6 Flexicurity
| (28747)
10255/07
COM(07) 359
+ ADDS 1-2
| Commission Communication: Towards Common Principles of Flexicurity: more and better jobs through flexicurity and security
|
| Legal base | — |
| Document originated | 27 June 2007
|
| Deposited in Parliament | 5 July 2007
|
| Department | Work and Pensions
|
| Basis of consideration | EM of 11 July 2007
|
| Previous Committee Report | None
|
| To be discussed in Council | December 2007
|
| Committee's assessment | Politically important
|
| Committee's decision | Cleared; but further information requested
|
Legal background
6.1 The following provisions of the EC Treaty are relevant to
the Commission's Communication on flexicurity:
· Article
125 requires Member States and the Community to work towards a
coordinated strategy for employment. In particular, they are to
promote both a skilled, trained and adaptable workforce and labour
markets which are responsive to economic change so as to help
achieve the objectives of the EC as set out in Article 2 of the
Treaty;
· Article
127 requires the Community to contribute to a high level of employment
in the EC by encouraging cooperation between Member States and
by supporting and, if necessary, complementing what they do;
· Article
128(1) requires the European Council to review the employment
situation each year and reach conclusions on it; and
· Article
128(2) requires the Council of Ministers, in the light of the
European Council's conclusions, to draw up guidelines for Member
States to take into account in framing and implementing their
employment policies.
Relevant European Council conclusions
6.2 At its meeting in March 2006, the European Council
stressed:
"the need to develop more systematically in
the [National Reform Programmes] comprehensive policy strategies
to improve the adaptability of workers and enterprises. In this
context, the European Council asks Member States to direct special
attention to the key challenge of 'flexicurity' (balancing flexibility
and security): Europe has to exploit the positive interdependencies
between competitiveness, employment and social security. Therefore
Member States are invited to pursue, in accordance with their
individual labour market situations, reforms in labour market
and social policies under an integrated flexicurity-approach …
In this context, the Commission, jointly with Member States
and social partners, will explore the development of a set of
common principles on flexicurity [our emphasis]."[15]
6.3 At its meeting in March 2007, the European Council
concluded that it:
"looks forward to the discussion on the Commission
communication on flexicurity, which should be instrumental in
preparing a range of flexicurity pathways to find the right mix
of policies tailored to labour market needs including increased
labour-market participation."[16]
The Commission's Communication
6.4 The Commission says that the way people live
and work in the EC is being changed by globalisation, demographic
change, new technology and the emergence of "segmented"
labour markets comprising "insiders" — with strong
employment protection — and "outsiders" with little
or no protection. The idea of a job for life is increasingly out-dated.
Some people will have to change not only employer but also type
of work several times in their careers. Lifelong learning is essential
so that workers can acquire new skills to meet changing demands
for labour. The Commission cites a Eurobarometer survey in 2006
which indicated that 72% of respondents thought that work contracts
should become more flexible so as to encourage job creation; and
82% commented that regular training improves workers' job opportunities.
6.5 The Commission says that flexicurity is a combination
of flexibility and security:
"Flexibility, on the one hand, is about successful
moves ('transitions') during one's life course: from school to
work, from one job to another, between employment or inactivity
and work, and from work to retirement. It is not limited to more
freedom for companies to recruit or dismiss, and it does not imply
that open-ended contracts are obsolete. It is about progress of
workers into better jobs, 'upward mobility' and optimal development
of talent. Flexibility is also about flexible work organisations,
capable of quickly and effectively mastering new productive needs
and skills, and about facilitating the combination of work and
private responsibilities. Security, on the other hand, is more
than just the security to maintain one's job: it is about equipping
people with the skills that enable them to progress in their working
lives, and helping them to find new employment. It is also about
adequate unemployment benefits to facilitate transitions. Finally,
it encompasses training opportunities for all workers, especially
the low skilled and older workers."[17]
6.6 The Communication reports that the Commission
and Member States have agreed that flexicurity policies can be
designed and implemented through:
· flexible
and reliable contractual arrangements between employers and employees;
· lifelong
learning strategies;
· labour
market policies which help people cope with change; and
· modern
social security systems which give adequate income support, encourage
employment and facilitate labour mobility.
6.7 The Commission refers to an OECD publication
which characterises flexicurity broadly as: moderate employment
protection legislation; high participation in lifelong learning;
high spending on labour market policies; generous unemployment
benefit systems; broad coverage of social security systems; and
high trade union coverage. The OECD found that the outcomes of
flexicurity were characterised by high employment, low unemployment
and low relative poverty rates. Annex II of the Communication
gives examples of flexicurity policies now in operation (including
the Austrian severance pay system; the Danish "golden triangle"
(flexible contractual arrangements, generous social security,
and extensive labour market policies); and fixed-term contract
reduction in Spain).
6.8 The Commission says that, while flexicurity policies
must reflect the circumstances of each Member State, all of them
face challenges from globalisation, demographic change and new
technology. It suggests, therefore, that it might be appropriate
to see if a consensus could be reached on "common principles
of flexicurity". The principles might be as follows:
"(1) Flexicurity involves flexible and reliable
contractual arrangements (from the perspective of the employer
and the employee, of insiders and outsiders); comprehensive lifelong
learning strategies; effective active labour market policies;
and modern social security systems. Its objective is to reinforce
the implementation of the Growth and Jobs Strategy, create more
and better jobs, and strengthen the European social models, by
providing new forms of flexibility and security to increase adaptability,
employment and social cohesion.
"(2) Flexicurity implies a balance between rights
and responsibilities for employers, workers, job seekers and public
authorities.
"(3) Flexicurity should be adapted to the specific
circumstances, labour markets and industrial relations of the
Member States. Flexicurity is not about one single labour market
model or a single policy strategy.
"(4) Flexicurity should reduce the divide between
insiders and outsiders on the labour market. Current insiders
need support to be prepared for and protected during job to job
transitions. Current outsiders — including those out of
work, where women, the young and migrants are over-represented
— need easy entry points to work and stepping-stones to
enable progress into stable contractual arrangements.
"(5) Internal (within the enterprise) as well
as external (from one enterprise to another) flexicurity should
be promoted. Sufficient flexibility in recruitment and dismissal
must be accompanied by secure transitions from job to job. Upward
mobility needs to be facilitated, as well as between unemployment
or inactivity and work. High-quality workplaces with capable leadership,
good organisation of work, and continuous upgrading of skills
are part of the objectives of flexicurity. Social protection needs
to support, not inhibit, mobility.
"(6) Flexicurity should support gender equality
by promoting equal access to quality employment for women and
men, and by offering possibilities to reconcile work and family
life as well as providing equal opportunities to migrants, young,
disabled and older workers.
"(7) Flexicurity requires a climate of trust
and dialogue between public authorities and social partners, where
all are prepared to take responsibility for change, and produce
balanced policy packages.
"(8) Flexicurity policies have budgetary costs
and should be pursued also with a view to contribute to sound
and financially sustainable budgetary policies. They should also
aim at a fair distribution of costs and benefits, especially between
businesses, individuals and public budgets, with particular attention
to the specific situation of SMEs. At the same time, effective
flexicurity policies can contribute to such an overall objective."[18]
6.9 Annex I of the Communication sets out four typical
"pathways" which illustrate how the common principles
of flexicurity might be implemented. The pathways are based on
Member States' experience and the report of the Flexicurity Expert
Group.
6.10 The Commission notes that the introduction of
flexicurity policies often adds to public expenditure (at least
in the short-term). It also draws attention to the financial support
available from the European Social Fund and the European Regional
Development Fund towards the costs of, for example, training and
helping unemployed people find work.
6.11 The impact assessment by the Commission staff
(ADD 1) provides supporting information and compares the impact
of the Commission's preferred approach — the open method
of coordination[19] —
with two other possibilities: either do-nothing or introduce legislation
on flexicurity.
6.12 Finally, the Commision looks forward to the
adoption of a common set of principles of flexicurity by the European
Council in December and invites Member States to report on their
flexicurity strategies in their National Reform Programmes.
The Government's view
6.13 The Parliamentary Under-Secretary of State at
the Department of Work and Pensions (Mr James Plaskitt) tells
us that work arising from the Commission's Communication;
"will be taken forward through the Integrated
Guidelines. Member States are required to take these into account
when formulating their employment policies and initiatives …
However, the policies and initiatives themselves remain a matter
for the Member States. The aim is to foster exchange of good practice,
as set out in National Reform Programmes, and thereby progress
reform to achieve the goal of full employment."
6.14 The Minister adds that that the Government will
report on its employment strategy in the National Reform Programmes
for 2008-10.
Conclusion
6.15 The common principles suggested by the Commission
do not appear to be unreasonable. We welcome the Commission's
emphasis on the need for flexicurity policies to be decided by
each Member State for itself and for the policies to be tailored
to national circumstances. We fully agree that "a one size
fits all" approach would be misconceived. We also share the
Commission's view that Member States can usefully learn from each
other's experience and that the open method of coordination would
be a practical way to foster this.
6.16 We are content, therefore, to clear the document
from scrutiny. We should be grateful, however, if the Minister
would send us progress reports on the discussion of the Communication
in the Council and its working groups in the run-up to the European
Council's meeting in December.
15 European Council 23-24 March 2006, Presidency Conclusions,
paragraph 41. Back
16
European Council 8-9 March 2007, Presidency Conclusions, paragraph
18. Back
17
Commission Communication, foot of page 4 and top of page 5. Back
18
Commission Communication, pages 9 and 10. Back
19
In March 2000, the European Council defined the open method of
coordination. Its purpose is to help Member States develop their
own policies by agreeing European guidelines and timetables for
short, medium and long-term goals; quantitative and qualitative
indicators; and benchmarks. Member States then translate the guidelines
into national and regional policies. There is periodic monitoring,
evaluation and peer review of the outcomes. Back
| 
