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Flexi-Security and the ETUC. UNI- Europa conference on Flexicurity, Copenhague, February 2008 Ronald Janssen, ETUC. Flexi-security:The ETUC’s starting point. Definition: Policies that at the same time and deliberately enhance both the flexibility of as well as security on labour markets.

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Flexi-Security and the ETUC

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Flexi-Security and the ETUC

UNI- Europa conference on Flexicurity, Copenhague, February 2008

Ronald Janssen, ETUC


Flexi-security:The ETUC’s starting point

  • Definition: Policies that at the same time and deliberately enhance both the flexibility of as well as security on labour markets.

  • Philosophy: Thinking flexibility and security together: Business as well as labour are in need of security as well as flexibility


Why Labour needs flexibility

  • Workers that are mobile and skilled have a better bargaining position

  • They will not accept the ‘blackmail’ to cut wages in order to subsidize jobs and firms that have failed to innovate

  • A job for life’ (if it exists) not always a perfect guarantee

  • Internal functional flexibility (with multi-skilling, rotating jobs, training) safeguards jobs through innovation

  • Flexibility and autonomy in working time


Why Business profits from a secure work force

  • Stable jobs are good for productivity

  • A secure work force: open to innovation and change

  • A secure work force: willing to share its (tacit) knowledge (thé competitive advantage in today’s world!)

  • Workers will only be willing to move between jobs if the economy is built up of good and stable jobs offering secure work cntracts


A stable workforce is a productive workforce


Implementing flexi-security: ‘Easier said than done’

  • What all too often happens is ‘flexi-security’ being hijacked by one particular interest

  • Resulting in a ‘polluted’ debate, in ‘unbalanced’ policies, in ‘winner takes it all’ strategy


Where’s the balance in the following policy proposal?

  • Reduce level of job protection and make it easy and cheap for business to fire workers

  • Benefits harm incentives to take up a job, so they need to be ‘adequate’,(not generous) and ‘modern’ (‘workfare’ and in-work benefits).

  • Lifelong learning: Employers already pay much, time for workers to invest their time

  • Easy firing of workers will create new jobs, so no need for accompanying job and growth friendly economic policies


In other words…

  • …if workers want security, let them ‘eat their cake’ and take up a new job.

  • … if we want to tackle precarious work and get the ‘outsiders’ in, then ‘insiders’ need to give up on thier well protected jobs


What would be the consequences of unbalanced flexicurity?

  • Higher inequality

  • Not more but less jobs

  • Good, regular jobs, replaced by insecure, precarious ones

  • In other words, a new ‘insiders/outsider’ divide with managers and supervisors gaining a lot and this at the expense of ‘casualized’ labour.


‘Easy firing’ tends to increase inequality


What is behind this?

  • ‘Easy firing’ reduces worker motivation, loyality,motivation

  • To maintain more productivity, more supervision is necessary

  • Higher demand for managers: ‘The sky becomes the limit’

  • How to finance them? Compress wages for the rest of workers (possible because of reduced job protection).


More jobs ?


European labour markets: Too rigid?


ETUC’s proposals for balanced flexicurity policy

  • General strategy: Get business back into the equation by putting the promotion of quality of jobs at the heart of the strategy ( implies stable employment,collective bargaining rights,…)

  • One key discussion: No ‘blind’ but ‘smart’ reforms of job protection systems and labour law


At the heart of the flexicurity discussion: Job protection systems

  • Do not throw away the ‘baby with the bathwater It’s not as simple as giving up on job protection in exchange for employment security

  • Job protection and employment security are not substitutes but complement each other

  • It’s about using robust labour law and robust job protection as a powerful platform to bargain employment or transitional security


Advance notification (months) for 4 year tenure workers in case of collective dismissal


Sweden: Career transition agreement

  • Long period of advance notification used to provide support for workers

    • All firms pay into (sector) fund

    • From the moment of notification, sector fund steps in into firm to provide job counselling, job search help, re-training, paid internships with another employer, financial support for setting up a new business


Older workers in Sweden

  • ‘Last in, first out’ principle entrenched in Swedish labour law

  • But: Collective agreements can deviate from this

  • Result: Trade unions and business striking deals for transitional security and severance pay for older workers


Netherlands: Dual EPL system

  • Dual system of job protection: Either firm pays (a lot), either firm asks prior permissal to fire to regional labour office

  • In latter case,there’s an opportunity for trade unions to bargain a collective agreement on transitional security for workers to be fired.


Joint recommendation of European social partners on job protection and labour law

  • Recommend ‘to review, and if neccesary adjust, the design of labour law and job protection

  • ‘with a view to’

    • Ensure balance between flexibility and security. Provide adequate security for all contracts

    • Develop complementary employment security measures

    • Enhance legal certainty with regard to scope, coverage of labour law

    • Respect the European Social Aquis

    • Promote stable employment relationships

    • Improve work/life balance


Where are we now?

Common European Flexicurity principles: A number of good things …

  • Internal flexicurity as important as external flexicurity

  • Each country to decide its own arrangement

  • Improve transition from unstable to stable and legally secure jobs (Implicit target: stable jobs)

  • Aware of financial and budgetary limits


Where are we now?

  • … but also some questions?

    • Where has ‘security’ gone to?

      • Contractual arrangements to be flexible and ‘reliable’

      • Adequate social benefits providing incentives and support for job transitions

    • If ‘new jobs’ so important, why are growth friendly macro economic policies and innovation policies not being mentioned?

    • Impression created that more exceptions in labour law are necessary to provide ‘stepping stones’ for ‘groups at risk’.


Conclusion

  • The ‘flexicurity’ battlefield is moving from the level of European principles…

  • ….to national level implementation

  • Watch out for Commission/Council’s country recommendations..

  • … and go ‘on the offensive’ instead


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