Aside from the growth in freelance workers and self-employment, there is now a wide range of salaried employment including open-ended, fixed term, agency work, apprenticeship or welfare-to-work contracts, In France and Belgium for example, over 30 different types of employment contract coexist in the labour market.
The European Commission seeks to tackle this in its consultation on the revision of the Written Statement Directive as part of its European Pillar of Social Rights initiative. Globalisation and digitalisation are changing forms of employment and bringing in new work arrangements.
The Pillars of Social Rights must take these changing realities into account and ensure that labour legislation is fit for 21st century labour markets and societies. Among the key challenges they identify is the need to define and apply appropriate rights for workers in the new and non-standard forms of employment relationships.
The Pillar lays down a number of key principles including secure and adaptable employment and information on employment conditions and protections.
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It sees two key challenges: Firstly, that workers get adequate information about their working conditions with legislation that is relevant, effective and upholds compliance; and secondly that we achieve convergence towards a minimum equal access to several important rights across the many new forms of employment.
The fact that modern labour markets need diverse forms of work is beyond question - it is a pre-requisite to increase labour market inclusion, stimulate job creation and fight undeclared work.
This means we need to stop taking an outdated 20th century approach that favours standard work over non-standard forms of work and embrace any type of work that offers decent working conditions.
What is essential is to guarantee that this biodiversity within the labour market is protecting those who need it the most.
The paradox is that those who take the most risks in securing and maintaining work are actually those who enjoy the least cover. While there are specific EU Directives covering some atypical forms of employment such as fixed-term, part-time and agency work, the Commission consultation has found this to be insufficient.
While it is not possible for the EU to anticipate all contractual forms a response that offers protection and fosters innovation would establish minimum floors of rights relating to working conditions across all types of contract.
The European Parliament resolution from earlier this year raises the issue of quality and fair working conditions and highlights that demand for labour is increasingly fluid which, while it can bring benefits for productivity and work/life balance, often involves economic insecurity and precariousness.
The fact is there is no ‘one-size-fits-all’ and we need to respect the choice of individuals in taking control of their own working lives. While it certainly should not be compulsory to join a pension scheme, today’s workers do need a different type of protection as they face a very different career path than that of their fathers or grandfathers.
21st century careers are no longer linear, but rather protean. Workers will typically begin as a temporary or fixed-term contract employee before accessing a full-term contract. They will then probably alternate between periods of employment and unemployment, training and/or reassignment.
Then at the end of their careers they will turn freelance to provide part-time consultancy work and additional income to top-up retirement benefits as they gradually ease themselves out of the labour market.
Overhauling social systems to deliver a greater portability of rights is essential if social protections are to keep pace with this changing world of work. Workers entitlements to pension, sick pay, holiday pay etc. must reside with them, not the employer, and be portable and transferrable throughout their working lives.
It will need to include all rights, including training, and they must also be portable cross-border if we are to realise a truly European labour market.
I believe that in order to deliver this we need to take a much broader approach to the funding of social protection schemes. We will have to achieve this through taxes from everyone from students to pensioners, and also purpose a percentage of VAT to fund pension schemes.
The employment industry has taken some innovative approaches in relation to agency worker’s rights which gives people stable access to social protection despite the fact that they have temporary assignments.
These include supplementary sectoral pension funds, access to bipartite training funds to facilitate life-long learning, sectoral social funds delivering additional benefits and guaranteeing access to bank loans and credits. We need to rebuild this similar stability into our social protections more widely.
Reconciling protection with freedom and volatility with security are two key challenges in today’s labour markets. The employment industry is ready to play its role as a labour market enabler and support the Commission as it looks to reconcile diverse forms of work with stability and rights.