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Document 52012SC0407
COMMISSION STAFF WORKING DOCUMENT Analytical document Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Towards a Quality Framework on Traineeships Second-stage consultation of the social partners at European level under Article 154 TFEU
COMMISSION STAFF WORKING DOCUMENT Analytical document Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Towards a Quality Framework on Traineeships Second-stage consultation of the social partners at European level under Article 154 TFEU
COMMISSION STAFF WORKING DOCUMENT Analytical document Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Towards a Quality Framework on Traineeships Second-stage consultation of the social partners at European level under Article 154 TFEU
/* SWD/2012/0407 final */
COMMISSION STAFF WORKING DOCUMENT Analytical document Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Towards a Quality Framework on Traineeships Second-stage consultation of the social partners at European level under Article 154 TFEU /* SWD/2012/0407 final */
COMMISSION STAFF WORKING DOCUMENT Analytical document Accompanying the document COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS Towards a Quality Framework on
Traineeships
Second-stage consultation of the social partners at European level
under Article 154 TFEU TABLE OF CONTENTS 1........... Introduction.................................................................................................................... 4 2........... Types of traineeships, their
benefits and their costs........................................................... 6 2.1........ Definition of traineeships................................................................................................. 6 2.2........ Types of traineeships and their
regulation......................................................................... 7 2.3........ Benefits and costs of
traineeships.................................................................................... 9 3........... Consultations and stakeholders
views............................................................................ 13 4........... Problem Definition........................................................................................................ 15 4.1........ Nature and extent of problems...................................................................................... 15 4.2........ Number and share of low quality
traineeships................................................................ 21 4.3........ Problem drivers and trade-offs:
The role of market failure.............................................. 23 4.4........ Quality issues and transnational
traineeships................................................................... 26 5........... Legal basis and subsidiarity........................................................................................... 28 6........... Policy Objectives.......................................................................................................... 30 7........... Policy coherence – contribution
to Europe 2020............................................................ 31 8........... Possible avenues for EU action..................................................................................... 31 8.1........ No initiative at EU level
(baseline scenario).................................................................... 33 8.2........ Creation of an information
website................................................................................ 34 8.3........ Quality label for traineeships.......................................................................................... 35 8.4........ European Quality Framework for
Traineeships.............................................................. 36 8.5........ Combination of options................................................................................................. 39 8.6........ Final overview.............................................................................................................. 39 9........... References................................................................................................................... 40 ANNEXES................................................................................................................................ 43 Annex I – Apprenticeships vs. Traineeships................................................................................. 43 Annex II – Traineeship study, Executive
summary........................................................................ 44 Annex III – Regulatory Framework............................................................................................. 48 Annex IV – A voluntary approach to Quality
Labels for Traineeships........................................... 49 Annex V – Sectoral distribution of
traineeships by country........................................................... 50 Annex VI - Market failure in traineeships..................................................................................... 51 ANNEX VII – Comparison of the quality
elements considered by the Commission with the Code of Best Practice (UK), the
Loi Cherpion (FR) and the European Quality Charter on Internships and
Apprenticeships presented by European NGOs.......................................................................................................................... 54 1. Introduction Social Partners consultation According to Article 154 TFEU Social
Partners have to be formally consulted, before the Commission submits proposals
in the social policy field (e.g. working environment, working conditions,
social security and social protection of workers, and the integration of those
excluded from the labour market and the combating of social exclusion, Article
153 TFEU). Social partners are consulted in two stages
– first on the direction of Union action and later on the content of the
envisaged proposal. This document presents background
information to support the second stage consultation of the European
social partners on a possible EU initiative on a Quality Framework for
Traineeships. The first stage consultation was closed on
23 October 2012. It followed a public consultation
carried out between 19 April and 11 July 2012[1].
This second stage
consultation will gather opinions of the European social partners on the content
of the envisaged proposal. The possible outcomes of
this procedure are the following: social partners can enter into negotiations
(which may last max. 9 months), and may reach an autonomous agreement or may
ask the Commission to make a legislative proposal implementing their agreement.
If social partners fail to agree or decide not to negotiate, the Commission has
to assess the situation and can present its own proposal. Context Currently over five
million young people in the EU under the age of 25 cannot find a job, and in a
large number of Member States transitions from education to work have become
increasingly longer, more unstable and uncertain. In this context, increasing
the access of young people to the labour market is a top priority for policy
makers and facilitating the transition from education to work is key in this
context. By providing a possible stepping stone to more productive employment
careers, traineeships can help foster sustainable job creation, reduce youth
unemployment and eventually contribute to raise the employment rate –one of the
headline targets of the Europe 2020 Strategy. Despite the benefits of
traineeships, concerns about their effectiveness and quality have been
recognized by European Institutions. In its 2010 Resolution[2] the European
Parliament called specifically for better and secured internships; for a
European Quality Charter setting out minimum standards for internships to
ensure their educational value and avoid exploitation; and for young people to
be protected from those employers who are "exploiting the willingness
of young people to learn without any future prospect of becoming fully
established as part of their workforce." In 2011, the European Commission
foresaw in its Youth Opportunity Initiative the launch of a Quality Framework
on Traineeships by the end of 2012. In its conclusions on
promoting youth employment of June 2011, the Council acknowledged that "given
a lack of appropriate employment opportunities, in some Member States a
significant number of young people have no other choice but to take up
precarious employment offers, such as unpaid or low-paid internships (…)."
In response, it asked Member States to "tackle labour market
segmentation where appropriate by developing adequate contractual arrangements,
strengthening activation measures as well as promoting sustainable and high
quality employment, securing decent working conditions and providing adequate
income protection with clear incentives for young people, while respecting
national needs and starting positions and the important role of the social
partners" and to "promote quality mobility for young people at
both national and EU level." Similarly, in May 2011 the Council Conclusions
on the structured dialogue with young people on youth employment emphasized
that "(…) a quality framework for internships is desirable in order to
guarantee the educational value (…)" of traineeships[3]. Furthermore, the
June 2012 European Council concluded that "It is crucial to address
youth unemployment, in particular through the Commission's initiatives on youth
guarantees and the quality framework for traineeships (…)". Member States, too,
have been actively examining traineeships in order to improve their functioning.
This has led to a series of initiatives, typically aiming at increasing
safeguards against trainee exploitation and addressing quality concerns (see
Box 1). Box 1. Examples of Member States’ Efforts to Enhance Trainee Protection in the Open Market ■ Austria: in an effort to help the so-called ‘internship generation’ secure regular employment instead of successive traineeships, the 2010 Aktion + 6000 Programme provides wage subsidies to employers if, upon completion of the traineeship, they keep on the trainees. ■ France: in an attempt to address the issue of successive traineeships, the 2011 Loi Cherpion stipulates that, inter alia, companies should wait for a period corresponding to 1/3 of the length of the previous traineeship before taking on a new trainee in the same role. This law strengthens the legal framework of traineeships and reinforces the trainee’s rights, terms and conditions, including trainee compensation. ■ Greece: in order to prevent employers from replacing regular staff with trainees, the 2010 Work Experience Programme for New Labour Market Entrants stipulates that companies which have reduced their staff in the last six months are not eligible to take part. In addition, an employer cannot renew the traineeship contract with the same trainee. ■ UK: a number of voluntary charters (CIPD’s Internship Charter) and codes of best practice (Code of Best Practice for Quality Internships) are promoted in an effort to improve the quality of traineeships in the open market. Source: Traineeship study, European Commission (2012a), p. 65 The European
cross-sectoral social partners (BusinessEurope, UEAPME, CEEP, ETUC) agreed to
"promote more and better apprenticeship and traineeship contracts"
and "ensure the right working conditions to welcome and support new
entrants in the enterprise" as key actions under their 2010 Framework
Agreement on Inclusive Labour Markets. In their joint work programme 2012-2014,[4] the European
social partners - aware of the remits of European competences in the field of
employment and social affairs – agree on the need in general to “establish
the appropriate framework conditions to ensure employment opportunities for all
workers and to allow for the integration, retention and development of workers
in European labour markets”; and more specifically to take action to remedy
the “unacceptable situation” of youth unemployment; to assess the
situation of young people as a priority; and to “focus on the link between
education, young people’s expectations and labour market needs, taking into
account young people’s transition into the labour market, in an effort to
increase employment rates in general.” While noting that they are put to a test in
this exceptional situation, with success measured in their capacity to put
forward solutions to EU labour markets problems, the European social partners
announce that they “will make, in the context of a framework of actions,
concrete recommendations also to Member States and the EU institutions [and]
also contribute to the G20 agenda on youth employment.” Finally, they also
agree to jointly ensure better impact and/or implementation of EU social
dialogue instruments throughout Europe. To ensure the respect
of the principle of the autonomy of the social partners this document addresses
issues such as types of traineeships, benefits and costs, the results of
stakeholder consultations, the definition of the problem, the subsidiarity
check, the policy objectives and reflections on how an EU initiative could
achieve them. It does not claim to present a detailed assessment of policy
options and their potential impacts – all of which would be addressed in a
possible future impact assessment, taking due account of the outcomes of the
2nd stage social partner consultation. It does include, however, evidence and
first indications on the costs and benefits of policy options and their
potential impacts where available. It further lays out possible future steps to
support a more detailed analysis in the context of a possible future full
impact assessment. 2. Types
of traineeships, their benefits and their costs 2.1. Definition
of traineeships Traineeships, also
known as internships or stages, are understood as a limited period of work
practice spent at business, public bodies or non-profit institutions by
students or by young people having recently completed their education, in order
to gain some valuable hands-on work experience ahead of taking up regular
employment. Given their similar aims, traineeships are often confused with
apprenticeships; however, even though the distinction between the two can be
fuzzy in some cases, traineeships and apprenticeships differ in several
respects: ·
An apprenticeship in a strict sense is a
systematic, long-term training alternating periods at the workplace and in an
educational institution or training centre. The characteristics of the
apprenticeship (e.g. occupation, duration, skills to be acquired, wage or
allowance) are defined in a training contract or formal agreement between the
apprentice and the employer directly or via the education institution.
Apprenticeships are normally part of formal education and training at upper
secondary level (ISCED 3), the duration of the training is on average 3 years,
and a successful completion leads to a nationally recognised qualification in a
specific occupation. However, most initial vocational training programmes
include some optional or compulsory practical training either in school or in a
company and the borders between apprenticeships and school-based schemes which
include traineeship periods at a workplace are not clear-cut. ·
Traineeships on the other hand can be described
as work practice including a training component. They allow to document
practical work experience as part of the individual CV and/or as requested in
educational curricula or to gain work practice for the purpose of facilitating
the transition from education and training to the labour market. They are
predominantly short- to middle-term (a few weeks up to 6 months, in certain
cases 1 year). ·
Traineeships within education can be an optional
or mandatory part of the curriculum or of the graduation procedure.
Traineeships can be part of labour market programmes aiming at connecting or
reintegrating people with the labour market. ·
In most Member States, traineeships and related
rights and conditions are only regulated in a fairly general way at best and
may not be regulated at all. In a majority of Member States, a traineeship
contract in particular explicitly is not an employment contract. This document deals
with traineeships only. For greater details on the distinction between
traineeships and apprenticeships, please see Annex I. 2.2. Types
of traineeships and their regulation One may distinguish
five major – partly overlapping - types of traineeships:[5] 1.
Traineeships forming an optional or compulsory
part of academic and/or vocational curricula (i.e. traineeships during
education); 2.
Traineeships which form part of mandatory
professional training (e.g. law, medicine, teaching, architecture, accounting,
etc.); 3.
Traineeships as part of active labour market
policies; 4.
Traineeships on the open market, generally after
completion of studies and/or as part of job search; 5.
Transnational traineeships. Type 1 and 2
traineeships are linked to educational and training programmes and curricula
and are often a precondition for diploma or licences to practice. Educational
institutions are generally involved in their organisation and monitoring.
Similarly, employment services are involved in the organisation of type 3
traineeships. Generally, the most tightly regulated traineeships relate to the
case of specific professions whose exercise requires the completion of
compulsory traineeships as part of mandatory professional training by relevant
bodies and professional associations. In almost all Member States, the most
regulated professions with long periods of traineeships are those related to
health (medicine, nursing, pharmacy, dentistry, psychology, psychotherapy,
veterinary medicine etc.) and law (lawyers, barristers, judges); compulsory
traineeships are also associated with some technical occupations such as
architects and engineers, but may also be required for professions in media and
journalism, hospitality or accountancy. Traineeships that are part of ALMP for
young unemployed persons are typically also highly regulated. In contrast,
open-market traineeships (to be understood as those in which no educational
institution participates in the definition of the learning content and in the
organisation of the traineeship) are subject to much less regulation and their
definition and organisation is generally left to the bilateral agreement of the
parties involved. Type 5 traineeships, i.e. those involving trainees and host
organisations from different countries, are less common at present[6]. Regulatory framework The regulation of
traineeships differs considerably not only between the different types of
traineeship, but also across Member States. At one end France regulates all types of traineeships directly under a series of laws, while in countries such
as the Bulgaria, or the UK there is no specific national legal framework for
trainees[7].
In six Member States (CY, IE, LT, LU, LV, UK), no legal definition of
traineeships exists. Moreover, while traineeship contracts tend to be offered
as a common practice in most EU Member States, less than half of the Member
States have provisions in place regarding duration, remuneration or social
protection coverage of traineeships, and practices with regard to these
elements differ widely. Among the issues addressed is whether repeated
traineeships are possible with the same employer, and whether trainees should
be compensated and, if so, by how much and whether minimum wage rules should be
applied. Table 1 summarises the
situation in terms of these key regulatory issues in EU Member States: Clearly, differences in the regulatory framework are rather
important – in particular remuneration and social protection issues are not
regulated in 11-12 Member States. It is also remarkable that in 11 Member
States there are still legal and administrative barriers to trainees coming
from another Member State. Table 1. Key differences in regulatory
framework Issue || Yes || No || Unclear Legal definition of traineeships || AT, BE, BG, CZ, DE, DK, EE, EL, ES, FI, FR, HU, IT, MT, NL, PL, RO, SE, SI, SK || CY, IE, LT, LU, LV, UK || PT Legal provisions on duration || BE, BG, DE, EE, EL, ES, FI, FR, HU, IT, LU, MT, PT, RO, SI, SK, UK || AT, CY, CZ, DK, LV, NL, SE || IE, LT, PL Legal provisions on remuneration || EL, ES, FR, HU, IE, LT, MT, PT, RO, SE, SI, SK || AT, BG, CY, CZ, DK, FI, IT, LU, LV, NL, UK || BE, DE, EE, PL Legal provisions on social security protection || AT, BE, BG, CY, EL, FR, LT, RO, SE || CZ, DE, DK, EE, ES, IE, IT, LU, LV, MT, NL, PT || FI, HU, PL, SI, SK, UK Absence of legal and administrative barriers for trainees from other EU MS || DK, IT, MT, SE, SI || BE, DE, EL, ES, FR, IE, LU, LV, NL, PL, RO || AT, BG, CY, CZ, EE, FI, HU, LT, PT, SK, UK Traineeship contract offered as a common practice || AT, BE, BG, DE, DK, EE, EL, ES, FI, FR, IE, IT, LT, LV, MT, NL, PT, SI, UK || CY, LU, PL || CZ, HU, RO, SE, SK Source:
Traineeship study, European Commission (2012a) An example of a stricter regulatory
approach: the US In terms of regulation,
it is interesting to compare the case of the EU with the US because, although the labour market is less regulated and the level of youth
unemployment is different, the concerns voiced over traineeships are very
similar and the trend toward a higher number of traineeships is equally
prominent. On traineeships, the U.S. clearly follows a more stringent regulatory approach than many, probably the majority,
of EU Member States. The primary law governing workers’ rights to fair
compensation is the Fair Labor Standards Act of 1938 (FLSA). The FLSA requires
employers to provide the federal minimum wage to most workers. To determine
whether an intern qualifies as an “employee” under the FLSA, the Department of
Labor has developed a six-point test for employers to apply, based on a 1947
Supreme Court ruling. All six points must be met in order to determine that
trainees are not fully protected “employees”; if only one of the points
is not met, the trainee would be considered an employee under the FLSA, and
hence entitled to receive the federal minimum wage. These six points include
(Edwards, Hertel-Fernandez, 2010): 1.
The training, even though it includes actual
operation of the facilities of the employer, is similar to that which would be
given in a vocational school; 2.
The training is for the benefit of the trainee; 3.
The trainees do not displace regular employees,
but work under close observation; 4.
The employer that provides the training derives
no immediate advantage from the activities of the trainees and on occasion the
employer’s operations may actually be impeded; 5.
The trainees are not necessarily entitled to a
job at the completion of the training period; 6.
The employer and the trainee understand that the
trainees are not entitled to wages for the time spent in training. Particularly points 1-4
are quite restrictive. In practice however these guidelines are hobbled by
legal and technical issues making their application far from straightforward;
partially as a result of this they have not been extensively enforced until
recently (Curiale, 2010). However, this may be changing as a result of suits
filed by former interns against several well-known corporations (Time Magazine,
May 2 2012). This is reportedly already leading to a perceptible drop in unpaid
internships (USA Today, July 3, 2012). Lack of official statistics Partly as a result of
the wide variation in type and official recognition of traineeships, there are
no official statistics on trainees. Academic research on traineeships is
scarce, particularly as regards quantitative studies, and tends to be
fragmentary and country- and situation-specific. This document is mainly based
on the Traineeship study, which provides a first EU-wide evidence base on
traineeships. A few studies and survey results have been quoted when
particularly relevant; however it has to be born in mind that their methodology
is different, so that caution is needed in comparing their results directly. Although the lack of
official statistics makes it impossible to measure precisely trends over time,
available evidence suggests that traineeships, whether national or transnational,
are becoming significantly more common in the EU and worldwide. There is wide
consensus that traineeships are becoming a standard feature of young people’s
transition from education and training to the labour market. The Traineeship
study found a definite upward trend over time in almost all Member States. For
example, a study found for Germany that the share of those who did a
post-graduate traineeship was 25% amongst 18 to 24 year olds, while only 17 %
of those in the 30-34 age bracket had done one after their studies. In the US, the National Association of Colleges and Employers found that 50% of graduating students had
followed internships in 2008, up from the 17% reported in a 1992 study by Northwestern University (Greenhouse, 2010). In Japan, too, the so-called 'freeters'
or furita are becoming more common (Hommerich, 2008). 2.3. Benefits
and costs of traineeships The spread of
traineeships is due to a growing realisation of their benefits to both trainees
and employers, while also responding to the overall economic and labour market
situation. These benefits have implications at the macro level, too.
Traineeships also have a series of costs, at individual level and for society
at large. Trainees A positive traineeship
experience can play an important role in building the foundation of a
successful career. This is because traineeships, owing to their practical,
hands-on nature, are increasingly being seen as an important contribution in
terms of acquiring useful skills, both during studies and later, during the
transition to employment and the subsequent career. Traineeships can supply
students with several benefits: 1) the ability to relate classroom
concepts to practical applications, 2) an improved knowledge of industry career
paths, 3) crystallization of interests and career ambitions, 4) a reduced shock
upon entering the workplace, and 5) faster advancement (Coco, 2000). Traineeships have
further been found to enhance productivity by increasing students’ knowledge
base and motivation (Beard, 1998); and to improve not only the transition from
school to work, but even students’ grades while education is ongoing (e.g. in
accounting) (Knechel, 1987; English, 1993). The exposure to the
workplace enables students to obtain a realistic preview of the business
environment and corporate culture and helps bridge the transition from
university life to professional work life, notably in the case of expatriate
trainees (Feldman, 1998). Traineeships can enhance students’ chances of
receiving job offers at the firms where they trained, or elsewhere due to
signalling effects related to previous traineeships; work performance of
professionals that have had a traineeship experience, as measured by their
annual performance valuation, was better compared to those that had not, and
their retention and promotion rates are also significantly higher (Höft and
Hell, 2007; Siegel, 2010, 2012). Trainees also face
costs. The major component is the living cost and, in the case of transnational
traineeships, costs due to the need to move to another country; in addition,
particularly after the end of the studies, a traineeship involves an
opportunity cost in terms of foregone earnings (as compared to regular
employment); if the traineeship is during the studies, the opportunity cost
might take the form of a possible delay in finishing one’s studies. Finally,
trainees face search costs for finding and applying for a traineeship. Host organisations One of the most
important benefits of traineeships to host organisations consists of a better
screening of job applicants, based on direct experience with the candidate
rather than 'signals' (Stolorz, 2005), as shown by higher retention rates of
employees who were in traineeships in the same company[8]. Traineeships also
may help attract more or better job candidates. Finally, host organisations can
utilise the trainees, alongside regular employees, to conduct certain work
activities at lower or no cost, while benefiting from trainees’ up-to-date
academic knowledge and skills. In a 2011 survey of 218 top, senior and middle
level managers in the UK, 52% said that the main reason for taking on interns
was to identify new talent for the organisation, while 17% said it was to get
work done more cheaply. A 95% share of them believed that interns were useful
to the organisation[9].
A company’s involvement
in a well-designed traineeship programme can also be seen as a mark of business
quality. The provision of quality traineeships is sometimes utilised as an
integral part of an organisation’s CSR (Corporate Social Responsibility) and
employer brand[10].
The costs of a
traineeship for a host organisation include, besides any direct remuneration,
mainly the training costs, typically related to the time that trainers or other
employees have to spend overseeing the trainee. In addition, costs include the
provision to the trainee of office space and equipment. Unfortunately, no
studies quantifying training costs could be identified. Edwards and
Hertel-Fernandez (2010, p. 5) provide two examples which can be taken to
represent a plausible range of training costs for the US (US$ 400 and US$ 3500). In a more dated contribution, McCaffery (1979) estimated the
total direct costs of one specific traineeship programme at US$ 2000 per
trainee. While training costs
and oversight costs can be fairly limited in case the tasks assigned to the
trainee are easy, they can be fairly substantial in ambitious, high quality
programmes. Box two provides two case studies. Box 2. Case studies - the benefits and costs of providing high quality traineeships Swedbank's 'Young Jobs' project In 2010 Swedbank launched the project “Young Jobs”. The idea is to use Swedbank’s extensive network of branches to encourage the creation of trainee positions for people aged between 18 and 24. The objective is not only to create trainee positions at the Swedbank and related Savingsbanks' branches, but also to encourage the bank’s corporate clients (businesses and municipalities) to offer trainee positions themselves. The bank’s employees have a good understanding of the local companies’ operations as well as their needs and are therefore in a good position to identify possible job openings. The project is conducted in cooperation with local employment offices. To support the project, the website www.ungajobb.se, was created where young people can search for new trainee opportunities while companies can enroll in the project. The total number of traineeships created by the project was 3,000 – including 400 traineeships within Swedbank, 1,600 traineeships in the Savings banks' 600 branches as well as 1,000 further traineeships at partner companies. The traineeships included three months of practice also supported by the Swedish Public Employment Service Centre. Two full days of education, as well as five days of tutoring by staff members ensured the high quality learning content. Swedbank’s branch office managers evaluated the project positively: - 82 per cent said that Young Jobs has actively contributed in strengthening the bank’s brand. - 65 per cent believed that Young Jobs has increased the confidence of personnel. - 64 per cent answered that they are continuously planning to invite more trainees. - 26 per cent stated that the project has increased business among current clients. - 18 per cent point out that the project has resulted in new clients. Of the approximately 400 apprentices within the bank 70% have been offered some form of employment after their internships. The costs of the programme for the bank are estimated at around € 1,200,000 per year, i.e. about € 3,000 per trainee. Audi traineeship project in Brussels Audi Brussels has recently launched an initiative together with two Belgian VET schools with the aim of providing a high quality technical traineeship. Although the traineeship borders on an apprenticeship in terms of the organisation and ambition of the scheme, it represents a useful example of an unpaid, but high quality traineeship. Audi provides traineeship placements for 10 VET students, who spend a total of 600 hours in 75 days with the company (one day per week plus a 3 week workshop). The objective is to offer all the trainees a job at the end of the programme. The costs faced by Audi include two persons (not full-time) following the programme, organizing a course for 10 trainers, and about € 300,000 to adapt the facilities to the needs of the programme. Audi’s motivation is that it allows the company to train its future employees, thus reducing later recruitment costs. The programme is also part of the company's CSR policy; it helps to reinforce the image of Audi in Belgium. Sources: Swedbank AB, Audi AG Socio-economic costs and
benefits At macro-economic
level, besides the direct productivity benefits, traineeships can improve
labour market matching, ease education-to-work transitions and promote labour
mobility, notably by decreasing search costs - both for enterprises looking for
new staff and for young people, who, having just begun their work experience,
may be uncertain about their skills, preferences and the direction in which to
develop their career. The reduction in matching costs appears particularly
beneficial in those countries where the costs of hiring and dismissing an
employee are highest. Social costs can also
arise if traineeships, particularly repeated ones, displace regular employment,
notably entry-level positions usually offered to young employees. In light of
the long-term benefits of successful traineeships, however, the bulk of costs
appear to be concentrated in low-quality traineeships with little learning content,
where the time spent on the traineeship does neither lead to significant
productivity gains nor entails positive signalling effects. These traineeships
therefore provide little or no benefit in terms of the education-to-work
transition. Other social costs relate to the spread of unpaid or low-paid
traineeships which may limit the career opportunities of those from
disadvantaged backgrounds, particularly in certain professions. Against the
background of raising student tuition fees and tightening labour markets it may
indeed be increasingly difficult for students or graduates from less wealthy
backgrounds to afford to work for free. Such difficulties are exacerbated in
the case of transnational traineeships. This in turn would prevent firms from
identifying the most talented for some of their future top jobs. 3. Consultations
and stakeholders views Public and social partner
consultation On 18 April 2012 the
Commission adopted the communication ‘Towards a job-rich recovery’[11], which was
accompanied by the staff working document 'Quality Framework for Traineeships'[12] that launched a
public consultation. The Commission asked stakeholders whether there is a need
for such an initiative, what should be the scope of the initiative, which
quality elements would have to be included and what form the initiative should
take. Between 11 September and 23 October 2012, social partners were consulted
on their views on the possible direction of an EU initiative on a quality
framework for traineeships. The public consultation
received over 250 responses of which 29 came from national and regional
governments (ministries and agencies), 8 from trade unions, 40 from employers’
organisations and business representatives, 14 from youth (umbrella)
organisations, 33 from education institutions, 11 from other organisations and
117 from private individuals. Trade unions, as well
as NGOs, youth organisations, educational institutions, agencies involved in
transnational traineeships and most individual respondents generally supported
a Commission initiative (some asking for a binding legal instrument, others
preferring non-binding recommendations); employers' organisations, chambers of
commerce and industry – while acknowledging the positive role of traineeships
in school-to-work transitions and in acquiring skills – typically adopted a
more sceptical stance, with some questioning the need for an EU initiative.
Those contesting the need for an EU initiative mostly came from Member States
with comparatively well-developed, structured apprenticeship systems and
traineeship markets (e.g. Germany, Austria, and Denmark). Both employer
organisations and Member States often referred to the need to keep the
framework sufficiently flexible so that diversity of national systems and
practices can be taken into account. Opponents of EU action argued that minimum
requirements for traineeships should not be set at the European level, due to a
lack of EU competence particularly on the issue of remuneration. Concerns were
also raised about traineeship schemes becoming overburdened with too many legal
or administrative procedures that could discourage companies from taking on
trainees, thus depriving young people of valuable work experience
opportunities. Opinions about the
scope of a possible initiative were varied as well. Many educational
institutions preferred to keep the scope limited to traineeships that are part
of study curricula/programmes; while other respondents including most employers
suggested limiting the framework to 'open market' traineeships. Some comments
(mainly from the world of education) enquired why apprenticeships should not be
covered by the initiative. On the quality elements
most respondents agreed with the Commission's analysis/definition (traineeship
contract, clear objectives and content, limited duration, adequate social
security/remuneration etc.), however businesses and employers' organisations in
particular argued that remuneration and social protection issues may not fall
under EU competence and in any case small businesses would have problems
applying them. Several respondents
urged the Commission to provide financial support to increase the number of
traineeships, eventually by launching large scale EU-level programmes. In their replies to the
first-stage consultation EU social partners confirmed the positions taken in
the public consultation. At the Social Dialogue Committee meeting of 23 October
2012 employer's organisations expressed the readiness to start discussions on
traineeships as part of the EU social partner autonomous negotiations on a
Framework of Action on Youth Employment. The European Trade Union Confederation
explained that while it is fully committed to participate in the EU social
partner's negotiations on the Framework of Action, it considered that the
discussions under the Framework are not, at this stage, the appropriate place
for negotiations on traineeships under Article 154 TFEU. Small and medium enterprises The Commission launched
a specific consultation of small and medium enterprises (SMEs). The Commission
sent out a questionnaire targeted at SMEs through UEAPME. The results
highlighted that small businesses face particular difficulties when offering
traineeship placements due to relatively higher levels of costs. However,
traineeships offered important advantages for SMEs, in particular the
possibility of screening potential future employees, recruiting and retaining
high-skilled workers and enhancing the corporate image at relatively low cost.
SMEs favoured excluding open market traineeships from the scope of any EU
initiative. Any proposal by the Commission should be non-binding (e.g. general
principles) and take into account SME specificities. SMEs called for increased
EU resources to increase the availability of traineeships, both national and
transnational. Consultations within the
European Commission DG Employment has been
collaborating with DG Education and Culture on the issue of traineeships.
Further to the EMPL-EAC cooperation, DG EMPL set up an Impact Assessment
Steering Group with the involvement of SG, SJ and DGs EAC, ECFIN, ENTR, HOME,
INFSO/CNECT, MARKT and RTD. Recommendations from the
Commission Impact Assessment Board An
earlier version of this paper was submitted to the Commission Impact Assessment
Board, which examined it on two occasions, , requesting improvements to clarify
the policy context and the problem definition, to better demonstrate the
necessity, added value and proportionality of EU action, and to better present
the available policy options and the effectiveness and efficiency of the
presented avenues for action. The document was therefore amended by, inter alia, including
more detail on the Treaty procedure for Social Partners consultation and on the
concrete problems faced by trainees, by adding some new sections and an annex
on market failure, by a clearer specification of subsidiarity considerations
applying to this case, and by adding substantially more detail on the ways in
which policy action could take form and the foreseeable impacts of the various
options considered. It was also clarified that traineeships are not employment
contracts in most Member States, and details were added on which aspects
justify an EU action and which do not. It was also indicated that a more
detailed assessment of impacts will be carried out following the results of
this consultation, in case the Commission decides to present a proposal. Traineeship survey by the
European Youth Forum The European Youth
Forum (EYF) is the most important Europe-wide umbrella organisation
representing young people in the EU. It conducted an online survey in 2011
among (ex)-trainees about their experiences and concerns regarding
traineeships. More than 3,000 young people responded to the survey. Results
(see Box 5) confirm that there is room for improvement in the quality of
traineeships. As a follow-up to the
survey, the European Youth Forum – together with other civil society
organisations and 31 MEPs – presented a European Quality Charter on Internships
and Apprenticeships. The Charter underlines that traineeships and
apprenticeships should be primarily a learning experience and should not
replace jobs; that a traineeship should be based on a written contract and
should be limited in time; that a mentor/supervisor should provide guidance
throughout the traineeship; that the trainee should receive reimbursement of
costs or should have the right to receive food, housing, and public
transportation tickets instead; that decent remuneration should be provided for
work carried out additional to the requirements outlined in the contract; and
that clear evaluation criteria of the traineeship period is needed. 4. Problem
Definition 4.1. Nature
and extent of problems The analysis carried out in the Traineeship
study shows that concerns with traineeships usually take four main forms:
insufficient learning content, lack of or low compensation, unsatisfactory
working conditions, and low level of intra-EU trainee mobility (see Box 3 for a summary of the qualitative findings and Table 2 for some relevant quantitative evidence). Box 3. Main concerns identified by the
Traineeship study Insufficient learning content of the
traineeship is one of the most frequent problems. Learning content is more
likely to be formally defined where an educational institution is involved. Traineeships
involving just the trainee and the employer more often lack content definition.
This does not necessarily mean that these placements are entirely devoid of
structure and content. For example, in the UK many employers voluntarily
provided well-structured traineeships with pre-defined content. It is
noteworthy however that even in Member States where regulation exists to define
the content of traineeships (e.g. AT, LU), there are concerns that employers do
not always abide by these rules. Another worrisome point in relation to traineeships was found to be
the lack of proper social protection coverage (most often only health,
and in some cases occupational risk/accident insurance is being offered to the
trainee). Traineeships which form part of government sponsored programmes
increasingly oblige employers to pay the trainees’ social security
contributions, either in full or in part through subsidies (e.g. in CY, EL,
PL). The lack of compensation or low pay and the prospect of
exploitation are general concerns mainly in the case of traineeships in the
open market and mandatory professional training schemes. This is one of the
most common theme and starkest message emerging in the study as well as in
public debates, available literature, and information provided by trainees. The
risk of substituting regular employment by traineeships is greater in Member
States with high unemployment and/or unfavourable labour market conditions for
young people (e.g. EL, ES, IT, PT). However, using traineeships as free labour
is a growing phenomenon also in other countries, where young people might have
to do several traineeships before they find a proper job. Whether traineeships
should be paid or not is a contentious issue in many countries. Employers’
organisations often argue that trainees gain work-related experience which
will improve their employability, while taking on board a trainee can be
time-consuming and resource intensive for the host organisation. On the other hand, trainees who are not or insufficiently compensated
have to rely on other sources of financial support, including own and/or family
resources. This, in turn, raises concerns about equity of access, since
those from less privileged backgrounds may not be able to draw on such
resources in order to undertake traineeships to gain work-related experience
and enhance their employability. Trainees are reported to be in many cases
asked to carry out tasks usually performed by regular, fully-paid staff for
which they receive no or low compensation. The issue of no or low trainee
compensation (associated with poor trainee-related terms and conditions such as
lack of social security coverage) is critical because a significant segment of
young people may have to undertake a series of traineeships before securing
stable employment. This can, in turn, seriously impede their ability to become
financially self-sufficient and lead an independent and autonomous life.
Further, there are indications of a gender ‘pay gap’ in traineeships with a
larger proportion of women in unpaid or low paid placements. Finally, low quality seems to be more common where there is a lack
of monitoring and clear traineeship linked objectives. Source: Traineeship study, European
Commission (2012a) Table 2. Indicators
on the Quality of Traineeships Indicator || Data || Source(s) || Country Learning content Mentor' s performance: good or excellent || 55% || EYF Survey, p.19 || EU-wide Mentor' s performance: less than satisfactory or not satisfactory || 18% || EYF Survey, p.19 || EU-wide Relevance to respondents' field of study: good or excellent || 55% || EYF Survey, p.19 || EU-wide Relevance to respondents' field of study: not satisfactory || 6% || EYF Survey, p.19 || EU-wide Beneficial in terms of extending experience and practical knowledge || 83% || Fuchs / Ebert (2008) || DE Good mentoring || 81% || Fuchs / Ebert (2008) || DE Useful in terms of learning outcomes || 70% || Briedis / Minks (2005) || DE Duties/tasks at a good level || 67% || Briedis / Minks (2005) || DE The traineeship content was good || 64% || Kravietz (2006) || DE Usefulness for professional development || 57% || Kravietz (2006) || DE Usefulness for professional orientation || 66% || Kravietz (2006) || DE Good mentoring || 61% || Kravietz (2006) || DE The tasks contributed to learning || 88% || OPALA survey (2010) || FI Compensation Traineeship was paid || 51% || EYF Survey, p. 15 || EU-wide Compensation covered living expenses || 25% || EYF Survey, p. 15 || EU-wide Working conditions Feeling of being exploited || 61% || Fuchs / Ebert (2008) || DE Traineeship plans lacking / not followed / not useful || 62% || Briedis / Minks (2005) || DE Counselling / support during the traineeship was sufficient || 81% || OPALA survey (2010) || FI General level of satisfaction || || || Trainees completely satisfied with their internship || 25% || Internocracy (2010) || UK Traineeships felt to be poor quality || 30-40% || Traineeship study, p.831 || UK Comparison mandatory vs. open-market traineeships VET students satisfied/very satisfied || 88% || Traineeship study, p.151 || AT University applied sciences graduates "at least satisfied" || 80% || Traineeship study, p.151 || AT General University graduates "at least satisfied" || 70% || Traineeship study, p.151 || AT Young graduates "at least satisfied" || 52% || Traineeship study, p.151 || AT A first group of problems relates to the
high share of traineeships characterised by insufficient learning content.
Insufficient learning content might mean that the host organisation does not
ensure a proper induction training or the trainee does not get a proper
explanation/description of the work of the organisation and the underlying
issues within the industry; it might mean that the host organisation does not
ensure a mentor who follows the work of the trainee and supports him or her
throughout the traineeship, or the appointed mentor does not fulfil his or her
tasks. A traineeship with insufficient learning provides only a limited (or no)
support to smooth education to work transitions since the trainee will acquire
less practical skills by the end of the traineeship then he or she optimally
could have acquired through a high quality traineeship. Learning content tends to be most deficient
where there is no well-structured written agreement between the trainee and the
host organisation, specifying the purpose of the traineeship, the skills to be
learnt, the roles and responsibilities of all parties involved, and the
supervision, mentoring and monitoring arrangements (Traineeship Study, p. 137).
These problems have been especially observed for open market traineeships; in
the traineeships where learning institutions are involved problems exist, but
are less common because the learning institution usually ensures minimum
standards ahead of the traineeship, through guidelines and selection of host
organisation, and ex post if negative feedback is received. A case study about
a low-quality traineeship and the reaction by the learning institution is
described in Box 4. A share of 18%
of traineeships is reported to be unsatisfactory with respect to learning
content in the EYF survey (see Box 5; other surveys find even higher shares;
see Table 2). This is less than the share of unpaid traineeship, which surveys
results consistently indicate at around 50%, indicating that many unpaid
traineeships are satisfactory from a content viewpoint. Box 4. Case study: A low learning content experience “A traineeship experience abroad is important, but in my case it’s been a wasted opportunity” says G.C., who did a traineeship as a fourth year law student. “I applied for a five-month traineeship organised by my university at a law firm in London, in the department for international property purchases. There were almost exclusively lawyers from my country there. My role was essentially making photocopies. My working time was the same as for the colleagues, I tried to be proactive but de facto I just did secretarial work like handling email and archiving documents. There may have been contributing factors for this, as the law firm had just moved and I did not know English perfectly. But I was not the only one in that situation; in the firm there were other two boys whose judgement was equally negative. I know that their tutor intervened doing some checks on the traineeships although I have the impression that my own complaint did not have any effect. Once back I explained to the responsible department in my university how things had gone and that there was no underlying project to make the traineeship useful. Nothing happened, but I know that in other such cases traineeships were stopped. My impression was that they were just looking for people to put to work for free; they were continuously looking for trainees, certainly not with training purposes. However the experience has not been totally negative, I noticed that my traineeship abroad is the first thing they note in interviews, but it could have had more value’. Source: abridged from Repubblica degli Stagisti, E. Della Ratta, 8 March 2010 A second group
of concerns relate the lack of or the low level of compensation. The EYF
survey indicates that only every fourth trainee was remunerated or compensated
enough to be able to cover his or her expenses. Lack of compensation explains
concerns about equity of access and merit-based career opportunities, and
raises issues about employers using traineeships as a form of unpaid employment
with ‘cheaper’ trainees being used for entry level jobs and/or other job
vacancies instead of regular staff. In the UK, a 2011 survey found that only
62% of permanent employees thought that trainees were treated fairly (Heath,
Potter 2011). A third group of problems relate to working
conditions other than compensation, such as long working hours, substandard
working conditions, lack of coverage for health and safety or occupational
risks, lack of clarity on the applicable legal regimes, equal treatment, and so
on. Table 3 supplies some greater detail on the
concrete problems typically encountered by trainees, their practical concerns
and ideas for improvement, as identified by an online poll of a UK trainee organisation, “Changing internships in the UK”. The ranking of votes also provides
some insight on the relative importance of problems, as perceived by trainees,
although it should be stressed that online polls are not statistically
representative and have a purely indicative nature. Apart from the specific
aspect about the London-centric nature of UK internships, which is due to a
high concentration of professional services firms in the capital, the concerns
put forward are very similar to those put forward in other Member States (see
also European Youth Forum survey results in Box 5). Table 3. Internships for change poll, UK Ideas || Votes Pay interns National Minimum Wage || 20.90% Interns should be viewed as potential employees, not cheap labour || 13.70% A youth-driven quality mark to identify the organisations with the best internships || 11.40% Organisations should have to adhere to a minimum set of standards || 7.90% The London-centric nature of internships should be challenged || 5.60% Profit-making organisations should pay interns || 5% Organisations should define the nature of the work before the internship starts || 4.40% Set up an organisation you can turn to protect your rights if being treated unfairly. || 3.50% Make employers aware that they are supposed to have educational value for the intern || 3.20% Internships should be advertised to everyone || 2.80% Send a letter to companies/MPs advertising unpaid internships reminding them of their duty of care/law || 2.60% Distinguish between interns and volunteers || 2.30% Interns should be offered cheaper accommodation || 2.30% Unpaid internships should not require a commitment of more than 3 months. || 2.30% Others || 11.80% Total || 100.00% Concerns by topic (excl. ‘others’) || Working conditions, fairness || 39.70% Learning content || 30.50% Wages and compensation || 29.70% Source: Data
downloaded from Internocracy website on October 13, 2012 and elaborated by
Commission services. The poll is ongoing. Finally, a
fourth group of problems that is typically not highlighted by trainees’
organisations or national analysis but that is of concern from the perspective
of the integration of EU labour markets is the low level of intra-EU
mobility for trainees. This has important negative consequences for the
integration of the EU labour markets and prevents young people living in
countries with insufficient or unsatisfactory traineeship offer to profit from
better opportunities in the EU single market. The problem will be discussed
further in section 4.4. Box 5. A closer look at data on traineeships – the European Youth Forum survey Given the lack of official statistics, the only quantitative evidence available is represented by survey results. Although compiled from different populations and using different methodologies, they generally seem to supply encouragingly similar estimates on parameters such as rate of job retention after completion of a traineeship (which has been estimated at 12%, 14% and 16% in three different surveys in different EU countries). One of the most important sources on EU traineeships is the European Youth Forum Survey conducted among (ex)trainees in the EU from April to July 2011. The 3028 responses provide a large enough sample for drawing some conclusions concerning quality concerns related to traineeships, as well as the dimension of the problem. Most trainees are in their twenties and traineeships typically last between 4 and 6 months. The majority of respondents (63%) have done one or two traineeships (but 37 % has already done 3 or more) and the most common ways of finding a traineeship is by applying directly to organisations, searching on the internet, and making use of personal connections. With regards to the motivation for doing a traineeship, improving their CV and improving future job opportunities were the two most significant factors. Some also wanted to learn more about a particular organisation or field of work, or get first-hand experience of working life. A high number of trainees also cited a lack of available jobs as a motivation. The quality of the traineeship is a core concern of the trainee, and takes precedence over other factors such as remuneration. Although three out of four respondents were not (51%) or insufficiently (24%) compensated and had to rely on parental support, savings, or other forms of external financial means, they seem more interested in the potential gains from the traineeship than its costs. An example is the traineeship satisfaction rates of the post-studies (open market) trainees, which did not differ from the average despite the fact that they more often received no or low pay. A 16% share of trainees managed to turn their traineeship into a job with their host organisation afterwards. A 25% share of trainees report not having had a written traineeship agreement (which the Traineeship study identified as an important quality indicator). 54% of (ex)trainees were completely satisfied with the mentor’s performance (excellent or good), and further 19% evaluated the mentor as satisfactory – meaning that every fourth trainee lacked a good mentor. The learning content of the traineeship was relevant to the studies/career interests for 56% of the trainees (excellent or good), and satisfactory for further 24%; however this was not the case for every fifth respondent. 4.2. Number
and share of low quality traineeships Estimating the number of low quality
traineeships is not straightforward and subject to wide error margins. The
traineeship study estimates that in France and Germany there are at least 1.5
million trainees each year. Estimates indicate that in Italy the number of trainees is of the order of half a million every year, while for the UK estimates indicate up to 280,000 open market traineeships plus up to 118,000 students in
undergraduate courses mixing work experience with training. Assuming no
substantial differences in the share of trainees in the population across the
EU (admittedly a strong assumption), this leads to an estimate of between 4 and
5 million trainees in the 27 Member States in a given year.[13] Another way to formulate an estimate is by
looking at the number of tertiary education students in the EU and use this as
a basis for a projection on the basis of assumed activity rates. According to
Eurostat, in 2010 there were 19.8 million students enrolled in tertiary
education courses (ISCED levels 5 and 6) in the 27 Member States. Assuming that
during the average studies of 4 years 80 % of the students will eventually
participate in one or more traineeships of altogether 6 months on average, one
arrives at 4 million trainees per year. One should add to this those upper
secondary level (ISCED 3 and 4) students who may also do a traineeship, even if
in smaller numbers. This confirms the estimate of 4 to 5 million trainees per
year. To estimate the number of low-quality
traineeships, survey results from the European Youth Forum were used (“Interns
Revealed: A Survey on internship quality in Europe, Brussels 2011”), which
offers the advantages of a relatively large pool of respondents and of a
Europe-wide coverage. An 18.0 % share of respondents indicated that the “mentor
performance” was unsatisfactory or less than satisfactory, and a very similar
share (18.2%) classed as unsatisfactory or less than satisfactory the relevance
of work performance to the content of the studies; either share may be taken to
represent a traineeship of insufficient quality. The share indicating a more
negative response (i.e. not satisfactory) was respectively 8.2% and 6.5%.
Applying the lower of the two shares to the estimated total number of
traineeships (4 million) results in about 300 thousand low quality (i.e.
non-satisfactory) traineeships per year, and about 500 thousand insufficient
quality (less than satisfactory) traineeships. This value should be seen as an
indicative estimate only, taking into account exclusively the learning content,
not the issue of compensation. Under certain assumptions, the share of
traineeships without satisfactory learning content can further be estimated at
some 20% of all traineeships, and at about 50% of unpaid traineeships. Table 4. Estimates
of the number of traineeships and their characteristics Total number of traineeships || 4,500,000 || Insufficient quality || 520,000 || Low quality || 290,000 || Average duration (months) || 4 || Assessing the costs of low quality
traineeships is complicated, in the present crisis juncture, by the fact that
trainees may not have a meaningful alternative in the short run, as job
opportunities are scarce and there is stiff competition even for traineeship
positions (the EYF survey indicates that 40% of post-study traineeships were
accepted because no jobs were available). In such cases, the opportunity cost
of a bad quality traineeship is reduced. Low-quality
traineeships are likely to affect more often trainees from a less privileged
background One
particularly unwelcome aspect of low-quality traineeships is that they are
likely to affect more often those from a less privileged background and may
prevent their future access to high-productivity quality jobs in line with
their skills and study results. It is of course more difficult for the less
well-off to support themselves during a low-paid or non-paid traineeship and the
spread of jobs for which a traineeships constitute a de facto requirement
reinforces this concern. However, the structural differences of the traineeship
market from the regular employment market create a further barrier. In search of a regular employment
relationship, a candidate with a weaker training background will of course be
at a disadvantage against stronger candidates, but has nevertheless still a
chance to compete by reducing his or her wage requirements; the lower
reservation wage would also increase the pool of possible alternative job
offers. This is not possible in a traineeship market where often there is no
compensation at all. Available positions will tend to be awarded simply to
those having the best educational background, possibly also including earlier
work experiences, or other characteristics of value to the recruiting
organisation. Those with a weaker educational background thus risk having no
way of overcoming initial disadvantages, whenever the number of positions is
fewer than the number of candidates as is the case currently. In summary, those
from a less wealthy background as well as those with weaker educational
credentials will more often be victims of low-quality traineeships because they
have less scope for selecting the host. 4.3. Problem
drivers and trade-offs: The role of market failure The analysis above shows that while the
majority of traineeship positions on offer do provide adequate quality, a
substantial share does not. An important question is what are the key drivers
of this problem and whether it is due just to factors such as the current
economic crisis or to special characteristics of the traineeship market that
make it advisable to adopt specific measures. Market failure plays a more important role
in traineeships than in regular employment contracts because a much greater
share of the benefits that the trainee obtains from the arrangement is not
easily definable and quantifiable, and hence asymmetric information
likely to be more important. One of the main benefits, the possibility to be
hired, materialises even after the end of the traineeship (see Annex VI).
Therefore, the trainee cannot effectively compare the quality of the various
options with their respective costs, as is the case in any normal market transaction. As for host organisations, at present there
are few incentives for them to improve the quality of traineeship positions.
First, owing to high demand for traineeships the host organisation is under
little pressure to adopt any quality standard to attract candidates, and at any
rate is normally under no legal obligation to do so. Second, the lack of
generally accepted quality standards does not provide hosts with any guidance
as to how to improve the quality if they wanted to. Overall, the main incentives for a
company or other host organisation to provide good quality are currently
either their intention to hire trainees in the near future or their wish to
maintain a good reputation as employers or, more generally, out of respect for
Corporate Social Responsibility. Indeed, according to the EYF survey, those
trainees that were later recruited by their host organisation were much more
frequently sufficiently paid (67%) than the average rate of 25%; the same
result is apparent from an analysis of the hiring behaviour of participants in
a Quality Label initiative in Italy (see Box 6). However, an organisation that does not
intend to hire and does not assign a particular value to its reputation faces
few other disincentives to limit the training content to the minimum and may
just use traineeships as a source of cheap labour (‘free-riding behaviour’).
This set of incentives and disincentives explain why open market traineeships
are significantly more affected by low quality than the other types of traineeships,
where actors with a specific role in ensuring quality are present. Box 6. Comparing high quality with average traineeships using data from a quality label experience The Italian trainees’ organisation Repubblica degli Stagisti has launched a voluntary scheme, “OK Stage” whereby host organisations commit to respect a quality charter formulated by the organisation. The traineeship conditions, published on the site of Repubblica degli Stagisti include commitments on fair treatment. Currently, 36 host organisations have adopted the charter. It is interesting to compare the traineeships conditions offered by these quality traineeships with the average for Italy. • All these traineeships offer remuneration – a minimum of 200 euros per month for student traineeships and 500 euros for traineeships after university graduation. The average net compensation for university graduates amounts to 643 euros per month. In Italy, according to the Repubblica degli Stagisti traineeship organisation (RdS), only 47.6 % of traineeships were paid; note however that while the quality charter calls for compensation it did not specify its level. • The average rate of hiring after completion of the traineeship was 55%, compared to an estimate of 12.3% for traineeships as a whole in Italy (RdS, 2010). The much higher rate of hiring among participants confirms the link between quality and intention to hire on the part of the organisation. Trainees also face a cost in changing
companies and the duration of the traineeship is not very long anyway. As a
result, they are often ‘trapped’ into completing a bad quality traineeship, in
the hope that this will at any rate give them some kind of positive return
(i.e. a mention on their CV) compared to nothing - or even a negative signal to
potential future employers - if they quit the traineeship. All these factors – asymmetric information;
lack of general quality standards; lack of disincentives to firms to offer low
quality traineeships; incentives to trainees to stay on such traineeships – are
key problem drivers underlying current market failures as they create results
in a long-term equilibrium in which the market is unable to screen out lower
quality traineeships, which may remain on offer indefinitely and which may
coexist with a majority of good quality offers (this mechanism is explained in
more detail in Annex VI; see also Curiale (2010), Edwards, Hertel-Fernandez
(2011). Quality and compensation One element which should be reasonably
clear and which could, in theory, help the market to screen out bad quality
traineeship offers is compensation. Indeed quality and compensation are found
to be positively correlated, and in addition low or unpaid traineeships are
more likely to be of bad quality. Unfortunately however this does not solve the
market failure on quality, as there can be good reasons for a high quality
traineeship to be unpaid. In particular, a traineeship with high training cost
(see Box 2 for some relevant examples) may be economically sustainable for the
host organisation only at reduced or zero pay levels, given relatively low
trainee productivity. Compensation and labour market
conditions Low compensation is not only linked to the
characteristics of the traineeships itself, but also to the structural
characteristics of the labour market, in particular to the general level of
labour demand, labour market regulation, the existence of labour market
segmentation, and so forth. High youth unemployment will tend to
increase the number of candidates for each available traineeship position,
while negative growth prospects will induce businesses to curtail hirings, one
of the main motives for taking on trainees, but possibly also to increase
traineeship offers as replacement for more costly regular employment. Abundance
of candidates is likely to induce host organisations to offer unpaid instead of
paid traineeships or to reduce compensation for new positions. Compensation and legal status If demand and supply for traineeship
positions were in greater balance than is currently the case, some form of
compensation would probably be generally be paid to trainees even in the
absence of specific regulation. However, given the oversupply of trainee
candidates, rules on minimum compensation come to play an important role. In most countries, trainees are not
considered employees, and, as such, their rights, terms and conditions,
including remuneration are not tightly defined and regulated, at least as
regards certain types of traineeships. In general, legal provisions for the
trainee’s terms and conditions in most countries are very fragmented and do not
cover all types of traineeships in a consistent and coherent way. As shown in
Table 1, most countries do not foresee, or may not enforce, minimum
compensation. There is no consensus on the issue of the
appropriateness and level of trainee compensation. The main reason for not
paying wages to trainees is probably linked to the idea that traineeships
should be distinguished by employment contracts and be mainly about training.
This line of reasoning has a long tradition and is embodied e.g. in the US regulatory approach. In addition, binding rules on minimum compensation are generally
believed to have positive effects on equality but negative ones on employment
levels. Trade-offs There is clearly a trade-off between
ensuring availability of traineeship positions and imposing a minimum level of
compensation. It is less clear, however, what would be the effects of
increasing trainee compensation on the labour market as a whole. In a recent contribution,
Dolton and Rosazza Bondibene (2012) found that the negative employment effects
of minimum wages are particularly strong for young people. Widening the scope
of minimum compensations to traineeships could have similar effects, at least
in countries where traineeships are not subject to minimum compensation. On the
other hand, it could have positive effects on equity of access and income
inequality. Businesses could face higher labour costs with some negative effect
on profitability and competitiveness, while at the same time possibly
benefitting from better skills matching and higher retention rates. As for the other employees, theory suggests
that the net effect will generally depend on the degree of substitutability
between trainees and regular workers. If trainees and regular workers can
easily substitute one for another, higher compensation for trainees would
result in less traineeship positions and employment gains for regular workers.
Conversely, if trainees and workers are, instead, complementary, demand for
regular employees too should drop. Which of the two effects will dominate is an
empirical question that it is difficult to answer at present. The impact is
also going to depend on the degree of labour market segmentation. 4.4. Quality
issues and transnational traineeships Low quality is likely to affect the
development of transnational traineeships even more seriously than domestic
traineeships. This is because the problem of the lack of information about the
quality of traineeships becomes more acute in an international setting: ·
The differences in standards and the wide range
of diversity in labour market and traineeship regulation across Member States
make the situation in terms of quality standards even fuzzier than at home, and
informal learning through contacts and networks about the quality of
traineeships gets more difficult; ·
Ignorance of local conditions by foreign
trainees makes the awareness of rights more limited and complaining more
difficult; ·
Foreign trainees can screen companies with
greater difficulty only; ·
Foreign trainees may face higher costs in
changing companies if not satisfied. Their investment in going abroad is bigger
and the greater sunk costs incurred create a stronger incentive to complete a
traineeship even if it is low quality. Although a traineeship placement in a
different country can contribute to the increase of the employability of a
young person (similarly to the completion of studies abroad), still relatively
few young people complete a transnational traineeship. The 2011 Eurobarometer
shows that 53% of young people in Europe are willing or keen to work in another
EU Member State. Young people are much more mobile than the labour force as a
whole, as less than 3% of European workers are currently living outside their
home country. Demand for international placements funded under the Lifelong
Learning Programme (Erasmus and Leonardo da Vinci) systematically exceeds
supply. Similarly, traineeship placements offered by the European Commission
attract a large number of applicants partly due to the high level quality. Study mobility is overwhelmingly more
popular than company placements; within the Erasmus programme, it is undertaken
on average by about 5 out of 6 beneficiaries. The duration of study mobility
too is almost double that of placement mobility. This seems to be corroborated
by results of a survey by Deloitte (Deloitte, 2012) on students and graduates
in five Central European Member States (CZ, LT, LV, PL, SK) indicating that
domestic job/traineeship experiences outnumber international ones by ten to
one, even though young people from these Member States seem to be more mobile
than in some other Member States. Table 5. Share of transnational traineeships Indicators || Quantification || Source(s) || Year || Country Erasmus Programme || || || || Total number of Erasmus students || 231 408 || Erasmus Fact & Figures || 2010/2011 || EU wide Total number of Erasmus work placements (traineeships) || 40 913 || Erasmus Fact & Figures || 2010/2011 || EU wide Share of work placements in pool of participants to Erasmus programme || ≈ 17% || Erasmus Fact & Figures || 2010/2011 || EU wide (1/6) Leonardo Programme || || || || Leonardo mobility visits || ≈ 78 000 || Leonardo Fact & Figures || 2010/2011 || EU wide Total number of transnational traineeships (Erasmus + Leonardo) || ≈ 119 000 || Leonardo Fact & Figures || 2010/2011 || EU wide Total number of traineeships || 4 500 000 || || 2010/2011 || EU wide Share of transnational traineeships || 2.60% || || 2010/2011 || EU wide The number of transnational traineeships
may be estimated only very roughly given the lack of statistics on
transnational open market traineeships. Assuming these to be 20-25% of Erasmus
and Leonardo traineeships (see Table 5), the total number is probably in the
range of 150,000, compared to 4.5 million, i.e. around 3%. The contrast between the high interest for
studying abroad, and the low share of transnational traineeships, suggests that
institutional factors, such as lack of information, are holding back
development of the market. If a young person does not know what he or she can
expect in terms of conditions, learning content, social protection,
remuneration etc. in a foreign placement, his/her willingness to participate
will be limited. Organisations active on the international traineeship market
(e.g. Europlacement) confirm that there is high student demand for
international traineeships once a certain level of quality is guaranteed. It
seems therefore likely that there is significant potential for growth (at least
on the demand side) if the quality problem can be convincingly addressed. Need to improve access to information
on transnational traineeships documented by study A study commissioned by DG EAC on
conditions to promote transnational traineeships in Leonardo and Erasmus
(European Commission, 2011b) indeed gives a strong recommendation to improve
access to information on the legal and regulatory differences relevant to
traineeships between Member States and to introduce more concrete requirements
for the overall organisation of traineeships. Besides direct EU support, other public and
private transnational mobility schemes offer services to students as well as to
young people not in education and training. A recent study on mobility
developments in school education, vocational education and training, adult
education and youth exchanges commissioned by the European Commission (European
Commission, 2011a) identifies 1000 learning mobility schemes in Europe, in addition to the EU-funded Lifelong Learning sub-programmes for Comenius,
Grundtvig and Leonardo da Vinci and the Youth in Action Programme. Furthermore
the study shows that work placements are becoming an increasingly popular type
of mobility activity, indicating that “employability” is seen as an important
learning outcome. However, recognition and documentation of knowledge, skills
and competences acquired by participating in transnational mobility is still
undeveloped in many schemes. Common quality guidelines on traineeships would be
strongly relevant to these programmes Given persistent and sizeable skill
mismatches in EU Member States, the lack of development of international
traineeships seems to represent a lost opportunity to reduce structural
unemployment. A traineeship could constitute a way for trainees to try
international mobility without a large initial commitment, while businesses
could use traineeships as a first step to develop international recruitment,
useful especially in case of domestic skill shortages. Finally, given the strong boost to language
learning during a period of several months spent working in a foreign country,
disincentives to intra-EU trainees’ mobility may have a persistent cost in
terms of lost productivity. Research by Williams (2005) indicates that the use
of a second language in the workplace raises earnings by about 5 to 10 per cent.
5. Legal
basis and subsidiarity Legal basis According to Article
153 TFEU, the Union shall support and complement Member States activities in
the field of, inter alia, working conditions, social security and social
protection of workers, and also the integration of persons excluded from the
labour market and the combating of social exclusion. Pursuant to Article 153 para. 2. b) TFEU, the European Parliament and the Council may adopt Directives in the
field of employment and social policy. Alternatively, according to Article 292
TFEU, the Council can adopt recommendations
on the basis of a Commission proposal. Occupational Safety and Health legislation considers
trainees and apprentices as covered by the scope of the Directives based on
framework Directive of 1989, whose basis is Art 153 TFEU. However, it should be noted that the
provisions of Article 153 TFEU do not apply to pay (Article 153 para. 5 TFEU).
Hence, the problems relating to the low level of trainee compensation will have
to be dealt with at another level, notably by Member States and social
partners. Mobility in education
and training not only forms a central objective in the EU's educational policy
but is also an integral part in of the freedom of movement of persons under
Article 45 TFEU – a fundamental freedom protected by the Treaty. Given the
transnational dimension of traineeships, actions of individual Member States
alone will not achieve the objectives of the proposed initiative - to
comprehensively improve the quality of traineeships undertaken in the EU. The Charter of
Fundamental Rights of the European Union also contains a number of rights and
freedoms which may be relevant to measures that may be decided concerning
traineeships, in particular its Article 21 (Non-discrimination), Article 29
(Right of access to placement services), Article 31 (Fair and just working
conditions) and Article 32 (Prohibition of child labour and protection of young
people at work). Subsidiarity Generally, great diversity of situations
among Member States, or very different societal preferences are arguments in
favour of decentralised solutions, as they can be tailored to national or even
local needs and preferences. However, in the case of traineeships, the
difference of labour market institutions does not seem to play a major role, as
the nature of the complaints and concerns put forward is very similar
everywhere, and quality problems in traineeships are frequent even in the
Member States where the labour market situation of young people is more favourable.
The Traineeship study found that only in five Member States there was no
presence of questionable employer practices with regard to traineeships[14]. Another criterion commonly used to assess
whether an EU-wide solution is preferable is whether a standardised solution
offers operational advantages or cost savings. In this regard, it does appear
that an EU-wide solution presents several advantages. ·
First, the quality guidelines adopted or
proposed so far generally look very similar (see box 7 and Annex IV),
irrespective of the organisation drafting them. Differences reflect mainly
remuneration - which is sometimes covered and other times not, depending also
on the national regulation on this point – and the presence of individual
binding elements, such as limitations of successive traineeships which are
usually absent from voluntary charters. This suggests that there is no great
need of adaptation of quality standards to local conditions. ·
Second, an EU wide-solution would have clear
benefits in terms of intra-EU mobility of trainees. Young people would find it
easier to accept a traineeship in another country if standard or harmonised
rules gave them a clear knowledge of what they can expect in another country.
Greater trainee mobility would contribute to achieving a more integrated EU
labour market through better matching and sustainable job creation. ·
Third, experience shows that, owing to
coordination problems, the definition of internationally accepted quality
standards can be faster if supranational institutions adopt a coordinating and
supporting role. The EU is best placed for this, as there seems to be little or
no movement towards spontaneous development of international quality standards.
Through an initiative
in this sense, the EU could concretely support Member States in implementing
the EU 2020 employment guideline nr 8, in particular ‘enacting schemes to help
recent graduates find initial employment or further education and training
opportunities, including apprenticeships, and intervene rapidly when young
people become unemployed.’ Providing guidance to the Member States that is
operational and can be readily implemented at national level appears all the
more useful given the acuteness of the crisis and a track record of delays in
addressing the problems of traineeships. It is also fully in line with the
spirit of the European Semester. The Commission invited
already in 2007 "Member States to promote
internships with a strong link to training or study curriculum and to define
adequate frames for doing so"[15]. More broadly, the Commission
has frequently called for better work-to-school transitions, which implicitly
includes action on traineeships, as this has long been recognised as a priority
area. Also the resolution and conclusions of the 101st ILO Session
on the International Labour Conference have called for “regulating and
monitoring apprenticeship, internship and other work-experience schemes,
including through certification, to ensure they allow for a real learning
experience and not replace regular workers” (ILO 2012). Despite these calls
however action from Member States has been patchy and the regulatory framework
generally remains fragmented and unsatisfactory (see Table 1). The traditional European employment
strategy approach could be used to induce Member States to reform traineeship
regimes, but would lead to greater differentiation in the resulting framework
than instruments such as recommendations or legislation determining the content
of traineeship regimes. This would be suboptimal particularly in terms of the
need to address existing barriers to trainee mobility. Finally, a standardised
EU solution seems to be a logical pre-condition for extending EURES to
apprenticeships and traineeships, as requested by the European Council conclusions
of 28/29 June 2012[16].
This is due to the need to prevent the risk that
without ensuring standard quality requirements for traineeships advertised
within EURES, support through EURES is provided to low quality traineeships
that will not help smooth education to work transitions. 6. Policy
Objectives The general
objectives of an initiative in this domain are: (1) To facilitate
education-to-work transitions High quality
traineeships contribute to increasing the employability of young people.
Traineeships as a form of labour market entry for graduates should be stepping
stones in the progression to a regular employment, ensure a rapid increase in
workers’ productivity and help reduce precarious employment. The objective
should therefore be increasing the number of good quality traineeships and
reducing the extent of low-quality instances and abuse. (2) To promote mobility
in order to reduce mismatches in the European labour market To reduce structural
unemployment, the promotion of learners' and of workers' geographic mobility
within the EU should be stepped up, given the existence of marked skill and
demand/supply mismatches in the labour market. A development of transnational
traineeships is a key tool in this respect. Prospective trainees who consider
undertaking their training in another EU Member State should have a clear
reference to check quality criteria and not be discouraged by uncertainty about
administrative formalities; legal concerns, or contractual obligations. In order to meet these
general objectives, the following specific objective has been
identified: ·
To improve the quality of traineeships in the
EU. The operational
objectives would be (1) To encourage host
organisations to offer traineeships providing good quality learning content, decent
working conditions and which are a good stepping stone for entering the labour
market. (2) To increase the
transparency and quality of information on traineeship positions. 7. Policy
coherence – contribution to Europe 2020 An initiative on a
quality framework for traineeships is closely related to, and usefully
complements, several other European initiatives. Facilitating education to work
transitions, as well as promoting mobility, is high on the Europe 2020 agenda.
In 2010 the Europe 2020 flagship initiative 'Youth on the Move' announced that
the Commission would propose a quality framework for traineeships including the
transnational dimension, the role of the social partners and corporate social
responsibility aspects. In light of the further
deterioration of youth access to the labour market, the Commission launched the
’Youth Opportunities Initiative’ in December 2011. One of the main actions of
the initiative consists in the Commission’s support for Member States to use
the European Social Fund more efficiently, among others for supporting
traineeship places, as is already the case in some countries. In addition,
Commission support to high quality traineeships under the Erasmus and Leonardo
da Vinci programmes will be increased in the remaining programme period, and a
further budget increase will be proposed in the "Erasmus for All"
programme starting in 2014. The Youth Opportunities Initiative also confirms
earlier commitments to present a quality framework for traineeships in 2012. Skills are a core asset
for economic growth, as is good quality education and training systems that
facilitate young people's transition from school to work. In this context, 16
Member States have this year received a Country Specific Recommendation on
"enhancing access to lifelong learning, upgrading the skills and
competences of the workforce and increasing the labour market relevance of
education and training systems, VET". A very frequent recommendation is to
increase the availability of work-based learning, whether apprenticeships or
work placements in companies. Guiding criteria for quality traineeships appear
particularly useful for countries where the education and training authorities
have little experience or tradition of working in partnership with businesses. Action on improving
traineeship quality is also related to the debate around the recognition of
qualifications, and in particular the recognition in the home Member State of a traineeship accomplished abroad. This is of particular importance for the
regulated professions but might concern other professions as well. For
traineeships in the regulated professions, the legislative proposal amending
Directive 2005/36/EC foresees the introduction of a compulsory recognition
mechanism. Political attention to
traineeships is maintained in the 2012 Employment Package and is also on the
agenda of international organisations, notably the ILO. Developing a quality
framework for traineeships also contributes to the Commission's endeavour to
lift obstacles to the full enjoyment by citizens of their EU rights, and
notably their right to free movement. 8. Possible
avenues for EU action Situations in which markets fail at
ensuring minimum quality levels are not uncommon. They are usually addressed
either by a regulation imposing minimum standards (regulatory approach,
sometimes replaced by self-regulation), or by measures to increase the
transparency of the market. The analysis in section
4 provides a few pointers for actions that could improve the situation by
tackling the causes of the problems. Not all possible actions are suitable for
action at EU level, in light of legal or operational considerations. Table 6
illustrates some possibilities. Table 6. Problems, problem drivers and possible levels of action Problem || Problem driver || Different levels of EU action High share of low-quality traineeships || Lack of information for trainees on existing rights and quality standards || Set up information website(s) Lack of general quality standards hinders adoption of good practices by host organisations || Encourage voluntary adoption of engagements on quality (‘quality label’) Lack of transparency on the quality of the individual traineeship offered and lack of effective disincentives to free-riding || Introduce a set of quality guidelines Introduce binding legislation (e.g. on quality standards, banning unpaid or repeated traineeships etc. Possible policy response at EU level Given the link between low quality, market
failure and lack of transparency, one policy response should aim at increasing
transparency at all stages. This could mean in practice: ·
Clarifying the existing legal framework on
traineeships: the Traineeship study has shown that the legal framework on
traineeships is fragmented and complicated, leading to a lack of certainty on
the legal rights and obligations of trainees and host organisations. This could
be done through an effort at providing better quality information through
appropriate tools; ·
Simplifying the legal framework through
appropriate regulatory reforms. A good starting point could be the provision of
guidelines from best practice; ·
Introducing mechanisms for feedback on the
experience from individual traineeships, e.g. through appropriate websites; ·
Providing minimum requirements on the learning
content and/or on traineeship conditions, either through regulation or via soft
law. Actions could be taken,
depending on the types of traineeships, at different levels, involving
different actors and different tools. The EU could: ·
improve the transparency of traineeship
regulation through more accessible information; ·
encourage voluntary action by stakeholders (host
organisations, social partners etc.) to enhance the quality of traineeships,
for instance through the establishment of quality labels; ·
launch actions under the European employment
strategy to encourage Member States to improve the quality of traineeships; ·
introduce non-binding instruments
(recommendations or guidelines); or ·
introduce binding legislation. Possible scope of
application Regulatory theory suggests
that market failure in delivering quality can generally be tackled in two ways,
either by enhancing the quality and availability of information on the market,
or by imposing quality standards. Either approach could enhance the
effectiveness of traineeships in ensuring good transitions from education to
work. In the following, a number of measures based on the first or the second
approach are explored. Open-market
traineeships seem to represent an obvious candidate for initiatives given that
they represent the most problematic segment, but alternatives exist: the scope
of the measures could be either widened or restricted to apply to cross-border
traineeships only, or to traineeships with a duration above three months (on
the grounds that these are those for which the expectations by trainees of a
significant learning content are highest, as would be the costs for low
quality). Another issue is whether sectoral specificities would warrant
tailoring or limiting measures to certain industries (see Annex V for an
overview of the sectoral spread of traineeships). The social partners may
wish to consider one or more of the below measures, requiring different levels
of engagement of EU institutions. The contents of these areas may be adapted in
various ways. A first rough assessment of the impact / effectiveness of each
option is also provided (a more detailed assessment of impacts will be carried
out following the results of this consultation, in case the Commission decides
to present a proposal). 8.1. No
initiative at EU level (baseline scenario) Description: There is no sign that the quality concerns
discussed above would decrease in the future. As mentioned in Section 4 and in
Annex VI, economic incentives are such that an equilibrium around the current share
of low quality traineeships is likely to be sustained in the absence of policy
action. Furthermore, the
prolonged economic crisis may lead to a further deterioration in traineeship
quality. As outlined in Annex VI, one of the main reasons for offering a
high-quality traineeship consists of search for new talent in view of hirings.
Job creation however is being affected by the crisis. As fewer firms are
interested in hiring, it seems likely that the share of good quality
traineeships will decline in the immediate future. Furthermore, it may be
speculated that increasing cost-cutting pressure could also tend to boost the
number of low-quality traineeships, in some cases also at the expense of
regular employment. Certain Member States
might introduce regulation, possibly on the lines of the French Cherpion
law, and social partners might adopt quality charters at national or sectoral
level; these however would not be coordinated and therefore would retain the
fragmented nature of the current landscape, with its negative effects on
trainee mobility. The Commission will continue to pursue the objective of
improving mobility and labour market transitions of young people in particular
from education to employment, in the wider framework of the Europe 2020 strategy
and as a follow-up of the 2012 Employment Package, but without any specific
instrument/tool focusing on traineeships. The Traineeship study provides a
first overview of the traineeship arrangements in the Member States and lays a
basis for more transparency of arrangements. Finally, another
possibility is that given increasing public concern about trainee exploitation,
there might be a greater trend towards adoption of voluntary quality charters
by host organisations. This is however unlikely to change the situation
perceptibly, for two reasons. First, adoption rates for existing voluntary
charters are very low, amounting to a few dozen only for initiatives launched
in Italy and in the UK. Second, and more cogently, those firms that are likely
to adopt the charters are likely to be those that are already now offering a
high quality traineeship; the providers of low-quality traineeships are
unlikely to be swayed significantly. Looking at developments
on the ground, there seems to be limited movement towards spontaneous
development of global or EU-wide quality standards. While it is possible that
there are further national or international initiatives in order to enhance the
quality of traineeships, the overall share of low quality traineeships could be
expected to remain roughly constant or even increase: the crisis may lead
businesses to scale back new hirings, which are one of the main reasons for
offering high-quality traineeships, and labour market entrants may have revised
downwards their expectations. 8.2. Creation
of an information website Description: Setting up a website with a traineeship
panorama (based on the Traineeship study - e.g. within the EURES portal, or by
the social partners), containing regularly updated information on traineeship
conditions and the legal framework in each Member State, would constitute a
non-regulatory approach to increase the availability of general information
about traineeships. As a bolder option, the website could also allow trainees
to give feedback on their individual traineeship experience with a host
organisation, transforming the nature of the information from purely general to
specific. However the cost and legal implications of this possible facility
should be carefully considered. Pros: A properly designed, user-friendly website
would allow a better spread of – and in particular easier access to – general
information on national legislation of traineeships, on the availability of
different types of traineeships in Member States. This would reduce search costs
for trainees, could improve matching and could also have a positive effect on
increasing the availability of candidates for transnational traineeships. Over
time, greater availability of candidates could stimulate also an increase in
interest by businesses, particularly those facing, for whatever reason,
difficulty in attracting domestic applicants for certain vacancies. An information website could be implemented at a limited cost (i.e. establishment
and management/regular update of the information present on the website). While
there is no compliance cost for Member States or host organisations, there
would be some budgetary implications for the organisation running the website
(possibly the European Commission). Procedures for making sure that the information
is always up-to-date would have to be established. In its basic
formulation, this tool addresses part of the lack of information problem, i.e.
the lack of general information on standards, but does not provide information
on the quality of specific traineeship positions on offer. Hence, the impact of
this option on traineeship quality is useful but modest, being limited to
greater awareness of rights and average traineeship conditions. It could have a
stronger effect on stimulating transnational traineeships. Implementing the option
of allowing trainees to assess or rate their traineeship experience would
instead create a fairly strong incentive for host organisations to improve the
quality of their traineeship offer, as their reputation would benefit from
being shown to offer high quality traineeship conditions. Provision of low
quality traineeships would be strongly discouraged, first by making the
reputational loss for host organisations concrete and secondly because it would
be harder to find applicants. Cons: On the other hand, this option appears
difficult to implement from a legal viewpoint, particularly at EU level.
Appropriate safeguards (such as moderation, rules on leaving feedback, checks
to prevent individual users to have a disproportionate effect on ratings, etc.)
should be found to prevent the risk of penalising host organisations from
inappropriate feedback. This option may also discourage host organisations that
are uncertain about the quality of (some of) their traineeships to supply traineeships
at all, possibly even high quality ones, out of fear of receiving negative
ratings. Table 7. Foreseeable impact of the creation of an information
website Voluntary (V) / Soft law (SL) / Regulatory solution (R) || Potential Impact on quality of traineeship || Impact on demand for traineeships positions (D – domestic – CB – cross-border) || Impact on compliance costs for businesses = impact on supply of traineeship positions || Impact on compliance costs for SMEs || Flexible solution na || 0 || D: 0 CB: + || 0 || 0 || Yes Key: 0 : zero or negligible impact (+)
/ (-) : slight positive (negative) but uncertain impact + /
-: possible positive/ negative impact ++ /
-- : likely positive/ negative impact +++/---
: very likely positive/ negative impact 8.3. Quality
label for traineeships Description: A set of quality principles for traineeships
could be elaborated in cooperation with social partners, specifying minimum
quality guidelines for the format and learning content of the traineeship (see box 7). Companies, educational institutions, employment services and/or other relevant actors
could voluntarily commit to respect the guidelines for trainees (e.g. in the
form of a voluntary code of conduct), and, in exchange for that, publicise
themselves as ‘fair to trainees’ or similar. In order to provide a reputational
benefit for participating businesses/host organisations, the label should be
advertised and managed directly by an adequate private or public body or
stakeholder group giving some guarantee of independence and impartiality. The
quality label for traineeships could also include a commitment by the host
organisation on providing remuneration and social security treatment.
Furthermore, it is possible to launch a quality label specifically in sectors
where there are more concerns related to open market traineeships (e.g.
tourism, journalism, politics/public affairs, creative industries, management
consulting, etc.). Compliance would not be
monitored systematically, but ways would need to be found, either at EU or at
individual Member State level, to handle complaints by trainees about companies
not following the code/guidelines. To achieve minimal compliance costs, the
quality label could be attributed to all organisations that would commit to it
without advance inspection or screening. A certain number of duly justified
complaints could lead to the withdrawal of the label. Such light organisation
would allow the label to be managed by the companies concerned, or by a small
external office. The ‘quality label’ approach has been followed most
intensively in the UK, though with low take-up rates so far (see Annex IV for
additional details about the UK schemes). Pros: Overall, this non-regulatory approach has the
merit of encouraging and guiding host organisations by providing a reference
for quality standards while its voluntary nature ensures that it is bearable
for host organisations. It goes some way into providing a positive incentive
for adoption, given that one of the motives for organisations to offer
traineeships is improving their reputation, which could be enhanced by a
quality label. This option might also stimulate cross-border traineeships. Its
main weakness is that it would presumably have limited or no disincentive
effect for low-quality traineeships, as low quality providers would simply not
apply for the label. The voluntary nature of
the commitment seems to make sure that the compliance burden for businesses
would be acceptable. Compliance costs would depend on how the quality label
would be managed and handling of complaints organised. The administrative costs
related to signing traineeships agreements, defining precisely roles within the
organisation etc. would rapidly decline over time as the main effort is made
once, at the initial set-up. Including in the voluntary charter commitments on
pay would address a typical complaint, but would also affect the compliance
cost and possibly take-up. Cons: However, there is a risk that few
organisations bother to apply for the label, particularly as at present demand
for traineeships outstrips supply. Furthermore, many of those that apply
probably will be those that offer high quality traineeships already. Hence the
option appears useful but of limited impact. The impact on replacement risk
would be close to zero as few low-quality hosts are likely to apply. Table 8. Foreseeable
impact of a quality label for traineeships Measure / Action || Voluntary (V) / Soft law (SL) / Regulatory solution (R) || Potential Impact on quality of traineeship || Impact on demand for traineeships positions (D – domestic – CB – cross-border) || Impact on compliance costs for businesses = impact on supply of traineeship positions || Impact on compliance costs for SMEs || Flexible solution Quality label || V/SL || 0/+ || D: + CB: ++ || 0 || 0 || Fairly Quality label + remuneration || V/SL || 0/+ || D: + CB: ++/+++ || 0/(-) || 0(-) || Fairly Key:
0
: zero or negligible impact (+)
/ (-) : slight positive (negative) but highly uncertain impact +
/ -: possible positive/ negative impact ++
/ -- : likely positive/ negative impact +++/---
: very likely positive/ negative impact 8.4. European
Quality Framework for Traineeships Description: This measure would consist in a social partner
agreement or a Commission proposal (for a Directive or for a Recommendation) on
quality elements, to be transposed by Member States in national practice and/or
the national legal system. The quality framework could include inter alia the
elements listed in Box 7. The legal basis would be either Article 153 2(b) or
Article 292 TFEU. Box 7. Key quality elements identified in the Traineeship study A good quality traineeship should enable the trainee to acquire practical skills geared to the labour market needs and complementary to the trainee’s theoretical studies in order to enhance the trainee's employability. The Study has identified a number of principles that characterise a good quality traineeship. Starting point for the formulation of the ‘quality label’ is the presence of a mandatory traineeship agreement. A good quality traineeship should be based on an agreement between the trainee and the host organisation (i.e. company, public agency etc.). The traineeship agreement should cover the following elements (identified by the study as most important): • Objectives, content and monitoring: Traineeships should enable the trainee to acquire practical skills complementary to his or her theoretical studies. The guidelines require that educational content is ensured by assigning a personal supervisor or mentor at the host organisation to each trainee. The supervisor guides the trainee through the assigned tasks, monitors progress, and explains general work processes and techniques. The supervisor also has to provide an evaluation of the trainee’s performance in the form of a short final evaluation (1 to 2 pages), which may take the form of a letter of reference. • Duration: Open-market traineeships should typically not be longer than 6 months. Mandatory post-graduation professional training of doctors, lawyers, teachers and the like, which exist in most Member States, are exempted as these traineeships tend to be highly regulated. A similar category in this respect are the in-company so-called "traineeship programmes" for recruitment at higher levels of management in order to prepare the trainees for a high level career in the enterprise. • Remuneration/cost compensation: If there is a mutual benefit for both the host organisation and the trainee in terms of knowledge transfer and learning, unpaid traineeships may be appropriate. Hence the quality guideline should only stipulate that the written stage agreement clearly specifies what, if any, compensation and remuneration is offered (noting the role that remuneration / cost compensation may have for access to quality traineeships, and hence labour market chances of (young) people from disadvantaged backgrounds). • Social security provisions: The social insurance provisions need to be clarified between the trainee and the employer. This includes health insurance and insurance against accidents at the workplace. In most Member States, students are provided with social insurance by the state or their educational institution. Therefore, they are insured against health risks and accidents while undertaking traineeships during their studies. If the trainee is not a student anymore but the traineeship is covered by an employment contract, employer and employee need to fulfill insurance obligations as stipulated by labour law in the respective country. Alternatively, the contractual arrangement could foresee insurance schemes to be paid by the host organisation or the trainee. Pros: The strength of this approach is that the
quality framework would be the same framework in all (adopting) Member States.
This would therefore address the negative impact of the diversity of
regulations on the development of international mobility. A framework in form
of a Directive would be legally enforceable and would ensure that the rights of
trainees are effectively protected. The content of the
quality framework can be drawn upon using the Traineeship study. The elements
identified in the study could be complemented with a limitation of successive
traineeships, and/or with a requirement to register traineeships. Similar
measures have been adopted in certain Member States (e.g. France). Limiting the repetition of traineeships by the same person in the same
organisation, or, more boldly, prescribing that host organisations need, over
the medium term, to hire a certain (limited) percentage of the trainees it
engages[17]
would address the problem of young people having to do several traineeships
before finding regular employment[18].
Instruments similar to a quality framework already exist within the EU – for
example in Italy and the UK. Given that a code would be voluntary, the
compliance burden of such a measure seems acceptable. Although these principles
seem to have general validity, they should be adapted to the type of
occupation/sector and reflect the size of the host organization. A Commission proposal
for a quality framework for traineeships is an option with a wide coverage and
high direct visibility. It would engage the national level in subscribing to
the quality principles – either legally binding in form of a Directive or in
form of non-binding recommendations. The actors on the ground will understand
that the quality framework is the reference benchmark for assessing the quality
of each individual traineeship. A common traineeship quality framework also
provides guidance to Member States, Social Partners and training institutions
for setting up or revising their provisions on traineeships, and to promote
transnational mobility in traineeships. In addition, a common quality framework
for traineeships could include a partnership approach among employers, public
employment services, other public authorities and educational and training
institutions to better exploit synergies, reduce costs, share best practices
etc. Overall, a reasonable
improvement on the quality and transparency of traineeships could be expected
in the medium term from a quality framework endorsed at European and national
level. A limitation of successive traineeships, if properly implemented, could
be effective in limiting replacement risk. Furthermore, the compulsory
registration of traineeships would allow having better statistics about
traineeships. Cons: Regarding the impact on the availability of
traineeship places, this option would include a certain risk, as inherent in
all regulatory solution, that some employers will refrain in the future from
providing traineeship places, most likely because they realise that the
traineeship places they offered so far were not of good quality. They might
consider that certain elements of the quality framework (in particular ensuring
mentorship) would result in a too high cost for the traineeships. This potential
negative impact – given the manageable implementation costs – however appears
limited, and in any case may be offset by an increase of good quality
traineeships (as clear conditions on what is expected in terms of traineeship
quality may encourage employers to improve their offer). Most of the costs of
this option would have to be borne by host organisations. Compliance costs would
mainly be related to ensuring a proper learning content. Host organisations
that already provide learning content would merely need to give it the
appropriate level of formality by listing learning objectives and some other
key characteristics of the traineeship on paper. Setting up a traineeship
agreement should not require more than a few hours and the work done could largely
be recycled for future trainees. Furthermore, most organisations offering high
quality traineeships already now include such elements in their business
practice. While compliance costs may affect SMEs to a greater degree, the
UEAPME response to the Commission's public consultation – in line with the
priorities identified in the 2012-2014 work programme of the European social
partners - stated that a traineeship agreement, agreed learning objectives, the
recognition of the traineeship and a limited length of the internship are
useful elements, and can be agreed also by small businesses. Hence the risk of
reduction of traineeships offered can be considerably limited given the limited
additional workload for compliant businesses. An important question,
however, remains the effectiveness of the impact on bad quality traineeships as
regulatory solutions may work least in Member States with weaker enforcement
mechanisms, which may be exactly those where there is most need. The quality
framework for traineeships is a proportionate EU level action that can
contribute to achieving the intended objective, especially if not in the form
of binding legislation. Table 9. Foreseeable
impact of a European Quality Framework for traineeships Measure / Action || Voluntary (V) / Soft law (SL) / Regulatory solution (R) || Potential Impact on quality of traineeship || Impact on demand for traineeships positions (D – domestic – CB – cross-border) || Impact on compliance costs for businesses = impact on supply of traineeship positions || Impact on compliance costs for SMEs || Flexible solution 4 Quality framework for traineeships (QFT), || (R) || ++/+++ || D: ++ CB: ++/+++ || 0/(-) || -/-- || Fairly 4b QFT for long, cross-border traineeships || (R) || +/++ || D: + CB: ++/+++ || 0/(-) || -/-- || Fairly Key: 0 : zero or negligible impact (+) / (-) : slight positive
(negative) but uncertain impact + / -: possible positive/
negative impact ++ / -- : likely positive/
negative impact +++/--- : very likely positive/
negative impact 8.5. Combination
of options The above presented
measures and elements of EU action could be combined together. 8.6. Final
overview The following table
summarises the avenues for action presented above in terms of possible impacts
and compliance costs. Table 10. Overview of impact Measure / Action || Voluntary (V)/Soft law (SL)/Regulatory solution ® || Potential Impact on quality of traineeship || Impact on demand for traineeships positions (D – domestic – CB – cross-border) || Impact on compliance costs for businesses = impact on supply of traineeship positions || Impact on compliance costs for SMEs || Flexible solution Information website for trainees || na || 0 || D: 0 CB: + || 0 || 0 || Yes Quality label || V/SL || 0/+ || D: + CB: ++ || 0 || 0 || Fairly Quality label + remuneration || V/SL || 0/+ || D: + CB: ++/+++ || 0/(-) || 0(-) || Fairly Quality framework for traineeships (QFT), || (R) || ++/+++ || D: ++ CB: ++/+++ || 0/(-) || -/-- || Fairly QFT for long, crossborder traineeships || (R) || +/++ || D: ++ CB: ++/+++ || 0/(-) || -/-- || Fairly Key:
0
: zero or negligible impact (+)
/ (-) :slight positive (negative) but uncertain impact +
/ -: possible positive/ negative impact ++
/ -- : likely positive/ negative impact +++/---
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presentation at the 2005 EPUN et Conference, June 30-July 2, 2005. Colchester, England, 2005. 10. ANNEXES 10.1. Annex
I – Apprenticeships vs. Traineeships 10.2. Annex
II – Traineeship study, Executive summary Introduction The main objective of this study
was to provide an overview of traineeship arrangements in all 27 Member States
and to collect the most up-to-date information about different forms of
traineeships across the EU. Traineeships are seen as an effective mechanism
which allows young people to familiarise themselves with the world of work,
thus facilitating their transition from education (or a period of inactivity or
unemployment) to employment. However, there are also growing
concerns across the EU about the quality and fairness of traineeships as well
as their effectiveness as a school-to-work transition mechanism. The availability and quality of information on
traineeships is rather uneven across the EU. This study is a response to the need for a comprehensive
EU-wide robust traineeshiprelated evidence base. It was conducted by a consortium
involving the Institute of Employment Studies (IES, UK) as the lead
co-ordinator, the Istituto per la Ricerca Sociale (IRS, Italy) and the Bundesinstitut für Berufsbildung (BIBB, Germany) as key partners as well as a network
of regional and national experts. The study’s methodological approach combined a range of qualitative
methodologies which included stakeholder interviews at both EU and national
levels; a quasi-systematic literature review; a comparative mapping exercise
based on information collected in each Member State; and case studies. For the
purposes of this study the following five types of traineeships were examined: ·
Traineeships which form optional or
compulsory part of academic and/or vocational
curricula (i.e. traineeships during education); ·
Traineeships in the open market which, after completion of studies, provide graduates with
work-related experience before they find stable employment; ·
Traineeships as part of active labour market
policies (ALMPs) for unemployed young people with
the explicit aim to facilitate their labour market transition; ·
Traineeships which form part of mandatory
professional training, e.g. law, medicine,
teaching, architecture, accounting, etc.; and ·
Transnational traineeships. Key Findings of the Study This section presents a summary of the study’s key
findings and recommendations. Increased Policy Focus on Traineeships as Mechanisms
which facilitate Young People’s Labour Market
Entry The dramatic rise in youth unemployment and employment
precariousness combined with considerable skill mismatches have prompted
Governments across the EU to increasingly focus on traineeships as
effective school-to-work transition mechanisms. As a result, traineeships are
increasingly integrated into ALMPs and/or form an integral part of educational
courses. In view of the proliferation of traineeships undertaken by young
people in the open market, Member States have also sought to raise the quantity
and quality of such traineeships through either well-structured programmes and/or
regulations or voluntary quality charters aimed at providing some protection to
trainees. Funding of Traineeships Across Member States the most
common methods of financing the various types of traineeships include European
and national/regional funds; institutional assistance, e.g. university grants;
personal financing; and company resources. Where public funding is available,
this often involves considerable support from European funds, notably the European
Social Fund (ESF). Personal financing is particularly common in open market traineeships
where, in many cases, trainees receive no or insufficient compensation. As a result,
they have to rely on other funding sources such own savings and family support. Lack of a Common Definition of Traineeships There is a great discrepancy across all Europe in the extent to which traineeships and/or trainees are clearly defined. In relation
to the definition of traineeships, in most Member States there is either
a legal definition or, at least, a common national understanding of the concept
of a traineeship. In general, in almost all countries where a common definition
of traineeship exists, there is a strong link between education and work
experience. Across Member States the common defining characteristics of
legal frameworks relating to traineeships are: (i) the general educational
purpose; (ii) the practical element of learning; and (iii) the temporary
character of the traineeship. Plurality of Regulatory Frameworks for Traineeships Across Europe there is a plurality and variety of legislation
and regulations governing traineeships. This legislative/regulatory diversity
exists not only between Member States, but also between the different types of
traineeships themselves. This, in turn, reflects the fact that the concept of
traineeship itself is very diverse. Traineeships related to education/training
and ALMPs tend to be the most regulated, while open market traineeships are
subject to much less regulation. Traineeship-related legislation can be found in laws and
regulations associated with either education and training policies or
employment policies, including ALMPs. It usually seeks to define and regulate
traineeships, the trainee status and associated terms and conditions. Some
Member States seek to regulate directly traineeships-related issues (e.g. by
Laws which explicitly apply to traineeships). Traineeships which form part of
academic study curricula are typically regulated, organised and overseen
independently and autonomously by the educational institution itself. It should be noted that legislative and regulatory
frameworks do not necessarily guarantee the quality of traineeships.
Rather, it is the implementation of regulations and the robust monitoring of
the entire process which play a key role in ensuring quality traineeships.
There is particular concern about the inadequacy of regulations for
traineeships in the open market. Great Diversity of Traineeships Between and within Member States the study identified a
wide range of traineeships: ·
Traineeships linked to educational
programmes: Across the EU it has become increasingly
common for traineeships to be integrated into curriculum requirements for both
higher vocational and academic education qualifications. Although traineeships
have been more common in upper secondary and higher vocational education and
training, they are now becoming an integral part of academic curricula in most
Member States. The proportion of students undertaking traineeships or work
placements as part of higher education studies varies widely across Member States,
from 87 per cent in the Netherlands to 22 per cent in Italy.[19] ·
Traineeships in the open market: In recent years there has been an expansion of traineeships which
young people undertake after graduation, not least because employers
increasingly put a premium on them having acquired work experience through such
placements. These traineeships have attracted most criticism since they tend to
be unregulated and associated with reports of questionable employer practices
including low quality, poor terms and conditions, including low or no pay, etc. ·
Traineeships linked to ALMPs: These are aimed at unemployed young people, typically with no or a
low level of skills. However, in recent years, especially since the Great
Recession, traineeship programmes have expanded to include work placements offered
to graduates with the aim of facilitating their labour market transition. ·
Traineeships as part of mandatory
professional training: Across Member States there
are certain professions where there is a legal requirement to undertake a compulsory
traineeship as part of mandatory professional training, e.g. medicine, law, education/teaching,
architecture, etc. These traineeships are typically a pre-requisite for licence
to practice and tend to be both well-defined and tightly regulated. However,
issues of trainee exploitation can emerge due to incorrect implementation of
regulations. ·
Transnational traineeships: Across all Member States there is evidence of growing popularity of
transnational work-related mobility. EU mobility programmes, notably the Leonardo
da Vinci and Erasmus programmes, have increased the number of transnational work
placements across most Member States. A growing number of countries are
actively promoting traineeships abroad, either through EU or other
international youth mobility programmes such as AIESEC and IAESTE as well as
through national initiatives. Sectors where Traineeships are more common The type, range and profile of sectors where
traineeships are more prevalent differ, to some extent, according to the
specific type of traineeships. In certain sectors traineeships are a compulsory
part of mandatory professional training (see previous section). In addition,
there are a number of sectors where traineeships are increasingly common,
including the creative industries, media/journalism, the public sector, third
sector/NGOs, hospitality, business administration and financial services. Some
of these sectors such as the creative industries, media/journalism and the
third sector/NGOs have also been associated with questionable employer
practices. The latter include low or poor learning content; poor working
conditions; inadequate compensation; using trainees as substitutes for regular staff;
repeatedly renewing traineeship contracts without offering a permanent position
etc. Great Variety of Trainee’s Terms and Conditions The trainee’s rights, terms and conditions vary
considerably both between different types of traineeship and Member States. For
example, traineeships linked to study curricula and mandatory professional
training have more clearly defined terms and conditions as opposed to those in
the open market. The issue of trainees’ terms and conditions has increasingly become
the focus of lively political debate across the EU. As a result, a number of
Member States with the aim of improving the trainee’s terms and
conditions have introduced or are in the process of developing new
legislative/regulatory measures and/or quality frameworks. Growing Emphasis on Quality Assurance In a number of Member States and for certain types of traineeships
the study identified widespread concerns about the quality of traineeships. A
number of countries have actively sought to improve this quality by strengthening
quality assurance mechanisms. These include traineeship-related
legislation (e.g. the 2011 Cherpion Law in France) as well as specific quality
frameworks either regulated by public institutions (e.g. educational
establishments, public employment services etc.) or developed by the social
partners, or promoted on a voluntary basis by employer associations,
professional bodies and even governments (e.g. the 2011 Common Best Practice
Code for High Quality Internships in the UK). Quality assurance
standards may be compulsory or voluntary. Effectiveness of Traineeships Across the EU there is a growing awareness of the benefits
of traineeships in terms of facilitating the school-to-work transition.
However, there is an uneven and rather patchy body of evaluation
literature on the effectiveness of traineeships. The available literature
appears to indicate the most effective traineeships are those undertaken during
education and, in some instances, those linked to well-structured ALMPs.
The main success factors of these traineeships seem to be i) their
strong links with the labour market; ii) a well-structured approach;
iii) active engagement of stakeholders, including employers; and iv)
robust quality assurance mechanisms. Recommendations This study has highlighted a number of
traineeship-related areas where further action is required either at EU and/or
national levels. ·
There is a need for a clear definition of
traineeships at EU level. Given the great variety of traineeships, this
definition may outline the key aims and features of these schemes, while
leaving some space for the specificities of particular types. ·
There should be more support to include
traineeships as a part of study curricula, where possible traineeships
should take place during studies and not after graduation. ·
A concerted effort should be made at both EU and
national levels to increase the supply of traineeships, especially in
SMEs. ·
There is a need for a Quality Framework for
Traineeships offering clear and practical guidelines about high quality
traineeships. ·
There is a need for some financial support to
trainees, especially those from less privileged backgrounds. ·
Steps should be taken to encourage open and
transparent recruitment processes for traineeships. ·
There is a need for more robust data on and
evaluation of all types of traineeships at both national and EU levels. This
includes both quantitative and qualitative data which can be used for
assessing the quantity, quality, impact and effectiveness of traineeships. 10.3. Annex
III – Regulatory Framework Source: Traineeship study, European Commission (2012a) 10.4. Annex
IV – A voluntary approach to Quality Labels for Traineeships In response to concerns about traineeship qualities, in the
UK a number of initiatives have been taken by professional associations,
stressing voluntary adherence to codes of conduct by host organisations,
particularly regarding open market traineeships. This type of traineeship has
been subject in the UK to no or the least regulation and little by way of
formal quality assurance processes. There has been an number of voluntary
quality charters and frameworks aimed at providing good practice guidelines to
organisations which take on trainees. Two have had a particularly high profile.
·
In 2009 the UK’s Chartered Institute for
Personnel and Development (CIPD) produced an Internship Charter aimed at
promoting quality traineeships. ·
More recently, on 18 July 2011, a consortium of
60 professional associations launched, with the support of the UK Government, a
voluntary Code of Best Practice for Quality Internships as a way of addressing
concerns about such schemes, including those associated with mandatory
professional training. Although the Code of Best Practice for Quality
Internships touches on trainee remuneration, it does not include it as part of
its best practice principles. Instead, it exhorts employers to comply with the
law whereby trainees, unless classified as volunteers, are entitled to NMW, and
mentions that higher pay might attract higher calibre candidates to
traineeships. Both the Internship Charter and the more recent Code are
entirely voluntary and have no legal force. The Code recommendations cover similar quality elements as
those identified by the Traineeship study, such as a written traineeship
agreement and a specification of the nature and content of the tasks. ■ Preparation – Firms need to think beforehand about
the effective use of the trainee ■ Recruitment – Recruitment practices for trainees
should be the same as those for regular employees. Traineeship adverts should
clearly state the trainee’s roles and responsibilities as well as pay, duration
and working hours ■ Induction – All trainees should have a formal
induction to the company ■ Treatment – Trainees should be treated the same as
regular employees, integrated into the organisation and given meaningful work ■ Supervision and mentoring – There should be a
supervisor with ring-fenced time in their schedule to work with the trainee.
The supervisor should establish performance and learning objectives, conduct
performance reviews and provide feedback ■ Certification, reference and feedback – Trainees
should receive a certificate/reference letter and have opportunity to feedback
to the organisation on their experience. Source: http://www.bis.gov.uk/assets/BISCore/higher-education/docs/C/11-1068-common-best-practice-code-for-quality-internships.pdf 10.5. Annex
V – Sectoral distribution of traineeships by country Source: Traineeship study, European
Commission (2012a) 10.6. Annex
VI - Market failure in traineeships Structural
differences in benefits from employment and traineeship contracts…. In a regular
employment contract, the benefit each party obtains from the arrangement is, to
a large extent, clear and measurable. In exchange for his or her work effort,
the worker receives a known amount of pay. The pay is fixed in advance and the
work effort can be monitored by the employer. To be sure,
there are other elements of mutual benefit that are less concrete and
measurable, but may yet form part of either side’s expectations from the
contract: for example, the worker may expect a pay raise in the future, or the
firm may expect a well-treated worker to spread some good words about the
company. But in any case these are accessory elements, which would not
fundamentally alter the balance of the relationship if they did not
materialize. The
situation is radically different in a traineeship contract. Here, the main
benefits accruing to the two parties are not so much pay and effort but a set
of other benefits (see Chart 1). The main
benefits of the traineeship for the host organisation are: 1. The
possibility to assess precisely the value and productivity of the trainee in
case it should want to hire a worker ("screening" benefit); this is
often the main reason for offering a traineeship position. The value of this
information depends on many factors, such as the difficulty in selecting a good
employee, the costs of training and dismissing a bad one, the share of good
candidates in the job pool etc. 2. The
opportunity to maintain a reputation as a good employer or, more broadly, a
good organisation, even if it may have no immediate hiring need (‘Corporate
Social Responsibility’). This is an element of the corporate strategy. 3. The
value of the work carried out by the trainee. This can be estimated quite
precisely by the HO on the basis of the trainee’s qualification and experience. The main
benefits for the trainee are the following: 1. A
greater chance of being offered a job at the end of the traineeship compared to
an unknown candidate, and the possibility of assessing precisely working
conditions in the event; 2. The
value of the practical on-the-job training received, which comes at a cost to
the host organisation, in the form of time dedicated to form trainees by
qualified employees or trainers; 3. The strengthening of one’s job
prospects with other firms, consequent to having completed a traineeship and
having thus gained a higher productivity. 4. Compensation, if any The traineeship agreement will be concluded
if both sides consider that the respective costs are in balance with the
benefits. Figure 1. Schematic representation of
bilateral benefits in employment and traineeship arrangements …create room for market failure In a normal traineeship, work and pay,
taken in isolation, play a less important role than in a regular employment
contract. Trainees’ lack of experience translates into low productivity and
correspondingly low compensation, if any is paid at all. Hence the rationale
and advantage of the contract derives much more from the anticipated value of
the other, less tangible, benefits. This situation creates room for market
failure. In a traineeship, particularly the value of the benefits accruing to
the trainee is uncertain and difficult to assess in advance (‘information
asymmetry’). The trainee has little possibility of realistically assessing his
or her chance of being hired at the end of the traineeship, or even whether the
host organisation intends to hire at all. Equally difficult is assessing in
advance the value of the job training to be received and the consequent
strengthening of prospects with other firms. This makes it possible for the
host organisation to underdeliver on the quality of training, i.e. on the job
content and on the general conditions of work. Trainees cannot screen the quality of the
traineeship on the basis of whether the traineeship is paid or unpaid. Although
low quality is more common in unpaid traineeships, high-quality unpaid
traineeships exist, particularly in case of technical professions with high
training costs or where a large imbalance between candidates and available
positions encourages host organisations to minimize compensation. Once the traineeship has begun, the scope
for trainees to lobby effectively for improving the quality of the traineeship,
if it is deficient, is very limited. Trainees may initially put up with the
situation in the hope that it could improve later. They may be reluctant to
complain out of fear of compromising their employment prospects; and they have
difficulty referring to quality standards because these often do not exist. They
also face a cost in changing companies and the duration of the traineeship is
not very long anyway. As a result, trainees are often ‘trapped’
into completing a bad quality traineeship. This will at any rate give them some
kind of positive outcome (i.e. a mention on their CV) compared to no benefit at
all if they abandon the traineeship. Not only trainees, but also other companies
will have difficulty screening ex post the quality of a previous traineeship
followed by a job candidate. This also contributes to market failure. As a result, the traineeship market is
characterized by an equilibrium in which a certain share of traineeships is low
quality. This is in line with survey results, outlined in Box 1, showing
consistently that a share of traineeships of 20-40% is of insufficient quality.
Conditions for market failure to occur Intentional under-delivery of training or
imposition of harsher working conditions can occur if the host organisation has
no intention to hire and does not care too much about its reputation, as
otherwise its behaviour would undermine the attainment of those objectives.
Such a ‘free-riding’ host organisation will have an incentive to limit its
training costs to the absolute minimum, in order to maximize its profits. For
this reason the risk of bad quality is greatest on open market traineeships, as
there is no external control on training quality. The market will always offer some
high-quality traineeships, because even in a deep recession, some organisations
always have hiring needs. However, this share is likely to be lowest now,
because the crisis has affected hiring plans negatively; this reduces the
incentives for offering a high quality traineeship. It may also reduce the
attachment of Ho to adhere strictly to CSR principles. Consequences of market failure Cost minimization (or profit maximization)
by free riders explain both types of problems identified by the studies, i.e.
limited learning content and bad working conditions, as free riders will both
want to minimize the training costs and will also tend to ‘push’ trainees to
supply the maximum possible output. In practical terms, low-quality
traineeships will be characterized by very limited. 10.7. ANNEX VII – Comparison
of the quality elements considered by the Commission with the Code of Best
Practice (UK), the Loi Cherpion (FR) and the European Quality Charter on
Internships and Apprenticeships presented by European NGOs Commission considerations || Code of Best Practice for Quality Internships || Loi Cherpion || European Quality Charter on Internships (for open market traineeships) Traineeship agreement || || Compulsory traineeship contract for all types of traineeships || Traineeship contract outlining the length, remuneration, learning content and tasks. Objectives need to be clarified, learning content and monitoring (mentorship), as well as evaluation to be ensured. A final certificate/reference letter is to be given to the trainee. || Induction training and meaningful work to be provided; supervisor with ring-fenced time should establish performance and learning objectives, conduct performance reviews and provide feedback. Trainees should receive a certificate/reference letter and have opportunity to feedback to the organisation on their experience. || Learning content of the traineeship to be of high quality and closely linked to the trainee’s studies and/or training and professional development activities; the traineeship should be recognized as part of the probation period if the trainee is recruited within 3 months upon its completion; trainees should not be assigned tasks performed by regular staff. || Internships to be carried out under guidance of a supervisor and have access to robust evaluative and complaints channels to monitor progress and quality of the internship; mid-term and final evaluation needed, as well as the possibility to be hired. Duration – no longer than 6 months (with exceptions). || || Max 6 month per academic year. || Length of internship should be restricted to a reasonable and fixed number of months. Limitation of successive traineeships || || companies should wait for a period corresponding to 1/3 of the length of the previous traineeship before taking on a new trainee in the same role. || Use of internships should be limited to pupils, students and very recent graduates; limited number of interns per internship provider; Remuneration/compensation to be clarified in contract (recommended if there is a mutual benefit) || Remuneration is recommended and has to be clarified already in the advertisement. || Trainees undertaking a traineeship lasting for more than two months should receive minimum compensation in the form of a bonus. || Decent remuneration not below the EU poverty line of 60% median income or national minimum wage (whichever favourable). Social security provisions to be clarified in contract. || Social protection coverage is recommended, and has to be clarified already in the advertisement. || || Inclusion of the intern in the social security system, especially those of health, unemployment, pension systems. [1] SWD(2012)99, 18.04.2012. For more details see section
3 [2] EP 2009/2221(INI), 06.07.2010 [3] 8664/11 JEUN 19 SOC 313 [4] See e.g. www.ueapme.com/IMG/pdf/EUSD_work_prog_2012-2014.pdf. [5] Based on the classification
suggested in European Commission (2012a), Study on a
comprehensive overview on traineeship arrangements in Member States (henceforth “the Traineeship study”,
available at http://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=6717&visible=1.
Annex II reproduces the executive summary of the study). [6] See section 4.4. for more detail on transnational
traineeships. [7] See Annex II and Traineeship study, pp. 45-50 for details. [8] A
2011 report on recruitment practices of UK firms found that there are on
average 70 applicants for each traineeship position, and that three out of five
leading companies would not interview candidates who have not done work
experience with them, irrespective of the university they have attended or the
results they have achieved. The report also states fears of recruitment experts that less well-off students
will lose out and that “with few firms offering an internship wage, all but the
very wealthy will be eligible for top jobs.” See High
Fliers Research (2011). [9] However, the share drops to
85% amongst all respondents. See Heath, Potter (2011). [10] The recent UK Common Best Practice Code for High-Quality Internships
states that greater access to high-quality traineeships can help an
organisation meet its CSR objectives by promoting social mobility and diversity
in the professions. In a similar vein, in both the Netherlands and Slovenia, the AIESEC traineeship programme also explicitly links the offer of quality
traineeships with the promotion of a positive and strong employer brand and CSR
which, in turn, can enhance an organisation’s attractiveness to the best
talent. [11] COM(2012)173, 18.04.2012 [12] SWD(2012)99, 18.04.2012 [13] An alternative way of estimating the number of traineeships is the
following: assuming that the number of traineeships as a percentage of the
ISCED levels 5-6 student population is roughly constant, we extrapolate the
ratios for three large member States (FR, DE, IT), for
which estimates of the number of traineeships are available, to the entire EU
student population. This yields a result of more than 6 million traineeships.
This result confirms that 4.5 million is a prudent estimate. [14] See Traineeship study, p. 94. [15] Communication COM(2007)498. Also COM(2009)257 referred
generally to the need for traineeship places: "Companies should also
continue to offer traineeship places to develop the employability of students [16] www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/131388.pdf [17] The rationale for this being
that, normally, the offer of high quality traineeships is linked at least
partly with the intention to hire some trainees in the future, whereas
exploitative situations are characterised by a repetition of traineeships under
the guise of future hopes of employment which never materialise. [18] In parallel, an obligation to
sign an agreement with the trainee and register it with the labour office or a
similar authority might be considered. Given the enforcement difficulties
identified by the literature, registration might allow monitoring adherence to
the rules and ensure respect of social security coverage and similar
provisions. It might also help improve the data situation on traineeships. Such
a measure could be introduced either by agreements between social partners or
through legislation. [19] Brennan, J. Patel, K., and Tang, W., (2009). Diversity
in the Student Learning Experience and Time devoted to Study: A Comparative
Analysis of the UK and European Evidence, Report to HEFCE by the Centre for
Higher Education Research and Information, The Open University, April