Does the UK already have flexicurity?
85. In making this point, the TUC was countering
the view of some others who submitted evidence to us that the
less regulated, less unionised, lower tax UK model represents
an equally good example of flexicurity in action. For example,
the Unquoted Companies Group (UCG)—an informal group of
around 30 chief executives of owner managed companies—argued
that "the UK's relatively unregulated labour market already
delivers flexicurity, if we must use this word." (pp 200-204)
86. This view was contested by Mr Owen Tudor,
Head of European and International Relations at the TUC, who told
us: "Flexicurity has been successful in Nordic economies
but we would contend that what the UK has is not flexicurity."
(Q 102) However, the UCG's view was consistent with evidence
given to us by the DTI. (pp 85-96)
87. Although the UK labour exhibits a high degree
of labour turnover—with around 6 million leaving jobs each
year and a similar number finding new jobs—more than two-thirds
of these job moves are voluntary and UK workers generally feel
secure in their jobs. The DTI cited the recently published Fourth
European Working Conditions Survey which finds that the UK has
the second lowest rate in the EU for the percentage of workers
who fear they will lose their job in the next six months. In addition,
the flexibility bestowed by light employment protection legislation
meant that the UK had a relatively high rate of workers employed
on permanent contracts (these accounting for 94% of the workforce).
(pp 85-96)
88. Expanding on this point, Mr Meager of
the IES told us "There is a paradox actually that across
countries there seems to be an inverse relationship between the
strictness of employment protection legislation and how people
feel". (Q 12)
89. This paradox may be explained by the fact
that in more regulated labour markets workers protected by law,
fear that if they do lose their job it may be difficult to find
another, at least on a permanent contract. This explanation was
posited by the EU-wide employers' organisation Business Europe
(known until recently as UNICE, the Union of Industrial and Employers'
Confederations of Europe, of the which the UK's CBI is a member)
which contended that the essence of the flexicurity approach is
that it does not seek to organise trade-offs between flexibility
and security but, on the contrary, sees flexibility and security
as reinforcing each other, with flexibility looked upon as a way
to improve employment security. (pp 125-132)
90. Mr Meager also argued that in countries
where employers were not easily able to make staff redundant,
instead of doing so regularly they tended to do so occasionally
and on a large scale, particularly at times of economic crisis.
This tended to create a sense of unease amongst workers. (Q 12)
Flexicurity: what lessons for
the UK?
91. Mr Meager went on to make the point
that, from the UK's perspective, any lessons to be drawn from
a debate on flexicurity relate to skills policy and welfare to
work measures for those individuals and groups who face the most
difficulty adapting to change, rather than to matters of labour
law as the Green Paper suggests. Mr Meager thus concluded
that this element of the Green Paper was "off the point".
(Q 13)
92. It is therefore significant that the interim
report of the European Commission's Expert Group on Flexicurity[24]—which
has been received by the Committee—concludes that "there
is not one way that leads to Rome". As the Expert Group states:
"Resulting from consultations and negotiations at national
levels, flexicurity can take different forms from country to country.
In some cases flexicurity will focus more on solutions within
companies, in other cases it will concentrate on transitions between
jobs and from employer to employer. Sometimes it will focus more
on the interplay between relatively flexible rules of economic
dismissals in combination with high benefits, whereas in other
cases emphasis will be on safe bridges from work to work organised
by social partners and public employment services".
93. We commend the Commission for starting,
in the Green Paper and elsewhere, an important policy debate on
how labour market flexibility and employment security might be
combined and reinforced to the benefit of both employers and workers
and in furtherance of the common good.
94. However, we recommend that the purpose
of this debate should be primarily to share information and examples
of good practice, recognising the diversity of circumstances between
Member States identified by the report of the Commission's Expert
Group on Flexicurity. Any common principles of flexicurity agreed
at EU level should therefore be interpreted as guidelines rather
than as obligations.
95. We recommend also, that as far as the
UK is concerned, progress toward enhancing flexicurity requires
action on skills and welfare to work measures rather than changes
in labour law.
21 op. cit. page 4 Back
22
European Commission Expert Group on flexicurity http://ec.europa.eu/employment_social/employment_strategy/flex_expert_en.htm Back
23
Office for National Statistics: http://www.statistics.gov.uk/downloads/theme_labour/LMS.FR.HS/WebTable19.xls
Back
24
Expert Group on Flexicurity's report from the rapporteur to the
Commission: Flexicurity pathways: April 2007 Back
