27.7.2007   

EN

Official Journal of the European Union

C 175/65

1.1

The Green Paper on modernising labour law sets out to:

1.2

In doing this, the Green Paper quite rightly proposes to address issues as diverse as three-way employment relationships, the case of workers with self-employed status who are in reality economically dependent on their principal, as well as the revision of the working time directive and the serious matter of undeclared work.

1.3

With regard to the possible ways of modernising labour law, where the EU can undertake action complementing that of the Member States, the Green Paper is based on the idea that the standard contract (full-time, permanent contract) and the protections that go with it may turn out to be unsuitable for many employers and employees, hindering the rapid adaptation of business and developments in the market, and may therefore act as an obstacle to the creation of new jobs. For this reason, these provisions should be revised.

1.4

The Commission announces that the Green Paper, aside from the issue of individual labour law, paves the way for a debate that will feed in to a communication on flexicurity, to be published in June 2007 with the aim of fleshing out this concept, which exists in several Member States and, according to what we know, combines external and internal flexibility of workers with some kind of security whose scope and funding is not explained in any more detail at this stage. The debate in the second half of the year will thus continue over a wider subject area, within which it would certainly be helpful to look at the elements of flexibility that have already been achieved through the law or collective bargaining and at the funding of this flexicurity, without focusing on any particular model.

2.1

The Committee notes with interest the initiative the Commission has taken in launching a discussion on the way in which labour law meets the objectives of the Lisbon Strategy, which combine the quest for sustainable growth with that for more, but also better, jobs, aside from social cohesion and sustainable development. However, it condemns the tight timescale under which this consultation is being carried out and the fact that a whole lot of preparatory work is lacking.

2.2

The Kok Report (November 2003) suggested ‘Promot[ing] flexibility combined with security in the labour market by focusing on improving work organisation and the attractiveness — for employers and employees — of both standard and non-standard labour contracts to avoid the emergence of two-tier labour markets. The concept of job security should be modernised and broadened with a view not only to covering employment protection but also to building on people's ability to remain and progress in work. It is important to maximise job creation and raise productivity by reducing obstacles to setting up new businesses and by promoting better anticipation and management of restructuring.’

2.3

It is useful to recall all these various ingredients of the Task Force's conclusions that were adopted by the Council, as they give a more complete picture of the labour market reforms intended to respond to the revised Lisbon Strategy than does the Commission's Green Paper, which focuses on limited points relating to individual labour law. The fact is, the Green Paper only deals partly with the issues addressed by Kok, and does not consider the issue of the ‘more secure environment’ proposed by the Social Agenda.

2.4

A simplistic approach would risk causing a loss of confidence among the European public, which is already increasingly sceptical towards the Social Agenda. The Commission suggests that it is appropriate to consider the revision of the degree of flexibility provided for in standard contracts (permanent, full-time contracts) as regards notice periods, the costs and procedures for individual or collective dismissals, and the definition of unfair dismissal. These things have historically formed the cornerstone of workers' job security.

2.5

The Committee is concerned about the implication that labour law is currently incompatible with the revised Lisbon Strategy in that it is an obstacle to employment, and that, as things stand, this labour law is not capable of ensuring that businesses and workers have a sufficient degree of adaptability.

2.6

The Committee notes that the strategy set in 2000 has not achieved all its aims. However, it considers that caution should be exercised when analysing the causes of this situation and that an exclusive focus on labour law should be avoided. The revised Lisbon strategy must aim to make Europe more competitive, but also be capable of returning to full employment in a society that is better focused on ensuring a balance between people's work and family lives, better adapted to the career choices they make, investing in people and combating social exclusion. The modernisation of labour law is only one instrument among others to achieve these objectives.

2.7

Therefore, before expressing a view on what direction any undertaking to modernise labour law in Europe should take, the Committee proposes to try to put into perspective a number of comments or initiatives that have come from the Commission itself, such as the report it requested from Professor Supiot, which receives too little mention in this context, or, for example, the conclusions of the EPSCO Council of 30.11.2006 and 1.12.2006 on Decent work for all. The aim of the Supiot report was to carry out a wide-ranging, constructive investigation into the future of employment and labour law in an intercultural, inter-disciplinary Community framework; however, the Green Paper does not appear to have drawn on this report sufficiently.

2.8

What conclusions can be drawn from publicly-available statistics on the performance of the protective framework of labour law whilst keeping in mind the objective of ‘more and better jobs’?

2.9

The Supiot group's final report raised a number of topics that cover the right questions relating to developments in labour relations, i.e. the globalisation of competition and economic activities, the impact of consumers' habits and attitudes, the liberalisation of markets, technological changes, the fact that workers themselves are changing in that they are better educated and skilled, more autonomous and more mobile, more individualistic, not forgetting new business practices in terms of human resource management, remuneration of workers, and requirements for multiple skills or flexibility of working time. The Supiot report touched on the issue of flexibility and security, and also on the very important matter of transitions between jobs, announcing the ‘abandon[ment] of the linear career model’.

2.10

Among the many specific democratic requirements that social law has brought into the socio-economic field, the Supiot group paid attention to four points that lose none of their relevance in the debate opened by the Green Paper (1):

These are:

2.11

The Committee considers that the Commission should draw inspiration from previous requirements when framing the debate about modernising labour law and about the protection normally structured around an employment contract, such as health and safety, occupational accidents, arrangements for working time, paid leave, etc.

2.12

The Green Paper highlights the gulf that exists in most countries between the existing legal and contractual framework and the current realities of the world of work that have come into being in a relatively brief period since the late 1980s/early 1990s. However, at no point is the historical protective and emancipating role of labour law in the broad sense, including that resulting from collective bargaining, with its specificities connected to the cultural, social, economic and legal approaches of the various Member States, mentioned.

2.13

Maintaining a reasonable balance between the parties is not just the job of labour law, but also of social dialogue.

2.14

Any argument that considers protective labour law as an obstacle to growth and employment would be a simplistic vision in which labour law would be reduced to being merely a labour market policy tool or an economic variable.

2.15

Given that an employee is always in a relationship of dependence with his employer, the fundamental protective and emancipating role of labour law must be reaffirmed. Its enforcement should be better guaranteed to avoid pressure on workers and to take into account the new challenges of globalisation and demographic ageing. In this area, there is certainly a role for the European Union vis-à-vis its Member States.

2.16

In 2000, the Commission launched an initiative which aimed to launch discussions about the need to assess the key components of the legal system and collective agreements with a view to ensuring that they allowed for modern organisation but also for improvements in employment relationships.

2.17

This improvement initiative was discontinued, despite the fact that it would seem obvious that it should have been carried through so as to achieve the aim of modernising and improving working conditions, a theme that was taken up years later by the current Commission, from a different angle.

2.18

The Committee must point out a number of significant deficiencies, which significantly undermine the reasoning and perspectives advanced by the Green Paper. It would therefore like to highlight a number of points that it regrets have not been looked at in greater depth or emphasised:

2.19

The Committee believes that the time has come to undertake a comprehensive, rigorous analysis, based primarily:

2.20

The German presidency's agenda, the reappearance of the quality of work at the informal meeting of employment and social affairs ministers in January 2007, and the recent letter from nine employment ministers entitled ‘Enhancing Social Europe’, the annex to which contained, in particular, proposals for employment and flexicurity policies, have opened the way for the in-depth analysis the Committee wants and for the relaunch of the social component of European integration.

3.1.1

Labour law has lost none of its validity as a law that protects both employees and employers; it gives the former an equitable basis for establishing a legally worded employment contract, balancing rights and obligations, taking account of the employers' powers of management and command to which they are subjected; it gives the latter very valuable legal certainty in that the various types of standard contracts are clearly established and their key clauses are fixed or given a framework, including for cases of termination by one side; moreover, in terms of civil liability, for example, labour law also provides workers and employers with guarantees and legal certainty in terms of compensation for and recognition of any incapacity suffered by the employee and of limitation of the employer's non-fault civil liability if safety standards were observed; collective bargaining and consultative institutions contribute to good industrial relations and, if necessary, to the search for appropriate ways of resolving differences.

3.1.2

In terms of changes that are desirable as a matter of priority, it would be appropriate that, with due respect to the laws and practices specific to each Member State, labour law regulates the new flexible forms of contracts that are developing so as to continue, under new conditions, its role of protection and of balancing the working relationship, as well as of ensuring legal certainty for the parties in the event of justified dismissal or of occupational accident or illness; moreover, modern labour law should enable employees to establish rights regarding their career throughout their working lives so that they can alternate lifelong learning, various types of contracts which may at various times meet individual needs regarding work-life balance, promotion or retraining, etc. and enabling employers to achieve long term benefits from the work of satisfied employees.

3.1.3

Labour law reforms must support positive actions in the interest of those most excluded from the labour market. Without creating precarious employment, such reforms must therefore also be instrumental in finding pathways into the labour market, including supporting access to lifelong learning and social economy initiatives providing employment integration.

3.1.4

It would also be appropriate to provide for better regulation of three-way employment relationships in order to specify the rights and obligations of all parties, inter alia in terms of civil or criminal liability; the case of workers who are economically dependent on one principal employer, to whom they are de facto subordinated in terms of how they work, should also enjoy suitable protection, in particular regarding occupational accidents, occupational diseases and social welfare. Any changes to the rules governing this area need, however, to be made with great care, taking into account the specific situation of various economically dependent groups of self-employed workers (e.g. those working in direct sales), to ensure that they are not deprived of their source of income or the opportunity to carry on activities meeting their expectations.

3.1.5

In addition, the fight against undeclared work and the legal formalisation of employment relationships are essential; it would be desirable to step up employment inspections, both with this in mind and more generally so as to ensure the effectiveness of the applicable legal or contractual provisions.

3.1.6

ILO Recommendation 198 on the employment relationship, adopted by the International Labour Conference in June 2006, provides a solid underpinning for the Member States in adapting labour law to the technological, economic and social developments that have been making profound changes to production, services and world trade for over two decades (3).

3.2.1

Experience shows that without relevant regulation, an increase in flexible contracts increases the segmentation of the market and increases insecurity, for example in terms of lower incomes in the most common (part-time) contracts, which do not make it possible to meet basic needs satisfactorily, and in terms of less social welfare (thresholds of access to unemployment benefits, to a supplementary pension, to lifelong learning). The length of the working day should also be taken into account, because if part- or full-time work is spread out over the day, workers cannot in practice use the time when they are not working for the pursuit of their personal interests.

3.2.2

Experience also shows that the most common flexible contracts (fixed-term and part-time contracts) are often offered to people who would prefer a full-time job. While these contracts can be a good starting point for the further working life of young people and an excellent opportunity for reconciling work and family life, or work and study, they are not always voluntarily chosen. Older workers have difficulty finding jobs, even temporary ones. The fragmentation of the market is not the workers' fault; it results from choices made by employers who ultimately decide unilaterally what kind of contract they want to offer. Labour law must seek to stop discrimination against young people, women and older workers in terms of access to the labour market and of pay.

3.2.3

If flexibility is to be a choice rather than a means of discrimination, providing greater security, giving workers the opportunity to organise their lives independently (young people on short-term contracts forced to live with their parents because housing is too expensive, one-parent families where the parent, not by choice, has a part-time contract, often leading him or her to join the ranks of the working poor), then sweeping reforms of labour law are needed in the direction set out in the answer to the first question, preferably by means of social, tripartite or bipartite dialogue depending on the country and at the appropriate level.

3.3.1

The Committee cannot answer on behalf of the 27 Member States. However, it does have some specific comments to make; the best way to compete is to keep innovating or to play the quality card.

3.3.2

The real factors in productivity are the workers' skills and thus their training and experience, and the introduction of new technologies, which depends on investment in education and training and in research and development, both public and private (it is primarily the latter that is lacking in Europe).

3.3.3

Regulation (whether legal or contractual, as a framework for action on training by the social partners) must therefore be aimed at continuing education and training and adjusting to the introduction of new technologies at work or during people's careers, and be applied fairly to all categories of employees; businesses that seek to build and maintain skills will have to make joint efforts with the public authorities or relevant institutions. Business will get a competitive advantage in return and employees will benefit from increased employability; legislation can encourage the improvement of skills and qualifications by organising or facilitating funding, training structures, by specifying rights to and incentives for training (training leave, time accounts) throughout the career (through successive contracts and employers), according to the laws and practices in force or to be put in place, and collective bargaining (4).

3.3.4

Pooling of education and training efforts can be encouraged by legislation and local financing for SMEs, for example, in order to share the costs over a geographical area, given that very small businesses and the self-employed cannot themselves organise and finance training of any duration, apart from the acquisition of on-the-job experience.

3.3.5

Labour law in the broad sense can, however, deal only with a limited part (lifelong learning, involvement of workers) of the factors needed to deal with new technologies and to adapt to industrial and social changes; higher education, research, venture capital, start-up incubators and innovation poles also have their role to play as part of a competitive and coordinated industrial policy at regional, national and European level.

3.4.1

It is difficult to accept such an approach if flexibility means more, less secure job types. According to the definition, flexicurity provides the opportunity to combine different forms of labour market flexibility with security, in order to provide a balanced approach to enhancing workers' and firms' ability to adapt, while protecting them from risk. Consequently, flexicurity is more than just a balance between external flexibility and social security systems. The more flexible the contract is, the less job security one has, and the stronger the protection needs to be (social protection, secure careers or security of employment throughout the career) (5).

3.4.2

The question implies that flexibility creates jobs; there is no demonstration nor evidence to back up this assertion. Security has more to do with social legislation, which is not covered by the Green Paper.

3.5.1

Truly well-designed support for the unemployed must, in any event and whatever the level of employment ‘protection’, include worthwhile training or credible retraining. Moreover, it means tailored support for enterprises which are ready to employ people at the margins of the labour market (long-term unemployed, etc). An ‘active labour market policy’ does not mean compulsory acceptance of any job that is offered, even a less skilled or less well-paid one, on pain of complete loss of benefits.

3.5.2

Solutions vary from country to country depending on history, the role of collective bargaining, and the social situation. Subsidiarity has an important role to play in the area of labour law, including in the implementation of European directives, whether they are the result of a European framework agreement or an EU initiative. To be sure, the Community level must also take its responsibilities, encourage negotiation, submit concrete proposals within its areas of competence, and must not confuse ‘better legislation’ with ‘deregulation’.

3.6.1

It is essential to have solid and sustainable standards to provide for lifelong learning and transitions between jobs; the relative importance of legislation and collective agreements will vary according to the models that exist in countries where legislative and social conditions, the strength of representative organisations, and traditions and customs differ, depending on the social history and the means of ensuring that compromises accepted by the social partners are kept to for the very long term. This brings us back to the creation of genuine statutory protection of employees.

3.6.2

The system that needs to be set up involves employment contracts and needs to be implemented in institutions that provide support for transitions, financial support (the forms of financing to be negotiated or discussed) and public, collective or cooperative training establishments, or on-the-job training (learning company) with recognition of the qualifications thus acquired.

3.6.3

It is in this area that labour law could make an effective contribution to the Lisbon objectives, both in the area of the knowledge society and in that of security that enables people to organise their lives and plan for the future, which in turn makes a direct contribution to productivity and the quality of work.

3.7.1

To be sure, a debate could be held on this matter, on the basis of sufficiently in-depth comparative studies, but this question seems largely theoretical, to the extent that the harmonisation of labour law or of social protection are not on the agenda; the national definitions and the corresponding case law are working, and it would seem more appropriate to leave them in place, as there is a clear distinction between labour law and civil (commercial) law.

3.8.1

This all depends on what is included in this ‘floor of rights dealing with […] working conditions’. If we are talking about such things as working time, flexible working, and pay, these are determined by the type of contract and the legally applicable general conditions.

3.8.2

If we are talking about rights of participation, fundamental freedoms, the principle of equality and non-discrimination, the right to protection against the unforeseen — accidents, sickness, unemployment, etc. — these are obviously independent of the employment contract; they are fundamental rights. It would be completely unacceptable to propose that they be described as ‘minimum requirements’ or to envisage their ‘flexibility’.

3.9.1

Labour law is based on public social policy, which is binding on all parties. Principals must have some power to monitor or supervise their sub-contractors and must take the precaution of enshrining certain principles (compliance with applicable social and technical standards) in contracts, if they do not want to be unwilling accomplices to violations of labour law or other national standards applicable to building sites or workplaces.

3.9.2

Joint responsibility, with provision for principals to take action against defaulting sub-contractors, seems to be the solution that would best protect the rights of workers, who may find it very difficult to defend themselves if the headquarters of the sub-contractor is in another country, possibly outside the EU, while they are working on a building site managed by the principal. This rule establishing joint responsibility for working conditions and for guaranteeing the payment of salaries should apply whether the principal is a private or public entity or a mixture of the two.

3.9.3

The protection of employees working abroad must be improved. Non-national sub-contractors should make contributions to funds or institutions that guarantee the payment of money owed to employees if the employer becomes insolvent; legal provision should also be made in the Member States for compensation for possible repatriation to be included among the principal's obligations in the event of its sub-contractor becoming insolvent.

3.9.4

One of the problems of three-or-more-way employment relationships lies in the increased risk, for employees/workers, of failure of one of the links in the chain and of dilution of responsibilities. In the case of non-national sub-contractors' employees, only joint responsibility between the principal on the one hand and any and all of its sub-contractors on the other, supported by the legal rules, provides protection that is sufficiently complete to ensure that rights are respected and wages and social security contributions are paid. Appropriate national guarantee systems, based on the directive on the protection of employees in the event of the insolvency of their employer, should be sufficiently effective and even extended to companies in other countries if their national guarantee system is insufficient or non-existent, in which case the joint responsibility of principals would be proportionately reduced. In addition, national legal systems must provide for a mechanism to allow the use of a proportion of payments from principals to foreign sub-contractors to contribute to a mechanism guaranteeing the latter's outstanding financial obligations towards their employees in the event of their employer becoming insolvent (6).

3.10.1

The absence of a Community legal framework is creating the risk of abuses such as evading legislation on temporary secondment. It would be useful to look actively for a consensus in the Council, which would enable regulation of the activities of temporary worker agencies at European level.

3.11.1

The 1993 directive that is currently in force, subject to the inclusion of case law established by the Court, offers a protective framework that can be improved, complemented or developed at national level as necessary, inter alia through collective bargaining at various levels.

3.11.2

The question implicitly recognises the link between the duration/length of working time and the risks of accidents or detriment to health; there is indeed such a link, and reducing actual working time could, over a longer period, improve workers' health, mainly by reducing stress and permanent fatigue, and at the same time also facilitate the creation of new jobs.

3.12.1

See answer to question 1 and ILO recommendation 198; due to current variations, the definition should remain within the competence of the Member States, as it affects not only employment contracts, but the application of social legislation (definition of beneficiaries, conditions for accessing benefits).

3.12.2

There does not seem to be any real problem caused by European directives, which define the persons concerned according to the nature of the legislation; an in-depth study of this matter would certainly be necessary before any changes, if necessary, were considered.

3.13.1

The role of the social partners is indispensable, in the context of social dialogue and in the spirit of the treaties and the Charter, in looking at the implementation of and compliance with Community labour law.

3.14.1

The role of Eurostat should be developed so that the phenomena operating in the various countries can be properly understood; it appears that the role of informal or undeclared work in forming national GDP is underestimated; if the causes of this are more attributable to specific national situations, as some studies indicate, then action by Member States themselves should be strongly supported and encouraged.

3.14.2

Nonetheless, since little is known about these phenomena, it would be useful to clarify the links between these types of work and counterfeiting, the significance of criminal networks in undeclared work and links with illegal immigration, which could justify greater judicial cooperation within the Union, and an increased role for the EU, insofar as these forms or work also have an impact on the internal market and competition.

3.14.3

The social partners have an important role to play in combating undeclared work and in reducing the informal economy. Action should be taken at EU level to encourage the social partners in Member States to launch national and sectoral projects among themselves and in cooperation with the authorities to resolve these problems. The social partners could work together at EU level to analyse and publicise good practices in Member States.

3.14.4

The fight against undeclared work calls for effective cross-border cooperation and surveillance by Member State authorities and dissemination of information on the sanctions arising from performing undeclared work or making use of undeclared work.