EUROPEAN COMMISSION

Strasbourg, 8.3.2016

COM(2016) 127 final

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS

Launching a consultation on a European Pillar of Social Rights

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1. Introduction

President Juncker announced the establishment of a European Pillar of Social Rights in his State of the Union address in the European Parliament on 9 September 2015. This initiative is part of the work undertaken by the Commission for a deeper and fairer Economic and Monetary Union (EMU) 1 and part of the Commission 2016 Work Programme.

As President Juncker indicated in his speech: “We have to step up the work for a fair and truly pan-European labour market. (…) As part of these efforts, I will want to develop a European Pillar of Social Rights, which takes account of the changing realities of Europe's societies and the world of work. And which can serve as a compass for the renewed convergence within the euro area. The European Pillar of Social Rights should complement what we have already jointly achieved when it comes to the protection of workers in the EU. I will expect social partners to play a central role in this process. I believe we do well to start with this initiative within the euro area, while allowing other EU Member States to join in if they want to do so.”

This Communication outlines a way forward for the European Pillar of Social Rights. It sets out the rationale behind the initiative, discusses its role, scope and nature, and launches a broad consultation aimed at gathering feedback. A first, preliminary outline of the Pillar is annexed to this Communication to facilitate the discussion. This Communication is also accompanied by two Staff Working Documents: the first one describes key economic, labour market and societal trends on which the Pillar builds, and which it should contribute to address, and the second one recalls the most relevant legal "acquis" at EU level. 2  

2. Why a European Pillar of Social Rights

2.1. A highly competitive social market economy

Action at EU level reflects the Union’s founding principles and builds on the conviction that economic development should result in greater social progress and cohesion and that, while ensuring appropriate safety nets in line with European values, social policy should also be conceived as a productive factor, which reduces inequality, maximises job creation and allows Europe's human capital to thrive. This conviction is confirmed by evidence on employment and social performance. The best performing Member States in economic terms have developed more ambitious and efficient social policies, not just as a result of economic development, but as a central part of their growth model. Key to this is the design of welfare systems and labour market institutions fulfilling their role and supporting job creation.  

This approach is also at the core of the overall economic agenda of this Commission, as exemplified by its Annual Growth Survey 2016. In its focus on promoting structural reforms, investment and responsible fiscal policies, the Commission has put a clear emphasis on social considerations and social fairness.

In line with the principle of subsidiarity, Member States are primarily competent for the definition of their employment and social policies. This includes labour law and the organisation of welfare systems. Such competence is recognised in the EU Treaties which, since the foundation of the European Economic Community, also foresee a role for the EU to complement Member States' actions. Article 3 of the Treaty on European Union reflects this overall objective, which is to "work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment."

This is why the establishment and deepening of the European single market has gone hand-in-hand with the development of a legal "acquis" in the social field at EU level, to ensure a level-playing field, limit the risk of social dumping or "race to the bottom", and facilitate economic and social integration. This is also why, since the 1990s, employment and social considerations have been an essential feature of the process of economic policy coordination at EU level, now known as the European Semester. The rationale behind the European Pillar of Social Rights follows this logic and responds to a double need: overcoming the crisis and looking beyond, and moving towards a deeper and fairer EMU.

2.2. Overcoming the crisis and looking beyond

Europe is emerging from its worst crisis in decades: every Member State and the EU as a whole are struggling with the political, economic and social consequences, while seeking to anticipate future developments. The crisis has had severe and visible effects on Europe's society and economy. Welfare systems have cushioned some of the impact, but unemployment has risen, a significant share of the population is at risk of poverty, public finances have been stretched, and national performances have diverged markedly. Unemployment, in particular, has been taking a very heavy toll on individuals and society for many years: almost 22 million persons are still out of work and looking for a job (close to 17 million in the euro area), of which 10 million have been doing so for more than a year.

The crisis has also partly hidden some and accentuated other more fundamental long-term trends. Among these are, for instance, changes in societal structures, family and work patterns; longer and more varied working lives; a more diverse workforce and the spread of new forms of work; the paradox between rising levels of education and widespread skills mismatches; increased inequalities; new needs and opportunities emerging from progress in life expectancy and demographic ageing; technological change and the digitisation of society and the economy.

The scope and nature of challenges confronting the world of work, and society more generally, have changed radically compared to the 20th century, and there are many new or forthcoming trends which Europe will need to adapt to. The objectives of social policy and its capacity to deliver are being significantly tested, and Europe's capacity to achieve well-functioning and fair labour markets and welfare systems is key to its ability to boost productivity, compete globally, strengthen social cohesion and keep increasing the living standards of its citizens.

Such reflection is gaining prominence internationally, as well as within each Member State. 3 In spite of the uncertainties about the future, there is growing evidence and global consensus on the need to strengthen the link between economic, social and environmental development, on the fact that inequalities hold back economic development, and on the need to build a more inclusive growth model, as illustrated in the Sustainable Development Goals adopted by the United Nations in September 2015, as well as in repeated conclusions from the G20. This global agenda draws heavily on the vast amount of research done by international organisations, such as the Organisation for Economic Cooperation and Development, the World Bank, the International Labour Organization and the International Monetary Fund.

These publications highlight that one important transmission mechanism between long-term growth, equality and social progress is investment in human capital. They also confirm that income inequality may have a long-term negative impact on potential growth by consolidating and reinforcing existing inequalities of opportunities, limiting skills development and hampering social and occupational mobility. In advanced economies, which base their prosperity on productivity growth and their capacity to innovate, social and economic performances are two sides of the same coin.

Modern social policy should rely on investment in human capital based on equal opportunities, the prevention of and protection against social risks, the existence of effective safety nets and incentives to access the labour market, so as to enable people to live a decent life, change personal and professional statuses over the lifetime and make the most of their talent.

2.3. Moving towards a deeper and fairer Economic and Monetary Union

The euro area is drawing the lessons from the crisis of recent years and has embarked on a process of further integration and consolidation. This necessarily includes a social dimension. The Five Presidents' Report on Completing Europe's EMU 4 stresses that "Europe's ambition should be to earn a 'social triple A'" and that "for EMU to succeed, labour market and welfare systems need to function well and in a fair manner in all euro area Member States". While recalling that there is no "one-size-fits-all" template, the Report underlines that the challenges are often similar across Member States. It also calls for a stronger focus on employment and social performance as part of a broader process of upward convergence towards more resilient economic structures within the euro area.

This is not just a political or social imperative, it is also an economic necessity: the experience of the past decade and a half has shown that persisting imbalances in one or several Member States may put at risk the stability of the euro area as a whole, and that an inability to correct these may result in even further costly divergence. After the crisis of 2007-2008, the euro area became more heterogeneous, with some countries particularly hit, and this heterogeneity takes time to reduce. Looking ahead, it is clear that the future success of the euro area depends, in no small measure, on the effectiveness of national labour markets and welfare systems and on the capacity of the economy to absorb and adjust to shocks.

Performing and inclusive labour markets need to effectively combine elements of flexibility and security, which can deliver higher levels of employment and adjustment capacities. The related concept of "flexicurity" is not new but in the aftermath of the crisis, and in light of a changing world of work, it is time to redefine how it can be best applied in practice. Firms have an interest in a predictable and legally secure business environment, in being able to attract skilled and productive workers but also to adjust to fast-changing market realities. Workers have an interest in job and income security, to be able to reconcile work and private life, but also to take up new challenges and adapt throughout their careers, and to keep accumulating skills, in a lifelong perspective. Unemployed and inactive people are often looking for ways to the world of work, which do not trap them in low-quality, low-pay jobs, or deprive them of essential social rights. The economy and society, particularly within the euro area, have an interest in better development and use of skills, greater agility and resilience, social cohesion and a fair and effective distribution of rights, duties and incomes, also across generations.

At the same time, high unemployment and demographic ageing, combined with pressures on public finances and the need to minimise spill-overs between countries ensuing from macroeconomic imbalances, have put to the fore the question of the performance of national welfare systems, from several points of view: first, as regards their adequacy and fiscal sustainability in the light of evolving social needs, including the need to address poverty; second, as regards their impact on job creation, both from an employer and a jobseeker perspective, including their capacity to make work pay and to strengthen people's skills and ability to participate fully in society; and third, an aspect which is particularly important for the euro area, as regards their capacity to buffer macroeconomic shocks and play an automatic stabilisation function. High employment, low unemployment and well-designed welfare systems are key for sound public finances, and too strong divergences in labour market and social performance create a threat to the functioning of the euro area. As part of the steps taken to improve fiscal surveillance at EU level, the reflection on the quality of public finances, of which welfare systems constitute a large share, has led to increased attention to issues related to the fairness and efficiency of public revenues and expenditure.

2.4. Building on a wealth of experience

The European Pillar of Social Rights can draw on a wealth of experience and practices: in many fields, the world's best performers are to be found in Europe, and solutions are well known. However, given the extent of today's challenges, complacency and status quo are not an option. There is also a lot to learn from fast-changing realities across the world.

While acknowledging that situations differ widely across Member States, the Pillar can also build on the common values and principles shared at national, European and international levels. Such values and principles feature prominently in reference documents such as the Treaty on European Union (TEU), the Treaty on the Functioning of the European Union (TFEU), the Charter of Fundamental Rights and the case-law of the Court of Justice of the European Union, as well as in international instruments such as the Social Charter adopted by the Council of Europe and recommendations from the ILO.

Such frameworks often cover a wide range of domains, where they define general principles or minimum standards, to be complemented at national, regional or local level. The key issue in Europe is thus not necessarily one of recognition of rights, but rather their actual take-up and implementation, given the rapid changes in the social, legal and economic environment.

Over the years, the Commission has taken initiatives to strengthen efforts on pressing priorities and to update the EU "acquis". Such efforts follow the logic of better regulation: this is not less regulation, but an approach to regulation that takes full account of the economic, social and environmental impact on the ground, to make sure that each initiative reaches its goal in the best manner. During this mandate, the Commission has rolled out the European Structural and Investment Funds for 2014-2020, of which close to 20% is mobilised through the European Social Fund. It has also acted on several fronts, to name a few:

Greater attention to social considerations in the European Semester of economic policy coordination, the use of social indicators in the so-called macroeconomic imbalances procedure, the promotion of "social benchmarking" and an assessment of the social impact of the new stability support programme for Greece;

Mainstreaming social objectives in flagship initiatives such as the Investment Plan for Europe, the Energy Union and the Digital Single Market;

Presenting a strategic engagement for gender equality for 2016-2019;

Frontloading financial support for Member States to establish a Youth Guarantee, which foresees that all young people under 25 should get a good-quality, concrete offer within 4 months of them leaving formal education or becoming unemployed;

Issuing guidance to the Member States on the reintegration of long-term unemployed into the labour market;

Proposing a European Accessibility Act to facilitate access to essential goods and services for disabled people in the single market;

Proposing a Revision of the Posting of Workers Directive to promote the principle of equal pay for equal work at the same place.

Work is also underway in 2016 on several additional aspects, and will continue in parallel with the consultation on the Pillar: for a fresh start to promote work-life balance for working parents; for a European Skills Agenda; and for a thorough evaluation of the 24 occupational health and safety Directives; which should help to assess their relevance, effectiveness and coherence in order to maintain a high degree of workers' health and safety protection in the light of new risks, while simplifying and modernising the applicable legislation, also to facilitate take-up by SMEs. These examples are illustrative of the supporting, guiding and framing role the EU can play in the social field, and of further actions that may unfold from the establishment of the Pillar.

A key priority for this Commission is also to encourage social dialogue at all levels. Following a high-level conference on a new start for EU social dialogue, in March 2015, EU social partners at cross-industry level have agreed on a joint in-depth employment analysis and a joint work programme for 2015-2017. Negotiations have started on an autonomous framework agreement on active ageing; joint conclusions are being prepared on the issue of work-life balance; and a working group is looking at the implementation by their members of their previous autonomous framework agreements. EU sectoral social partners, represented in 43 different sectors and representing 75% of the workforce, have also continued to deliver on their respective joint work programmes.

3. The European Pillar of Social Rights: role, scope and legal nature

The purpose of the Pillar is to express a number of essential principles to support well-functioning and fair labour markets and welfare systems. As indicated by President Juncker, the Pillar will be developed within the euro area, while allowing other EU Member States to join in if they want to do so.

The Pillar will thus build on, and complement, the existing EU-level social "acquis", and the principles it contains will have a specific focus on addressing the needs and challenges confronting the euro area. Once established, the Pillar should become a reference framework to screen the employment and social performance of participating Member States, to drive reforms at national level and, more specifically, to serve as a compass for renewed convergence within the euro area.

3.1. Outlining principles fit for today's and tomorrow's realities

In annex to this Communication, a first, preliminary outline of the Pillar is presented for discussion. The principles have been selected for both their economic and social importance for the performance of participating Member States.

The outline is structured around three main headings:

Equal opportunities and access to the labour market, including skills development and life-long learning and active support for employment, to increase employment opportunities, facilitate transitions between different statuses and improve the employability of individuals.

Fair working conditions, to set an adequate and reliable balance of rights and obligations between workers and employers, as well as between flexibility and security elements, to facilitate job creation, job take-up and the adaptability of firms, and promoting social dialogue.

Adequate and sustainable social protection, as well as access to high quality essential services, including childcare, healthcare and long-term care, to ensure dignified living and protection against risks, and to enable individuals to participate fully in employment and more generally in society.

A number of policy domains are identified, to which different principles are attached. These principles take as a starting point a number of rights already inscribed in EU and other relevant sources of law, and set out in greater detail possible ways to operationalise them. These formulations also draw inspiration from existing guidance at EU level, for instance in the context of the coordination of economic policy, while seeking to capture latest trends.

For each of these principles, the situation across Europe varies widely, and there are many practical difficulties, big and small, to address. These typically include different interests between individuals, firms and society; possible trade-offs between short-term and long-term solutions; the existence of "grey zones", also as a result of the blurring of the notion of work; and the issue of "who pays for what", depending on whether private or public financing is expected to play a role. There is also the challenge of designing new standards and practices in a way which can be consistent with the needs of a dynamic economy in order to sustain the process of upwards convergence across regions and Member States.

The logic of the Pillar, and of the discussion leading towards it, is not to hide these differences and tensions, but to expose and confront them in a new light, which takes account of the changing realities of the world of work and of the diversity of situations across Europe. In so doing, the Pillar should help to modernise, broaden and deepen social rights, at work and in society, by facilitating their actual take-up and by promoting practices that can be beneficial from an individual, firms and societal point of view.

3.2. Adding value for the euro area and the EU as a whole

The Pillar does not repeat nor paraphrase the EU "acquis": it spells out in more detail principles and commitments that can steer greater convergence within the euro area. And, in the same way that the Pillar does not replace the "acquis", the principles proposed here do not replace existing rights: they offer a way to assess and, in future, approximate for the better the performance of national employment and social policies.

But the process leading to the Pillar should also be an occasion to revisit the "acquis". The present "acquis" has been established step by step, at different points in time, with some domains better covered than others. The consultation on the Pillar provides an opportunity to take a holistic view of the "acquis", to review its relevance in the light of new trends and to identify possible areas for future action, at the appropriate level.

Such stocktaking should notably serve to answer the following questions: is there a deficit in the implementation of the "acquis"? Are there fundamental gaps in the social rights laid down at EU level? How can such deficits and/or gaps be accounted for? This is also why the consultation process leading to the Pillar will be open to all Member States and should also help those not in the euro area to decide whether to join in the Pillar.

The work on establishing the Pillar will complement other on-going efforts to deepen EMU 5 and should serve as a contribution to the work on the White Paper on the future of Europe's EMU, foreseen in spring 2017. In particular, the Five Presidents' Report on Completing Europe's EMU highlighted the need to pursue the convergence process towards more resilient economic structures, and to make such processes more binding in the medium term. This would be achieved by agreeing on a set of common high-level standards, which should focus, among others, on labour markets.  

Ultimately, the legal nature of the Pillar itself will need to take account of the scope and legal limitations at EU and euro area levels. For instance, Article 153 of the Treaty on the Functioning of the European Union clearly does not provide competence of the Union to legislate on “pay”.

While various instruments can be considered to establish the Pillar, such as a Recommendation, the Commission will find it essential to involve Parliament and Council, as well as other EU institutions, and to gather broad support for its implementation.

4. Objectives of the consultation

The establishment of the Pillar is an opportunity to steer the thinking on existing social rights, on the particular needs of the euro area, on the changing realities of the world of work, as well as on the reforms needed at all levels. The consultation process should therefore be as far-reaching as possible.

4.1. Suggested outcomes

The consultation process has three main aims:

A first aim is to make an assessment of the present EU "acquis". In particular, the consultation should help to determine the extent to which existing rights are practiced and remain relevant for today's and tomorrow's challenges, and/or whether new ways to deliver on these rights should be considered.

A second aim is to reflect on new trends in work patterns and societies, due to the impact of demographic trends, new technologies and other factors of importance for working life and social conditions. The identification of best practices and lessons from social innovation should be actively encouraged.

A third aim is to gather views and get feedback on the outline of the European Pillar of Social Rights itself. The consultation should serve to discuss its scope and content, as well as its role as part of the social dimension of the EMU, to reflect on the particular needs of the euro area, to discuss the specificity of the principles proposed here and to explore the related challenges linked to these. The consultation should also help Member States not in the euro area to determine whether to participate in the Pillar.

The consultation process should be concluded by 31 December 2016, as the basis for the Commission to put forward a final proposal for the Pillar early in 2017.

4.2. Mobilising for the debate

In the coming months, the Commission will actively engage with other EU institutions, national authorities and parliaments, trade unions and business associations, NGOs, social service providers, experts from academia, as well as the public. At national level, the Commission will facilitate discussions through its Representations in the Member States,

EU social partners will be invited to play an active role in shaping the Pillar. The Commission will also request the opinion of the European Economic and Social Committee and of the Committee of the Regions.

4.3. Structured feedback

In addition to the public consultation, three work streams will be organised to feed into the discussion, one for each suggested outcome highlighted above:

The EU social "acquis": taking stock.

The future of work and of welfare systems: challenges and opportunities.

The role of the European Pillar of Social Rights as part of a deeper and fairer EMU.

The Commission will hold a European conference by the end of 2016 to gather feedback.

4.4. Informing the discussion

A dedicated webpage is established for the consultation at: http://ec.europa.eu/priorities/
deeper-and-fairer-economic-and-monetary-union/european-pillar-social-rights  

This will include:

This Communication and supporting Staff Working Documents.

A set of factsheets, prepared by the services of the Commission, presenting in greater detail the economic and legal reasoning behind the domains retained in the outline of the Pillar annexed to this Communication.

The activities foreseen as part of each work stream mentioned above.

A list of meetings and events foreseen at EU and national level in the coming months.

5. Questions for the consultation

The Commission invites all interested parties to reply to the questions set out in this Communication, together with any additional comments, by 31 December 2016.

This can be done by filling out an online questionnaire, available at the dedicated webpage mentioned above, by sending input by email to the following email address:

EMPL-EUROPEAN-PILLAR-OF-SOCIAL-RIGHTS@ec.europa.eu  

or by post to:

EUROPEAN COMMISSION

Directorate-General Employment, Social Affairs and Inclusion

Rue Joseph II, 27 – 00/120

B-1049 BRUXELLES 6  

The questions for which the European Commission seeks views are the following:

On the social situation and EU social "acquis"

1.What do you see as most pressing employment and social priorities?

2.How can we account for different employment and social situations across Europe?

3.Is the EU "acquis" up to date and do you see scope for further EU action?

On the future of work and welfare systems

4.What trends would you see as most transformative?

5.What would be the main risks and opportunities linked to such trends?`

6.Are there policies, institutions or firm practices – existing or emerging – which you would recommend as references?

On the European Pillar of Social Rights

7.Do you agree with the approach outlined here for the establishment of a European Pillar of Social Rights?

8.Do you agree with the scope of the Pillar, domains and principles proposed here? Are there aspects that are not adequately expressed or covered so far?

9.What domains and principles would be most important as part of a renewed convergence for the euro area?

10.How should these be expressed and made operational? In particular, do you see the scope and added value of minimum standards or reference benchmarks in certain areas and if so, which ones?

It is also possible to comment on each domain and principle of the proposed Pillar by filling in a more specific on-line questionnaire, on the webpage of the consultation.

(1)

Political Guidelines for the next European Commission, 15 July 2014, "A New Start for Europe: My Agenda for Jobs, Growth, Fairness and Democratic Change".

(2)

 Commission Staff Working Documents "Key economic, employment and social trends behind the European Pillar of Social Rights", (SWD (2016) 51), and "The EU social acquis" (SWD(2016) 50) of 8 March 2016.

(3)

 See, for instance, ILO (2015), "The future of work centenary initiative"; OECD (2016), "Policy forum on the future of work"; Bertelsmann Stiftung (2015), "Redesigning European welfare states – Ways forward"; Bundesministerium für Arbeit und Soziales (2015), "Green Paper: Re-Imagining Work. Work 4.0"; World Economic Forum (2016), "The Future of Jobs: Employment, Skills and Workforce Strategy for the Fourth Industrial Revolution"; OECD, IMF, World Bank and the ILO (2015), "Income inequality and labour income share in G20 countries: Trends, Impacts and Causes".

(4)

"Completing Europe's Economic and Monetary Union", Report by Jean-Claude Juncker, in cooperation with Donald Tusk, Jeroen Dijsselbloem, Mario Draghi and Martin Schulz, June 2015. In their joint contribution to the Report, France and Germany, for instance, stressed the need to reinforce the cooperation and common orientations in certain areas such as active labour market policies and social security systems. See also European Political Strategy Center (2015), "The Social Dimension of Economic and Monetary Union". 

(5)

COM (2015) 600 of 21 October 2015 on steps towards Completing Economic and Monetary Union.

(6)

Please note that all received contributions, together with the identity of the contributor, will be published on the Internet, unless the contributor objects to publication of the personal data on the grounds that such publication would harm his or her legitimate interests. In this case, the contribution may be published in anonymous form. Otherwise, the contribution will not be published nor will, in principle, its content be taken into account.

EUROPEAN COMMISSION

Strasbourg, 8.3.2016

COM(2016) 127 final

ANNEX

First preliminary outline of a European Pillar of Social Rights

Accompanying to the

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS

Launching a consultation on a European Pillar of Social Rights

{SWD(2016) 50 final}
{SWD(2016) 51 final}

Table of Contents

CHAPTER I : EQUAL OPPORTUNITIES AND ACCESS TO THE LABOUR MARKET

1.Skills, education and life-long learning

2.Flexible and secure labour contracts

3.Secure professional transitions

4.Active support for employment

5.Gender equality and work-life balance

6.Equal opportunities

CHAPTER II : FAIR WORKING CONDITIONS

7.Conditions of employment

8.Wages

9.Health and safety at work

10.Social dialogue and involvement of workers

CHAPTER III : ADEQUATE AND SUSTAINABLE SOCIAL PROTECTION

11.Integrated social benefits and services

12.Health care and sickness benefits

13.Pensions

14.Unemployment benefits

15.Minimum income

16.Disability benefits

17.Long-term care

18.Childcare

19.Housing

20.Access to essential services

Explanatory note

This annex presents a first, preliminary outline of the European Pillar of Social Rights for the consultation of the general public. The Pillar is conceived to be established within the euro area, but would also be open for other Member States to join on a voluntary basis.

The starting point of the Pillar is the social objectives and rights inscribed in the EU primary law, consisting of the Treaty on European Union (TEU), the Treaty on the Functioning of the European Union (TFEU), the Charter of Fundamental Rights and the case-law of the Court of Justice of the European Union. To ensure a broad enough basis for consultation, the Pillar touches on both on areas which are where the EU is competent to legislate and on others where Member States are primarily responsible, and where the EU has a more supportive and complementary role. It also draws inspiration from practices at national level and international sources of law.

The outline of the Pillar does not re-state or modify existing rights, which remain valid. It aims to complements them by detailing a number of essential principles which should become common to participating Member States for the conduct of their employment and social policy, with a specific focus on the needs and challenges confronting the euro area. Once established, the Pillar should become a reference framework to screen the employment and social performance of participating Member States, to drive reforms at national level and, more specifically, to serve as a compass for renewed convergence within the euro area.

The principles presented here are grouped according to 20 policy domains, which are seen as essential for well-functioning and fair labour markets and welfare systems. They take account of economic and social considerations and of the wide diversity of situations in Europe and of changing realities on the ground. They address key concerns for a deeper and fairer Economic and Monetary Union, such as the need to boost competitiveness, to increase participation in the labour market, develop adequate social protection floors, make full use of people's potential, ensure the sustainability of public finances and increase the adjustment capacity and resilience of economic structures.

The principles presented here cover EU citizens and legally residing third country nationals, active or inactive, in line with the wording of each principle. Provisionally, for the purpose of this consultation, the term 'worker' designates any person who, for a certain period of time, performs services for another person in return for which she or he receives remuneration, and acts under the direction of that person as regards, in particular, the determination of the time, place and content of her or his work.

'Self-employed' designates all persons pursuing a gainful activity for their own account. 'Persons in employment' refers to both workers and self-employed. The scope of application of these terms may need to be further refined during the process of consultation.

The choice and formulation of the principles draw inter alia on existing guidance in the European Semester of economic policy coordination, on EU secondary legislation and on "soft law" guidance where it exists. To better situate each principle, the outline gives indication of the main outstanding challenges, points to the potential added value of each principle and recalls the corresponding rights in primary law through boxes, where applicable. The principles should be widely discussed and refined in the context of the consultation process, with a view to finalising a proposal for the European Pillar of Social Rights in 2017.

CHAPTER I: EQUAL OPPORTUNITIES AND

ACCESS TO THE LABOUR MARKET

1.Skills, education and lifelong learning

Basic skills in language, literacy, numeracy and ICT, which are the first building blocks for learning, remain a challenge for a significant share of the population, from children to adults. To increase quality and relevance of education outcomes, education and training systems need to become more effective, equitable and responsive to labour market and societal needs. Equal access regardless of economic means to acquiring a foundation of basic skills and key competences in initial education needs to be complemented by quality opportunities for adults to acquire basic skills and key competences throughout the life course. Population ageing, longer working lives and increased immigration of third country nationals require additional actions for up-skilling and life-long learning, to successfully adapt to technological transformations and fast-changing labour markets.

a.All persons shall have access to quality education and training throughout the life course to acquire an adequate level of basic skills and key competences for active participation in society and employment. Low skilled young people and working age adults shall be encouraged to up-grade their skills.

2.Flexible and secure labour contracts

Flexible contracts can facilitate entry to the labour market and promote career transitions, while allowing employers to respond to shifts in demand. Digital economies are changing the work patterns and leading to new forms of work such as self-employment. This may allow more diverse entry routes in the labour market and can help to keep people active. Large differences in employment conditions persist however across different employment contracts.

Moreover, there are "grey zones", such as 'dependent' and 'bogus' self-employment, leading to unclear legal situations and barriers to access social protection. Such phenomena risk leading to precariousness and/or two-tier, segmented labour markets, which hamper productivity and lead to exclusion. Non-permanent employment can raise risks of precariousness through lower levels of protection against dismissal, lower pay, limited access to social protection and training. Moving towards types of contracts that have comparable guarantees and costs can allow temporary employment to become a stepping stone towards stable and secure employment, while increasing the resilience of labour markets to shocks.

a.Equal treatment shall be ensured, regardless of employment contract, unless different treatment is justified on objective grounds. Misuse or abuse of precarious and non-permanent employment relationships shall be prevented.

b.Flexibility in the conditions of employment can offer a gateway to the labour market and maintain employers' ability to swiftly respond to shifts in demand; however, the transition towards open-ended contracts shall be ensured.

3.Secure professional transitions

Working lives are becoming more diverse, including multiple jobs and forms of employment, career interruptions, increased mobility and professional changes within one's lifetime. Making the most of technological change and fast-changing labour markets requires faster and improved support for job and professional transitions, as well as support for regular up-skilling throughout the working life.

Up-skilling requires investment from individual workers, companies and society. Some social protection entitlements, such as occupational pensions, unemployment benefits, health insurance or training entitlements cannot always be easily transferred when changing jobs, nor can they be valorised or accrued when starting up self-employment. Conversely, some of the entitlements of jobseekers or inactive persons should not become disincentives to re-staring work or starting up own enterprises.

a.All working age persons shall have access to individualised job-search assistance and be encouraged to take up training and up-skilling in order to improve their labour market or entrepreneurial prospects and faster job and professional transitions.

b.The preservation and portability of social and training entitlements accumulated during the career shall be ensured to facilitate job and professional transitions.

4.Active support to employment

Persistent, recurrent as well as long-term unemployment, in particular for young people and people with low skills, calls for adequate and targeted support for (re)entering work as well as measures to develop, skills, qualifications or work experience to enable entering into new occupations. Rapid and effective access to such measures can prevent labour market and social exclusion.

a.All people under the age of 25 years shall receive a good-quality offer of employment, continued education, an apprenticeship or a traineeship within a period of four months of becoming unemployed or leaving formal education.

b.It shall be equally ensured that registered long term unemployed persons are offered in depth individual assessments and guidance and a job integration agreement comprising an individual service offer and the identification of a single point of contact at the very latest when they reach 18 months of unemployment.

5.Gender equality and work life balance

Women continue to be underrepresented in employment, overrepresented in part-time work and lower-paid sectors, and receive lower hourly wages even though they have surpassed men in educational attainment. Supporting their labour market participation is fundamental for ensuring equality of opportunities, and becomes an economic imperative in a context of ageing workforce.

Lack of adequate leave and care arrangements for children and other dependent family members can discourage people with caring responsibilities, mainly women, from continuing their jobs or re-entering employment. Barriers to female participation in the labour market include lack of adequate work-life balance policies, fiscal disincentives for second earners or excessive taxation of labour, and stereotypes on fields of study and occupation.

Access of self-employed or workers who are not on full time and permanent contracts to paid family-related leave or insurance schemes remains uneven. Moreover, insufficient possibilities and encouragement for men to take leaves is reinforcing women’s roles as primary carers, with negative effects on female employment.

There is also an enhanced opportunity for flexibility in the organisation of work partly derived from digital environments and combination of several occupations in the sharing and collaborative economy. Flexible working arrangements can also help facilitate work-life balance by allowing both people in employment and firms to adapt working schedules and patterns to their needs.

a.Gender equality in the labour market and education shall be fostered, ensuring equal treatment in all areas, including pay, and addressing barriers to women's participation and preventing occupational segregation.

b.All parents and people with caring responsibilities shall have access to adequate leave arrangements for children and other dependent relatives, and access to care services. 1 An equal use of leave arrangements between sexes shall be encouraged, through measures such as the provision of remunerated leave for parents, both men and women.

c.In agreement between employers and workers, flexible working arrangements including in the area of working time shall be made available and encouraged, taking into account both workers and employers' needs.

6.Equal opportunities

Discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation is illegal throughout the Union. However certain groups face difficulties in accessing the world of work. In particular, third country nationals and ethnic minorities are under-represented in employment and incur a greater risk of poverty and social exclusion. It is important to address the obstacles to their participation, which can include language barriers or gaps in recognition of skills and qualifications. As far as discrimination on the grounds of nationality or ethnic origin is concerned, the experience on the ground shows a lack of awareness both of employers of non- discriminatory hiring practices and of people subject of discriminations of their rights.

Supporting their labour market participation is fundamental for ensuring equality of opportunities, and becomes an economic imperative in a context of ageing workforce.

a. Labour market participation of under-represented groups shall be enhanced, ensuring equal treatment in all areas, including by raising awareness and addressing discrimination.

CHAPTER II: FAIR WORKING CONDITIONS

7.Conditions of employment

New forms of flexible employment require additional care to specify the nature, volume or duration of work, to identify the employers as well as the associated level of social protection and to avoid abuses in periods of probation. Decentralised, self-organised forms of work can increase worker autonomy and boost business development, while leading to lower awareness of rights and unclear information requirements for employers. Existing EU legal provisions to inform employees on the conditions of employment do not apply from the start of employment and become more difficult to apply in increasingly transnational, mobile, digital and de-localised business organisation models. Complex, costly and uncertain regulation governing the termination of open ended contracts makes firms reluctant to hire and also lead to uneven enforcement of the rules in place.

a.Every worker shall be informed in written form prior to the start of employment on the rights and obligations derived from the employment relationship.

b.If there is a probation period, the probation period shall be of a reasonable duration; prior to its start, workers shall receive information on its conditions.

c.Dismissal of a worker is to be motivated, preceded by a reasonable period of notice, and there shall be an adequate compensation attached to it as well as access to rapid and effective appeal to an impartial dispute resolution system.

8.Wages

Minimum wages with an adequate level ensure a decent standard of living for workers and their families and contribute to tackle the incidence of in-work poverty. A wide coverage avoids distortions leading to a two-tier labour market. A predictable evolution of wages is important for a stable business environment. Minimum wages need to be set at a level maintaining employment prospects for the low skilled and make work pay for the unemployed and inactive. Maintaining an evolution of wages in line with productivity has proven crucial for competitiveness, particularly within the euro zone.

a.All employment shall be fairly remunerated, enabling a decent standard of living. Minimum wages shall be set through a transparent and predictable mechanism in a way that safeguards access to employment and the motivation to seek work . Wages shall evolve in line with productivity developments, in consultation with the social partners and in accordance with national practices.

9.Health and safety at work

New challenges for health and safety at work have emerged in light of less stable employment relationships, new working patterns and an ageing workforce. Ensuring protection against occupational injuries and ill-health to all workers, irrespective of the form of employment and addressing "grey zones", such as 'dependent' and 'bogus' self-employment leading to unclear legal situations offers an important way to reduce precariousness, social costs and improve firms' productivity. Reinforcing reintegration and rehabilitation efforts requires more involvement of the employers for re-training or workplace adaptation. However, enforcing preventive and corrective measures by small enterprises remains burdensome.

a.An adequate level of protection from all risks that may arise at work, with due support for implementation, notable in micro and small enterprises, shall be ensured.

10.Social dialogue and involvement of workers

Well-functioning social dialogue requires autonomous and representative social partners with the capacities to reach collective agreements. Given the decreases in terms of organisational density and representativeness, social partners need to further build their capacities to engage in a better functioning and effective social dialogue. The engagement of social partners at EU and national level is crucial for the success of design and implementation of economic and social policies, including in efforts to safeguard employment in periods of economic downturns. Moreover, new forms of work organisation such as in the services sector and in the digital economy make the involvement of workers uneven, and their information and consultation more complex.

a.Social partners shall be consulted in the design and implementation of employment and social policies. They shall be encouraged to develop collective agreements in matters relevant to them, respecting national traditions, their autonomy and right to collective action.

b.Information and consultation shall be ensured for all workers, including those working digitally and/or operating across borders, or their representatives in good time, in particular in the case of collective redundancies, transfer, restructuring and merger of undertakings.

CHAPTER III: ADEQUATE AND SUSTAINABLE SOCIAL PROTECTION

11.Integrated social benefits and services

In some cases, the multiplicity of benefits and services, agencies, and application procedures make it difficult for people to access all the support that they need. Lack of integrated benefits and services also reduces their effectiveness in addressing poverty, as well as supporting social and labour market integration. A three-fold alignment between social benefits, active support and social services is key to effective support. Such alignment should concern eligibility and coverage, coordinated offers of support and maintaining some entitlements when re-entering work or self-employment. Better integration of benefits and services can improve the cost-effectiveness of social protection.

a.Social protection benefits and services shall be integrated to the extent possible in order to strengthen the consistency and effectiveness of these measures and support social and labour market integration.

12.Healthcare and sickness benefits

Population ageing and the high costs of treatments are putting increased pressure on the financial sustainability of health systems and the ability to provide adequate healthcare for all. High cost of treatment relative to income, or too long waiting periods have been shown to be key determinants in the inability to access medical care. Ensuring universal access to high quality care while guaranteeing the financial sustainability of health systems, encouraging the cost-effective provision of care, and encouraging health promotion and disease prevention requires increased efforts in improving the resilience, efficiency and effectiveness of health systems, and can improve the ability of healthcare systems to cope with the challenges. Providing universal access to healthcare and addressing health inequalities will reinforce social cohesion and improve economic outcomes.

Arrangements for sickness benefits and/or paid sick leave vary considerably in what concerns waiting days, duration, replacement levels and control mechanisms. Securing an adequate minimum replacement level of sickness benefits and encouraging rehabilitation and reintegration while, simultaneously, maintaining the financial sustainability of such schemes remains a challenge.

a.Everyone shall have timely access to good quality preventive and curative health care, and the need for healthcare shall not lead to poverty or financial strain. 

b.Healthcare systems shall encourage the cost-effective provision of care, while strengthening health promotion and disease prevention, in order to improve the resilience of healthcare systems and their financial sustainability.

c.All workers, regardless of contract type, shall be ensured adequately paid sick leave during periods of illness; the participation of the self-employed in insurance schemes shall be encouraged. Effective reintegration and rehabilitation for a quick return to work shall be encouraged.

13.Pensions

Rising longevity and a shrinking working age population raise a double challenge of ensuring the financial sustainability of pensions and being able to provide an adequate income in retirement. Linking the statutory age to life expectancy and reducing the gap between the effective and statutory retirement age by avoiding early exit from the labour force are important for reconciling the long-term sustainability of public finances while maintaining inter-generational fairness.

Pension inadequacy is an additional challenge in several Member States. A high gender pension gap also exists in most countries, with women's lower earnings and accumulated career gaps leading to lower pension contributions, and ultimately lower pension entitlements.

The self-employed and those in atypical employment also experience higher pension adequacy risks and lower coverage of occupational pensions.

a.Pensions shall ensure all persons a decent standard of living at retirement age. Measures shall be taken to address the gender pension gap, such as by adequately crediting care periods. According to national specificities, the participation of the self-employed in pension schemes shall be encouraged.

b.Pension systems shall strive to safeguard the sustainability and future adequacy of pensions by ensuring a broad contribution base, linking the statutory retirement age to life expectancy and by closing the gap between the effective retirement and statutory retirement age by avoiding early exit from the labour force.

14.Unemployment benefits

Effective unemployment benefits succeed to allow job search and improve skills matching, provide economic security during unemployment spells, prevent poverty and allow automatic stabilisation in economic downturns. In some cases the coverage of unemployment benefits is very low due to strict eligibility requirements. The duration of benefits in some Member States, as well as the enforcement of conditions for job search and participation in active support are a concern.

a.Action to support the unemployed shall include the requirement for active job search and participation in active support combined with adequate unemployment benefits. The duration of benefits shall allow sufficient time for job search whilst preserving incentives for a quick return to employment 2 .

15.Minimum income

Minimum income for persons in or at risk of poverty and lacking other means of subsistence is provided by most but not all Member States. However, current challenges include inadequacy of benefit levels making it impossible for beneficiaries to escape poverty, low coverage, and non-take-up of minimum income support due to complexity in accessing these arrangements. For those of working age, weak links to active support and social services, as well as benefits not tapered when re-entering employment, can lead to benefits traps and disincentives to work. Income security insufficiently covers those who exhaust their unemployment benefits, with weak coordination between unemployment and minimum income benefits. For the elderly, in most Member States minimum income provisions are insufficient in lifting those without any other resources out of poverty.

a.Adequate minimum income benefits shall be ensured for those who lack sufficient resources for a decent standard of living. For those of working age, these benefits shall include requirements for participation in active support to encourage labour market (re)integration.

16.Disability

People with disabilities are much higher risk of poverty and social exclusion than the general population. They face the lack of adequate accessibility in the work-place, discrimination and tax-benefit disincentives. The design of disability benefits can lead to benefit traps, for example when benefits are withdrawn entirely once (re-)entering employment. The availability of support services can also affect the capacity to participate in employment and community life.

a.Persons with disabilities shall be ensured enabling services and basic income security that allows them a decent standard of living. The conditions of benefit receipt shall not create barriers to employment.

17.Long-term care

Population ageing, changing family structures and women's increased participation in the labour market all contribute to the increased demand for long-term care services. Family carers, usually women, often fill the gap left by unavailable or costly institutional care services. Formal home-based care, although preferred by many beneficiaries and family members remains under-developed, making informal care is often the only option for many families, putting a high financial burden on those affected. Ensuring access to adequate long-term care services, while guaranteeing the financial sustainability of long-term care systems, thus requires increased efforts in improving the provision and financing of long-term care.

a.Access to quality and affordable long-term care services, including home-based care, provided by adequately qualified professionals shall be ensured

b.The provision and financing of long-term care services shall be strengthened and improved in order to ensure access to adequate care in a financially sustainable way.

18.Childcare

Childcare services improve the cognitive and social development of children, especially those living in disadvantaged households, and enhance educational and labour market prospects later on in life. Formal childcare is also a key tool for work-life balance, encouraging parental employment, especially for women. However, limited availability, access, affordability and quality remain major obstacles and hamper children’s development. The access of children from disadvantaged backgrounds to these services also remains challenging.

a.Access to quality and affordable childcare services, provided by adequately qualified professionals, shall be ensured for all children.

b.Measures shall be taken at an early stage and preventive approaches should be adopted to address child poverty, including specific measures to encourage attendance of children with disadvantages backgrounds.

19.Housing

Lack of adequate housing and housing insecurity continues to be a large concern across the EU, leading to increasing financial risk taking, evictions, arrears in rental and mortgage payments, and in some extreme cases, homelessness. Restrictions to supply in housing sector and rental market distortions are contributing to the lack of availability. Lack of adequate housing also remains a barrier for labour mobility, for the establishment of young people on the labour market and for fulfilment of life plans and independent living.

a.Access to social housing or housing assistance shall be provided for those in need. Protection against eviction of vulnerable people shall be ensured, and support for low and medium income households to access home property provided.

b.Shelter shall be provided to those that are homeless, and shall be linked up to other social services in order to promote social integration.

20.Access to essential services

Essential services, such as electronic communications, transport, energy (such as electricity and heating) and financial services (such as a bank accounts), which ensure the full social inclusion of people in society, as well as to ensure equal opportunities to access employment, are not always available or accessible to everyone in need of them. Barriers to access include affordability, lack of infrastructure, or failure to meet accessibility requirements for people with disabilities.

a.Affordable access to essential services including electronic communications, energy, transport, and financial services, shall be ensured for all people. Measures to support access to these services shall be available for those in need.

(1)  In accordance to Principles 17-18 below.

(2) As set out in Principle 3 above.