEC across member states has been made. The report highlights that there are major differences among member states in relation to the development of ECEC (European Commisison, 2018). In the implementation of the EPSR, EU benchmarks will become more ambitious. Member states where ECEC is underdeveloped should be supported by the EU. Other than country-specific recommendations, the EU could consider earmarking EU social funds to help member states develop ECEC.

In short, for reconciling work and family life, EU activity, through the revised directive on work-life balance, as well as EU policy coordination, has supported member states in developing adequate work-life policies. This exemplifies that the EU has and is contributing to the ESU, through knowledge-exchange, comparative data, benchmarking, best practices, and country-specific recommendations.

A second major challenge that needs to be addressed is the increase of ‘most flexible new forms of work’, which will continue to increase across the EU in the coming decades, due to the digitization of some forms of work, that has been labelled the ‘4th Industrial Revolution’. As noted by Matsaganis, this is a cross-border issue which member states cannot successfully tackle on their own. The ‘most flexible new forms of work’ are associated with low skills, no comprehensive access to training, little information about working conditions, and virtually no job security. Put differently, these types of work –  such as casual work, zero hour contracts, voucher-based work, platform work – are precarious in terms of job quality, labour rights, as well as social protection. As part of the EPSR, the update to the ‘written statement’ directive aims to enhance protection for the increasing number of workers on such atypical contracts, which are flourishing in the digital economy.

The literature on segmentation and dualization (Hipp et al., 2015; Emmenegger et al., 2012) documents that non-standard workers do not have full access to social insurance coverage and are vulnerable regarding access to training, wage increases and transition to open-ended contracts. The EU directives on part-time, fixed-term and temporary agency work cover specific types of workers concerning pay, access to training and the prospect of obtaining an open-ended contract. Based on the principle of anti-discrimination, workers on such contracts must be treated equally (relative to the number of hours worked) to a comparable permanent worker. This has led to changes in member states, particularly those with rigid labour markets, both to enhance protection for workers on atypical contracts, but also to decrease protection for permanent workers (de la Porte and Emmenegger 2017: 300–301). However, ‘most flexible new forms of work’ are not covered by these directives. Twenty per cent of new jobs since 2014 have been in ‘non-standard’ employment not covered by the part-time, fixed-term and temporary agency contracts (European Commission, 2017a). The proposed update to the ‘written statement’ directive 91/533/EC proposes a more open-ended and inclusive approach to the notion of ‘work’, ‘worker’ and ‘employee’, whereby even workers in such precarious ‘non-standard’ employment would be better protected (European Commission 2017b). The update would increase obligations for employers to inform workers of their work, in a written form and in a timely manner. This includes information on the place of work, type of work, working time, remuneration, amount of paid leave, the institution receiving the social security contributions, training entitlement and the procedure for terminating employment. The draft directive stipulates that workers would have the right to request a more secure job and to receive a written reply from the employer. Whilst the revision of the ‘written statement’ directive is still at an early stage, it is crucial that member states and social partners prioritize the directive, and to exchange best practices on this topic, in order to avoid a growing number of workers in very precarious working conditions.

The EU’s activity to help member states and social partners meet social challenges through the EPSR and in building the ESU needs to be followed through in the coming years, in order to counter major gender and labour market challenges. The two EU initiatives delineated briefly here show that progress is being made rapidly. The work-life balance directive and the proposed directive targeted mainly at ‘most flexible new forms of work’, could have positive social effects. However, the success of the EPSR – and by extension the development of the ESU –  depends upon engagement and ownership by governments and social partners in member states. While the EPSR certainly will leave a footprint at the EU level, the implementation of most principles will be determined by the member states’ own political agendas. Political leaders across the EU should support the EPSR and the idea of an ESU as a complement to the single market and EMU. They should use knowledge, comparative data and best practices in order to develop these policies, as they have in the past.

Photo credits CC Flickr: Colin McCloskey

References:

de la Porte, C. (2019), “The European Pillar of Social Rights meets the Nordic Model”, European Policy Analysis for the Swedish Institute for European Policy Studies (SIEPS), 22 pp, downloadable from: http://www.sieps.se/globalassets/publikationer/2019/20192epa?.

de la Porte, C. and Emmenegger, P. (2017), de la Porte, C. and Emmenegger, P. (2017) “The Court of Justice of the European Union and Fixed-term Work: Putting a Brake on Labour Market Dualisation?”, Journal of European Social Policy, 27(3): 295-310.

Esping-Andersen, G. (2007), The Incomplete Revolution, Polity Press.

European Commission (2016), Launching a consultation on the European Pillar of Social Rights. COM (2016) 127 of 8 March 2016.

European Commission (2017a), Commission Staff Working Document accompanying the second phase consultation of Social Partners under Article 154 TFEU on a possible revision of the Written Statement Directive (Directive 91/533/EEC). SWD (301) final.

European Commission (2017b), Proposal for a directive of the European Parliament and of the European Council on transparent and predictable working conditions in the European Union. COM(2017) 797 final.

European Commission (2018), Report from the Commission on the development of childcare facilities for young children with a view to increase female labour participation, strike

a work-life balance for working parents and bring about sustainable and inclusive growth in Europe.

Ferrera, M. (2018), ”Crafting the European Social Union: Towards a Roadmap for Delivery”, http://www.euvisions.eu/crafting-the-european-social-union-ferrera/.

Matsaganis, M. (2018), “Snakes and Ladders on the Road to ESU”, http://www.euvisions.eu/snakes-and-ladders-on-the-road-to-esu-matsaganis/.

Vandenbroucke, F. (2018), ”The EU social pillar: from promise to delivery – Introduction to the European Social Union public forum debate”, http://www.euvisions.eu/europea-social-union-public-forum-debate-vandenbroucke/.

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