2 Employment guidelines
| Committee's assessment
| Politically important |
| Committee's decision | Not cleared from scrutiny; recommended for debate in European Committee B along with the draft Council Recommendation on broad guidelines for economic policies of Member States and the EU (Council document 6813/15 + ADD 1)
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| Document details | Draft Council Decision on guidelines for the employment policies of the Member States
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| Legal base | Article 148(2) TFEU; —; QMV
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| Department
Document numbers
| Work and Pensions
(36703), 6144/15 + ADD 1, COM(15) 98
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Summary and Committee's conclusions
2.1 The EU Treaties provide that Member States are
to regard their economic policies and the promotion of employment
as "a matter of common concern".[17]
At our meeting on 18 March 2015, we considered a draft Council
Recommendation establishing four broad guidelines for Member States'
economic policies.[18]
In this chapter, we consider four further guidelines for Member
States' employment policies. As each set of guidelines has a distinct
legal base in the EU Treaties, they have been proposed as separate
legal instruments which are, however, "intrinsically interconnected".[19]
Together, they constitute the new "integrated guidelines"
which are intended to provide the framework for policy coordination
within the annual European Semester and to underpin the remaining
years of the EU's Europe 2020 Strategy for jobs and growth. The
guidelines will be considered by the European Council in June.
2.2 The Government notes that the guidelines are
not legally binding and considers their content to be broadly
acceptable, whilst highlighting concerns about the use of "inappropriately
prescriptive language on labour taxation and Member States' social
policies".
2.3 We have already recommended that part one
of the integrated guidelines, concerning economic policies, should
be debated in European Committee B. We consider that the second
part of the guidelines, dealing with Member States' employment
policies, should be debated at the same time. We urge the Government
to ensure that the debate takes place before the June Employment
and Social Policy (EPSCO) Council and the European Council.
2.4 We suggest that Members may wish to invite
the Government to amplify its concerns regarding the references
in the employment guidelines to labour taxation and Member States'
social policies during the course of the debate.
Full details of the documents:
Draft Council Decision on guidelines for the employment policies
of the Member States: (36703), 6144/15 + ADD 1, COM(15) 98.
Background
2.5 The employment guidelines have to be agreed each
year by a Decision of the Council and must remain consistent with
the broad economic guidelines. They form an important part of
the Europe 2020 Strategy, agreed by the European Council in March
2010, and the European Semester, an EU-level framework for coordinating
and assessing Member States' structural reforms and fiscal/budgetary
policy and for monitoring and addressing macroeconomic imbalances.
2.6 The Europe 2020 Strategy seeks to establish a
comprehensive policy framework to address the challenges facing
the EU during the period to 2020, with a specific focus in the
remaining years on investment, structural reform and fiscal responsibility.
The policy orientations contained in the integrated guidelines,
along with the associated reporting and monitoring processes,
are intended to help transform the EU into "a smart, sustainable
and inclusive economy delivering high levels of employment, productivity
and social cohesion" by 2020. The Strategy sets out five
"headline targets" which the EU should aim to achieve
by then. They include one on employment which seeks to raise the
employment rate amongst those aged between 20 and 64 to 75% and
to encourage labour market participation amongst young people,
older workers, low-skilled workers, as well as better labour market
integration of legal migrants.
2.7 The integrated guidelines also form an integral
part of Member States' National Reform Programmes which determine
how the objectives of the Europe 2020 Strategy are to be achieved.
Member States are required to produce an annual report describing
the principal measures taken at national level to implement the
employment guidelines. These reports form the basis of a Joint
Employment Report prepared annually by the Commission and Council
for submission to the European Council along with the Commission's
Annual Growth Survey.
2.8 The current employment guidelines, which have
been rolled over each year from 2010 to 2014, are designed to:
· increase labour market participation,
reduce structural unemployment and promote job quality;
· develop a skilled workforce and promote
lifelong learning;
· improve the quality and performance of
education and training systems and increase participation in higher
education; and
· promote social inclusion and combat poverty.
The draft Council Decision
2.9 Although the employment guidelines have to be
renewed annually, they have remained stable during the five years
from 2010 to 2014 to allow sufficient time for effective implementation.
The new guidelines proposed by the Commission are set out in an
Annex to the draft Council Decision. The recitals to the draft
Decision make clear that "moving the Union to a state of
strong, sustainable and inclusive growth and job creation is the
key challenge faced today".[20]
They also place particular emphasis on addressing the social impact
of the economic and financial crisis through the effective functioning
of labour markets and social welfare systems. Although addressed
to the Member States, the guidelines are intended to be implemented
"in partnership with all national, regional and local authorities,
closely associating parliaments, as well as social partners and
representatives of civil society".
2.10 The employment guidelines form the second part
of the integrated guidelines and are numbered accordingly from
five to eight. Each guideline has a headline title, followed by
descriptive paragraphs setting out some common objectives to be
pursued by Member States.
GUIDELINE 5: BOOSTING DEMAND FOR LABOUR
2.11 This guideline encourages Member States to:
· facilitate job creation by reducing barriers
to employment, promoting entrepreneurship, and supporting the
creation of small businesses;
· take active measures to promote the social
economy and foster social innovation;
· shift the tax burden from labour while
protecting revenue necessary for the provision of adequate social
protection and other growth-enhancing expenditure;
· remove barriers and disincentives to labour
market participation;
· encourage wage-setting mechanisms (together
with social partners) so that wages keep pace with productivity,
taking into account differences in skills and local labour market
conditions as well as in economic performance across regions,
sectors and companies; and
· ensure, when setting minimum wages, that
the impact on in-work poverty, job creation and competitiveness
is considered.
GUIDELINE 6: ENHANCING LABOUR SUPPLY AND SKILLS
2.12 This guideline urges Member States to:
· promote productivity and employability
by ensuring an appropriate supply of relevant knowledge and skills;
· invest in education and vocational training
systems to improve skills levels within the workforce;
· improve access to quality adult learning
and implement active ageing strategies to extend working lives;
· reduce the number of long-term unemployed
and the level of youth unemployment through strategies supporting
a return to the labour market and implementation of youth employment
guarantees;
· improve education and training systems
to ensure good quality learning outcomes and reduce early school
leaving;
· consider dual learning systems, as well
as increased opportunities for recognising skills acquired outside
the formal education system;
· reduce barriers to labour market participation,
especially for women, older workers, people with disabilities,
and legal migrants;
· ensure gender equality and equal pay in
the labour market, as well as access to affordable and good quality
early childhood education and care; and
· make full use of the European Social Fund
and other EU funds to improve employment, social inclusion, education
and public administration.
GUIDELINE 7: ENHANCING THE FUNCTIONING OF LABOUR
MARKETS
2.13 This guideline recommends that Member States
should:
· reduce labour market segmentation, ensuring
that employment protection rules encourage recruitment while also
providing adequate protection for those in work, seeking work,
or employed on temporary contracts;
· ensure close involvement of national parliaments
and social partners in designing and implementing labour market
reforms and policies;
· strengthen active labour market policies;
· ensure that social protection systems
are effective in activating those able to participate in the labour
market whilst protecting those who cannot, as well as preparing
individuals to manage risk;
· promote inclusive labour markets and put
in place effective anti-discrimination measures; and
· support the mobility of workers through
measures to enhance the portability of pensions and recognition
of qualifications, whilst guarding against abuse of existing free
movement rules.
GUIDELINE 8: ENSURING FAIRNESS, COMBATING POVERTY
AND PROMOTING EQUAL OPPORTUNITIES
2.14 This guideline encourages Member States to:
· modernise their social protection systems
to ensure fair, effective, efficient and adequate protection;
· ensure that social policies are better
targeted and complemented by affordable, good quality childcare
and education, training and employment support, housing support,
accessible health care, and access to basic services (such as
bank accounts and the Internet);
· take action to reduce levels of early
school leaving and tackle social exclusion;
· support investment in human capital and
help prevent, reduce and protect against poverty;
· reform pension systems to ensure their
sustainability and adequacy in light of increasing longevity and
demographic change; and
· improve the accessibility, efficiency
and effectiveness of healthcare and long-term care systems, while
safeguarding fiscal sustainability.
The Minister's Explanatory Memorandum of 17 March
2015
2.15 The Minister for Employment (Esther McVey),
noting the different legal bases in the EU Treaties for the two
sets of guidelines, explains that the broad economic guidelines
fall within the remit of the Economic and Financial Affairs Council
(ECOFIN) whereas the employment guidelines are agreed by the Employment,
Social Policy, Health and Consumer Affairs (EPSCO) Council.
2.16 The Minister describes how the employment guidelines
fit within the annual reporting framework established as part
of the European Semester:
"The Employment Guidelines provide the context
against which the Government prepares a report on implementation
of national employment policy, the National Reform Programme,
and which will be examined in the form of a peer review by other
Member States' officials in the advisory Employment Committee.
On the basis of this examination the Council may, on a recommendation
from the Commission, make recommendations to individual Member
States (the Country Specific Recommendations published in June).
These would be agreed bilaterally by EPSCO. It would primarily
be for the Government to decide how to report on any national
policy it considered relevant to any recommendation made to the
UK."[21]
2.17 The Minister notes that the guidelines are not
legally binding and are intended to "frame the scope"
of Member States' national employment policies. Turning to their
substance, she continues:
"The proposed language is in keeping with
the current Employment Guidelines and it is broadly acceptable
to the Government. However, there are some concerns about the
use of inappropriately prescriptive language on labour taxation
and Member States' social policies, on which we already have some
support. Nevertheless, the proposal here is in the early stages
of negotiation, and there is ample opportunity to address our
concerns."
2.18 Following consideration by the Employment and
Social Protection Committees, and any other relevant Committees,
the Minister expects the Latvian Presidency to seek agreement
to a general approach at the EPSCO Council in June.
Previous Committee Reports
None, but our Thirty-seventh Report HC 219-xxxvi
(2014-15), chapter 2 (18 March 2015) concerning the draft Council
Recommendation on the broad economic policy guidelines is relevant.
17 Articles 121 and 146(2) TFEU. Back
18
See our Thirty-seventh Report listed at the end of this chapter
for further details. Back
19
See p.2 of the Commission's explanatory memorandum accompanying
the draft Decision. Back
20
Recital (6). Back
21
See para 18 of the Minister's Explanatory Memorandum. Back
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