International workshop on European Work councils
May 16, 2010 to May 19, 2010
Mélanie Schmitt

How does Europe affect the work of the European Work Councils?

EU policies and effects on companies:
-	Effects of the Lisbon strategy
-	Flexicurity and precarious employment

I.	The EU policies and involvement of trade unions and employer’s organisations 

1.	Presentation of the Lisbon Strategy

The Lisbon Strategy was launched in 2000 to make Europe “the world’s most competitive economy by 2010”. It is based on a combination of three main pillars: economic, social and environmental, and is very important for developing knowledge, particularly through the use of new technologies.
The Lisbon Strategy is a framework which structures the political debate over the mid-term, setting goals and priorities for strategic action for a 10-year period. Devised by the Commission, the strategy is primarily based on the policies of the European Council, and thus on the involvement of the member states.

With regards to employment, the formula of “more and better jobs” was adopted in 2002 to indicate the two facets of the employment policy:
-	A quantitative aspect, previously preferred due to the setting of targets in precise figures (employment rates);
-	A qualitative aspect, which will be emphasised in future, based on secure, permanent (“long-term”) forms of employment, as well as skill development.

The Lisbon Strategy was revised and simplified in 2005. Two main axes were retained: growth and employment. In terms of governance, the main focus is on the idea of a “partnership” between all parties concerned: the institutions of the European Union, the national authorities, and the trade unions and employers’ organisations,

In early 2010, the Commission adopted a strategy entitled “Europe 2020”, which aims to replace the Lisbon Strategy. If it maintains the economy-employment-environment combination and re-focuses on certain objectives which have already been planned but not yet realised, this new framework (which will be definitively adopted by the European Council in June 2010) will be set back in terms of the social difficulties caused by the economic and financial crisis. The social element is primarily limited to the fight against poverty.
The main emphasis is on the need for the member states to reduce debt, i.e. public spending, and it is from this perspective that the actions and policies of the member states will be evaluated.

2.	Co-ordination with the European Employment Strategy

Presentation of the EES. Since 1997, the European Union has pursued a “European Employment Strategy”, based on co-operation between the member states. This process, which aims for a “flexible” – non-restrictive – agreement between the national policies, is formalised as part of an “open co-ordination method” (OCM). It is based on adopting common objectives at a European Union level – employment guidelines (EG) – which must be implemented by the states, who must justify any national measures adopted using the National Action Plans (NAP). The Commission and Council compile a joint report summarising the actions of the member states in order to demonstrate the “good practices” which may serve as inspiration for the national policies.

The European Employment Strategy and the OCM have been the main instruments for promoting employment as part of implementation of the Lisbon Strategy since 2000.

Increased submission to the economic policy. From 2005, the integrated guidelines for growth and employment for the 2005-2008 period will, in one single, comprehensive and simplified text, bring together the main focuses of the economic policies (MFEP), as well as the employment guidelines. The Commission recognises the essential role played by the employment policies as part of the Lisbon Agenda. The Council has nevertheless decided not to modify the guidelines for 2006, although some of the employment guidelines are due to be implemented in conjunction with the economic guidelines.

Content of the employment guidelines. Guideline n° 17 states the quantified employment rate objectives, particularly for certain target groups: women, seniors. An active employment market policy must stipulate the mechanisms which allow these workers, as well as youths and non-qualified workers, to gain access to or re-join the employment market.

•	Casualisation of the workforce. Guideline n° 18 emphasises different elements which lead to a casualisation of the workforce:
-	 “enable a better balance between professional and family life (...)”, which is generally means temporary or part-time contracts;
-	“give preference to work conditions favourable to active ageing” (ditto).

•	Restructurings and adaptation to change. To achieve the aims of the guidelines, “the workers’ and companies’ adaptation capacity must be improved, and the flexibility of the employment markets increased”.
Guideline n° 21, concerning flexicurity (cf. 3.), emphasises the actions aiming to “adapt the legislation relating to employment, re-examine, if necessary, the different contractual methods and arrangements relating to working hours (...); promote and spread innovative and adaptable forms of work structuring in order to improve work quality and productivity, including health and safety”.

•	Training, re-training. The member states and companies are encouraged to “facilitate the transitions into professional life, including training, unpaid professional work, creation of businesses and geographic mobility”. 
Guidelines 23 and 24 more specifically relate to education and training. It is once again a question of “increasing and improving investment in human capital, namely in establishing ‘effective life-long tuition strategies open to everyone, as part of schools, businesses, public authorities and households, in accordance with European agreements, including stipulation of incentives and appropriate cost-sharing mechanisms, with a view to increasing participation in continuous, on-the-job training throughout workers’ lives, particularly those who are older and less qualified”.
“This guideline should be applied taking into account the guideline for ‘increasing and improving investment in research and development, namely by businesses’ (n° 7) concerning the microeconomic policy”.

•	Salary policy. Guideline n° 22 entails “ensuring development of work costs and establishing salary-fixing mechanisms which are favourable to employment by virtue of the following actions:
- encouraging the trade unions and employers’ organisations, in their specialised areas, to implement an appropriate framework for salary negotiations, allowing for the challenges to be faced in terms of productivity and the employment market, at all the relevant levels, and preventing a discrepancy in remuneration between men and women”
The trade unions and employers’ organisations are encouraged to limit salary developments as soon as “this guideline is applied, taking into account the guideline ‘ensuring that salary development contributes towards macroeconomic stability and growth” (n° 4)’, concerning the macroeconomic policy”.
Businesses are also encouraged to use variable remuneration models, based on the set objectives and results.

3.	Co-ordination with the flexicurity objective

Since 2005, guideline 21 of the EGs has emphasised the need to favour flexibility by combining it with job security, and to reduce employment market segmentation, duly taking into account the role of the trade unions and employers’ organisations.

According to the Commission (Paper dated 27 June 2007, entitled « Towards the common principles of flexicurity: More and better jobs by combining flexibility and security”, COM(2007)359 final), “In order to adapt, the EU must create more and better jobs. This involves relaxing its employment market, but not to the detriment of the workers’ and employers’ security. It is for this reason that new forms of flexibility and security are more necessary than ever”.

For the Commission, « This forces businesses to help their workers gain new skills. As for the workers, it is their capacity and will to adapt which are increasingly being sought. At the same time, the workers know that business restructurings are no longer a rarity, and that they have even become an everyday reality. Protecting their job may no longer be enough, and indeed may even be harmful in certain cases. In order to be able to plan their lives and careers, workers need a new type of security which allows them to remain on the employment market and face the changes with which they are confronted. This new type of security must not be limited to a specific job, but should rather relate to the transitions from one job to another”.

Flexisecurity comprises four main components:
-	Flexibility and security of the contractual arrangements from the employer’s and worker’s perspective, those included in and excluded from the employment market;
-	Comprehensive, lifelong tuition strategies which aim to consistently guarantee the workers’ employability and capacity to adapt;
-	Efficient, active employment market policies which help workers face up to rapid changes and periods of unemployment, and facilitate the transitions to new jobs;
-	Modern social security systems which provide adequate income support, encourage employment and facilitate mobility on the employment market.

***

With the member states’ approval, the European Commission has thus implemented the strategic policy framework. It is up to the member states, businesses, trade unions and employers’ organisations (as part of their “social responsibility”) to ensure this framework is translated into concrete measures.

II.	The impact of the European Union’s policies

1.	Impact at a European Union level

The right to employment. The right to employment must be relaxed in order to achieve the aims of the Lisbon Strategy and the employment guidelines. It is namely a question of easing the legal restrictions encumbering businesses in terms of redundancies and hirings, and giving preference to flexible forms of employment in order to allow businesses and jobs to adapt to the trends of demand and needs. The European directives are thus becoming instruments for realising the employment strategy and Lisbon Strategy. Several examples illustrate this tendency.

•	Temporary employment preferred. 
Several European directives insist on equal treatment of temporary/casual workers (short-term employment, part-time employment and, more recently, interim employment) and workers on a full-time, indefinite contract and permanent workers. However, these directives also pursue another objective – that of favouring these types of (temporary) employment contracts, as they guarantee flexibility for businesses. Negotiated between trade unions and employers’ organisations, the provisions of the directives relating to temporary and part-time employment aim to combine these two objectives: banning discrimination towards these workers is the main protective measure designed to compensate for the instability of their position. Ever since the 1990s, this has been known as a form of “flexisecurity”.

•	The principle of non-discrimination, an instrument of the employment strategy.
By encouraging job-maintenance and re-employment of the “vulnerable” worker categories, the Lisbon Strategy appears, at first glance, to be at odds with the banning of discrimination based on age (seniors or young workers), sex (women) or legal status (temporary employment, part-time employment or interim employment), as stated in the European directives. But the structuring of these two objectives is more complex. These European directives are actually designed as instruments for realising the employment guidelines, as are the dispensations given based on the principle of non-discrimination of age or legal status, which allow these groups of disadvantaged workers to be favoured.

•	The European agreement framework on the inclusive employment markets.
When it comes to employment, the European trade unions and employers’ organisations also help to realise the Lisbon Strategy through their autonomous social dialogue. 26 March 2010 thus saw the conclusion of a new European agreement on the inclusive employment markets, defining the obstacles to entering the employment market, and aiming to determine the responsibilities of each player (employers, workers, employers’ and workers’ representatives, public authorities) in order to overcome these obstacles. One of the main focuses is that of skill development, continuous training, and professional and geographic mobility, in accordance with the employment guidelines.

2.	Impact at a national level

There are deep divisions between researchers regarding the effectiveness and efficiency of the OCM. Similarly, the analysis of the Lisbon Strategy’s effects fluctuates depending on the period. Even though the European Commission acknowledges that the quantitative objectives have not been able to be met, it still believes the national policy developments have been positive, and will follow the same action plan for the 2020 strategy: quantitative objectives and a participative governance system. More specifically, the implementation of the flexicurity objective by the member states was the subject of an assessment in September 2008, which shows the differences between member states.  However, they also show more general, rather ambiguous tendencies.

The problem of work casualisation. Statistics show an increase in forms of unstable work: temporary, part-time, interim and sub-contracting employment contracts. The qualitative dimension of the jobs is generally unknown. The member states have implemented measures designed to favour these forms of employment for certain target groups: young people women, seniors (Spain, Slovenia, France, Germany).
This tendency complies with the encouragement of flexibility in employment contracts, but it also leads to a further segmentation of the employment markets. Reducing the difference between the “protected” workers (qualified workers, workers on a permanent contract) and the “vulnerable” workers is one of the main objectives of the flexicurity policy.

Flexisecurity: the “new securities”. The idea developed by the European Commission is to replace job security (stability of the permanent contract) with new forms of security: favouring re-integration into employment after termination of the employment contract ; right to life-long training, including during times of unemployment, etc. France is a good example of this approach.

France is seeking to establish a new equilibrium on the employment market in order to achieve a triple objective: stimulate business development, facilitate wage-earner mobility and guarantee secure remuneration. The notion of a having professional career and adopting measures designed to open up new, secure prospects for this is of major importance in the French approach. It namely involves:

-	maintaining the wage-earners’ rights and the social guarantees in periods of professional transition (portability and transferability of rights);
-	limiting fragmentation of the employment market and promoting long-term professional integration (particularly for older workers);
-	creating a dynamic social dialogue.
More recently, France adopted new laws aiming to reform the professional training system.

The emphasis on continuous training, but also on initial training, as part of the Lisbon Strategy has been adopted by all the member states. This aspect of flexicurity tends to be the main aspect from a longer-term perspective of “permanence”. However, due to the national specificities, the reforms are extremely varied. While most of the member states are clearly focusing on continuous training of employees, and therefore on the role of businesses, trade unions and employers’ organisations, Italy and Finland are also concentrating on reviewing the school system in order to better meet the needs of businesses.
The national reforms also emphasise the need for increased and more productive co-operation between the businesses, trade unions and employers’ organisations, and state systems (education system and employment services). The United Kingdom has established a Commission for employment assistance and skill-learning to allow employers’ voices to be heard and to strengthen their contribution to employment and training services. The Commission will also serve as a consultancy body for the government. The main focus is on the qualifications which offer access to employment, and on the provision of a service oriented towards the needs of the clients and employers, with particular support for more disadvantaged people on the employment market.

Some member states have opted for activation policies which vary considerably, depending on the particularities of their unemployment allowance system. In the United Kingdom, employment assistance has been strengthened to help unemployed and underqualified people find a long-term job (skills assessment based on long-term aspirations and short-term professional objectives, personalised services, etc.). In Sweden, on the other hand, the challenge is the re-integrate these people onto the employment market and combat the stigmas of unemployment. To increase manual labour positions, the government has opted for policies aiming to encourage a return to employment by lowering unemployment allowances, which are deemed to be very generous.

3.	Impact at the level of European businesses

Restructurings and anticipation of change. According to the subsidiary provisions of the directive on the European business committees, the committee must be consulted “regarding the measures which considerably affect workers’ interests”, in the event of “exceptional circumstances (…), namely in the event of relocation, closure of businesses or establishments, or mass redundancies”. Extending beyond the provisions of the directive, numerous agreements have been concluded in community enterprises, often with the EEC, in order to control the social consequences of a restructuring (namely in the automobile sector – Ford, GM agreements).
A more recent tendency consists of negotiating “cold”, before any plan for restructuring is devised, in order to arrange procedures and measures to be applied in the event of restructuring in the future.
Some agreements even aim to influence the employment trend within the company in order to prevent the harmful social consequences of a restructuring and, more broadly, to allow for the development of HR and skills requirements.

Management of jobs and skills. Prolonging the Lisbon objective of developing life-long training and skills in accordance with the needs of the employment market, some European businesses have negotiated and concluded agreements on the management of jobs and skills. These have initially been French companies (GDF-Suez, EDF, Thalès, ArcelorMittal), as French law obliges businesses with at least 300 employees to conduct negotiations on this issue. These agreements put in place the tools designed to improve employability of wage-earners, adaptation to their position, and development of jobs and careers within the company. Continuous training is one of these tools, which must be personalised, namely through talks (see “the discussion on professional development” established by the Idea de Thalès agreement of 2009).
More recently, the Thalès group concluded an agreement with the European Metalworkers’ Federation on 14 April 2010 regarding a “transparent annual activity discussion on mutual comprehension and the development of professional skills” (“TALK” agreement). This “annual evaluation discussion” consists of “jointly assessing the past year, and identifying any means of improvement, as well as the main objectives for the coming year”. The aim is to “create a clear framework and benchmarks to facilitate real, permanent improvement, both at a collective level (work structure, balance of means and objectives, and co-operation) and an individual level (training/tuition/teamwork activities)”. Furthermore, the signatories define “the fundamental principles” which guarantee that this discussion “will be conducted in a socially responsible climate of mutual respect and comprehension”.

The vulnerable groups. Employment of seniors and handicapped persons.
European businesses are also working towards realising the Lisbon objective of favouring job-maintenance and re-employment of certain categories of “vulnerable” workers. Seniors thus benefit from specific provisions of certain agreements on the management of jobs and skills. On more rare occasions, agreements deal with just this one main issue (European agreements of 14 October 2008 on the employment of seniors and handicapped persons in the PPR group).

***

In conclusion, it must be stated that the strategic priorities and objectives defined at an EU level are ambitious but also ambiguous, indeed even contradictory. Furthermore, they leave the member states with a lot of room for manoeuvre in terms of defining measures which will allow these objectives to be realised.

More specifically, the method adopted has been criticised because it does not focus enough on the ultimate social aim of all these policies. The emphasis is placed on economic performance, but this should only constitute one means of ensuring the wellbeing of European citizens and, more particularly, workers. The quantitative objectives conceal a lack of qualitative objectives; improvement of work conditions and remuneration has hardly been developed, except to increase work productivity.
Moreover, the idea that the individuals are (partly) responsible for their “employability” is the precursor to a decline in workers’ rights by encumbering these workers with the risk of unemployment and lack of training.
In sum, the differences between the national employment policies run the risk of intensifying a notion of inequality among the workers. In this context, the actions of the European business committees are of extreme importance, as they enable definition of a level of protection common to all wage-earners, regardless of the country in which they are working. These actions also allow the level of protection to be raised in member states where the law is less favourable.