Labour markets have undergone significant change over the past decade, driven by a series of structural shifts: Traditional business models are being challenged by a new economic environment and emerging on-demand economy; our supply chains are now global, resulting in more outsourcing, project-based and online work; rising individualism has changed people’s attitudes to work; and new technologies are prompting the need for new skills and lifelong learning. Meanwhile, the onward march of digitalisation means that people can literally work from anywhere, eroding the conventional, nine-to-five, command and control office culture.
The Commission’s social fairness package represents an encouraging step in extending social innovation to European labour markets. It proposes a policy environment that embraces emerging trends and looks to create a European working environment fit for the realities of the 21st century.
The social fairness package, with its focus on portable rights, and the proposal for a Council recommendation on access to social protection, takes an important step in the right direction. It recognises the need to modernise social protection schemes to reflect new work models.
Social benefits including health, pension, sick leave and paid holidays should be transferrable and linked to individuals, not their work. Labour market security needs to be favoured over job security with labour costs and collective contributions between different forms of work on an equal footing in order to reconcile flexibility and security in the labour market. I would suggest that in the future we will also have to rethink how we fund social protection in order to provide these securities.
Italian S&D group deputy Brando Benifei says; “The social fairness package seeks to make sure that European social policies are effective. A new labour authority should strengthen cooperation between national authorities as well as trade unions, to fight abuse and fraud of all types, particularly on social security, on working conditions of mobile workers and to stop undeclared or falsely-declared work.
“The proposed Council recommendation on access to social protection for workers and the self-employed must extend to the workers of the new millennium, especially those in the rapidly-expanding digital sector, often hired through precarious or atypical employment arrangements. The importance of this challenge needs the legislative involvement of the European Parliament, just by recommending actions to national governments.”
As Benifei points out, a European labour authority is a promising proposal, one which would serve to strengthen cooperation across labour markets and help deliver a better functioning internal labour market.
It could support improved enforcement of EU regulation and strengthen the cooperation and exchange between national enforcement authorities of the member states.
At the same time, the European labour authority should fully respect the principle of subsidiarity and the competence of the EU member states in implementing and enforcing European legislation.
French EPP group MEP Elisabeth Morin-Chartier agrees; “This is a necessary step towards a social Europe that provides it with the resources to match its ambition. This European labour authority should be the way for the rules concerning the mobility of the workers to be finally respected.”
She stresses that “We cannot afford to economise on this issue: the authority cannot just be simply a platform of exchange for national experts.”
Establishing a European labour authority is a promising proposal, one which would serve to strengthen cooperation across labour markets and help deliver a better functioning internal labour market.
It could support improved enforcement of EU regulation and strengthen the cooperation and exchange between national enforcement authorities of the member states.
At the same time, the European labour authority should fully respect the principle of subsidiarity and the competence of the EU member states in implementing and enforcing European legislation.
The EU had already begun to elaborate many of these actions in its European pillar of social rights - unanimously endorsed by the EU employment Council in 2017 and proclaimed by the European Parliament as well as by the Council and Commission.
The 20 key principles in its Gothenburg concluding report are structured around the three categories; equal opportunities and access to the labour market, fair working conditions and social protection and inclusion.
Well-functioning labour markets need policies designed to meet the needs of business and industry, while still upholding workers’ rights and protections.
For companies, social innovation is essential as it allows them to remain agile and prosper, confident in the knowledge that they can attract and retain a workforce with the relevant skills sets.
For workers it means portable rights, new types of collective representation, access to housing and credit as well as pensions and sick pay throughout their lives. Hence, Europe needs to broaden social innovation into the world of work if it is to create the efficient and resilient labour markets needed to drive growth and competitiveness.
The employment industry touches on many of these ambitions in its manifesto, ‘No future of work without social innovation’, explains Denis Pennel, managing director of the World Employment Confederation-Europe.
“We are proposing to overhaul the social structure underpinning how we organise, classify, support and regulate work. We also make five policy recommendations: equal access to the labour market through a diversity of work contracts; a fair job for all; a new social deal with modernised social protection systems; skills training; and responsible labour market intermediation to help the efficient matching of supply with demand in our labour markets.”
As work becomes increasingly diverse, some of the core premises on which our social protection systems are founded need to be reviewed. Emerging forms of work need to be classified: Are workers employees or self-employed?
Either way, these dispersed and online workers must be organised, represented and assured of decent and safe working conditions. At the same time, we must support workers in managing risks such as periods of inactivity, sickness and pensions, while also protecting the most vulnerable workers in our society including young people, older workers and ethnic minorities, and avoiding unfair competition and social dumping.
The new social fairness package must support a futureproof labour market that celebrates its diversity while safeguarding a European work environment that is open, enabling, inclusive, and sustainable.