- Flexicurity - INTENSIVE PROGRAMME IMPLEMENTATION OF LISBON STRATEGY KAUNAS. Oulu University of Applied Sciences, Finland

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1 - Flexicurity - INTENSIVE PROGRAMME IMPLEMENTATION OF LISBON STRATEGY KAUNAS Arto Kallunki Arianna Giovannardi Judith Moosmann Alexandre Casadevall Portas Derrick Sweers Raimonda Karanauskyte Nouschka van Uffelen Oulu University of Applied Sciences, Finland University of Bologna, Italy Nuertingen-Geislingen University, Germany University of Girona, Spain Plantijn University College, Belgium Kaunas College Lithunia Juridische hogeschool Avans, Netherlands 1

2 Tableofcontent 1. Introduction What is flexicurity? The unemployment rate Level of flexibility Structural flexibility Hiring Dismissal Level of forewarning Employability Contract drafting The consequences of the Lisbon Strategy for the similarities in contracts Modern social security system Unemployment benefits Social security depending on the types of contracts Pension funds Comprehensive Lifelong learning University education Education for employed people Education for unemployed people Effective active labour market policies Public job agencies Efficient public job agencies Euro per hour jobs Three times policy Special categories of unemployed people Otherlabourmarketagents:temporaryjobagenciesandoutplacementagencies Conclusions and recommandations Bibliography

3 1. Introduction. We are seven students from different countries: Lithunia, Spain, Italy, Finland, Germany, BelgiumandtheNetherlands. We are participating in this international project called Implementation on the Labour MarketoftheLisbonStrategy heldwiththesupportofthellp ErasmusIPProgrammeof theeuropeanunion. In2000theEuropeanCouncildevelopedtheLisbonStrategy,whichcontainstheconceptof flexicurity, to transform the European Union into the most competitive and dynamic knowledge based economy in the world, capable of sustainable growth with more and betterjobsandgreatsocialcohesion,andrespectfortheenvironmentby2010.toadvance abettereconomygrowthandmoreandbetterjobs,theideaofflexicurityisveryimportant. We think flexicurity is a very interesting topic for the labour market, because of its importanceintotheworkingsystemofnowadays:itcanrepresentasolutiontotheneedfor businesses to reach a certain flexibility in hiring and dismissing people, and, in the same time,theneedofprotectionoftheworkforceduringtheperiodsoftransitionfromajobto another. Thepurposeofthisworkistoanalyzetheconceptofflexicurityundermanypointsofview, startingwiththeexplanationofthemeaningofthisnewword,createdbyacombinationof thewordsflexibilityandsecurity.then,thispaperwilldealwiththepolicieswhichcanhelp toachieveflexicurity: Flexibleandreliablecontractualarrangement Modernsocialsecuritysystem Comprehensivelifelonglearning Effectiveactivelabourmarketpolicies Thisworkhasbeendevelopedcomparingthedifferentnationalsystemswebelongto,so eachreferencetothe MemberStates or Countries presentinthispaperwillonly concernthecountrieswhicharerepresentedinthisprogramme:belgium,finland, Germany,Italy,Lithuania,theNetherlandsandSpain. Afterhavingdiscussedalltheseissues,wereachedaseriesofconclusionsand 3

4 recommendations:memberstatesshouldmovethebalancetomoreflexibilityfor companiesandprotectionforindividuals.becauseofthequickchangesinlabourmarketand intechnologyitisnomorepossibletothinkatthefirstjobagreementasanimmediateopen endedcontract.thatisthereasonwhywethinkthatjobsecurity(thesigningofasureopen endedcontract)hastobereplacedwithworksecurity(inthetransitfromajobtotheother) whichisalsoapointofthelisbonstrategie. Thispaperistheresultofinvestigationsanddiscussionsheldbythemembersofthisteam, inlithuaniaandduringthehomepapers,inthecommonefforttoreachglobalconclusions andsuggestionstotheeuropeancommission. 2. Whatisflexicurity? Flexicurity is a well known term in the European Community. It is a combination of the wordssecurityandflexibility.thetermwasfirstusedindenmark(bytheprimeminsterpoul NyrupRasmussen)inthe'90sasananswerforthedilemmaofhowtomaintainandimprove competitivenesswhilstpreservingthesocialmodel. The main idea of flexicurity is to provide flexible job arrangements and secure transitions between jobs. The Danish government developed a system which was capable of strengtheningthelaborflexibilityandmaintainemploymentandsocialsecurity,andwhichis basedoneasyhiringandfiringwhilemaintainingahighsocialsecurityandaskinganactive participationtoemploymentprograms.thissocialsecuritymodelhadpositiveresults,soit began to be seen as a welfare model for the whole European Union: many European Countries started considering it as a good example of a well working social security policy andasamodelwhichcouldspreadallovertheeuropeanunion. The flexicurity concept expresses the change from a job security mentality to an employmentoremployabilitysecuritymentality.itisapolicyapproachgearedlesstowards the protection of jobs, and more towards the protection of people. Encouraging flexible labourmarketsandensuringhighlevelsofsecuritywillonlybeeffectiveifworkersaregiven themeanstoadapttochange,tostayonthejobmarketandmakeprogressintheirworking life.forthisreason,theflexicuritymodelalsoincludesastrongemphasisonactivelabour marketpolicies,andmotivatinglivelonglearningandtraining,improvingcustomizedsupport tojobseekers,supportingequalopportunitiesforallandequitybetweenwomenandmen. Infactofthechangingworldeconomy,theprocessofglobalizationandrapidtechnological 4

5 developmentsjobschangemorequicklythanbefore.enterpriseshavetomasternewskills andproductiontechniques.thisprocessaffectsemployersandworkersalike.theabilityto adapt to economic changes becomes more and more important for enterprises. The difficulty is to afford flexibility gains for employers without accepting a loss of security for the employees. Similarly, security gains for employees shall not go along with flexibility lossesforemployers. 3. Theunemploymentrate. Beforeanalyzingalltheaspectsconcerningflexicurity,itisreallyimportanttogivealookto theunemploymentratepresentinthedifferentmemberstates. Theconceptofflexicurityisreallyboundedtotheemployabilityofpeoplewhichareoutof thelabourmarketforacertainperiodoftime. Purposeoftheflexicurityconceptis,infact,tocombineproperlytheflexibilityofthework relationships in a labour market with a high level of social security to be guaranteed to unemployedpeople. Thenowadaylabourmarketneedsmoreandmorethecompetitivityofthecompaniesinthe global economic world, also using the means of flexibility; while the workforce needs protectionsagainstanindiscriminatinguseoftheflexibilitypolicies. TheschemesbelowsshowthedifferentunemploymentrateintheMemberStates: SourceoftheGraph: ec.europa.eu/eurostat/ 5

6 SEASONALLY ADJUSTED UNEMPLOYMENT RATES (%) TOTALS IN JANUARI 2009 EA EU EA BE 7.2 BG 5.3 CZ 5.0 DK 4.3 DE 7.3 EE 8.6 IE 8.8 EL4 : ES 14.8 FR 8.3 IT4 6.7 CY 4.3 LV 12.3 LT 9.8 LU 5.1 HU 8.6 MT 6.0 NL 2.8 AT 4.0 PL 6.7 PT 8.1 RO4 : SI 4.9 SK 9.8 FI 6.6 SE5 7.4 UK : NO : US 7.6 JP : 6

7 4. Levelofflexibility FlexibleworkarrangementshavebecomestandardfeaturesintheEuropeanlabor market.theirpresencereflectschanginglifestylesandinnovationandtheir significanceisgrowingandthereforeareessentialforthecommercesector. Flexibilityhasoftenbeencriticizedforbeingawayoutofworkers interestsandsocial protection.intheglobaleconomycomesouttheneedoftheemployerstohavethebest staffavailableintheircompaniesandtohavetheopportunitytohireanddismisspeople easily,accordingtotheneedsofthebusiness. Itisimportantforeacheconomicsectortohaveflexiblecontracts.However,thisflexibility hastobecombinedwiththeneedofprotectionandemployabilityoftheworkers. Whenmeasuringthegenerallevelofflexibilityinacompany,themostcommonfactorsthat arediscussedare1)internal&functionalflexibility(possibilitiestorearrangejobs),2)ease ofhiringpeopleforlimitedduration,3)easeofdismissal,4)limitationstofixed termhiring andthelevelofflexibilityindraftingorchangingworkingcontractsandtheirlimitations. 4.1 Structuralflexibility Internalflexibility,whichformostpeoplemeansworkinglessforlessmoney,isarranged differentlydependingonthecountry.toillustratetwodifferentsystems,ifanelderlyman wantstoworkfourdaysinsteadoffive,inbelgiumthestatepaysthedifferencebetweenold andnew(diminished)salarybutinfinlandthereisnocompensationfromthestate.the internalflexibilityisnotusualintheparticipatingcountries,butitdoeshappenbecause therearepeoplewishingtochangetheirjoborbecauseitwillbebetterforthecompany. Mostpeopleliketohaveastablelifeandstayinthesamejob.InItalyitspossibletochange jobinsidethesamebusiness,butthejobhastobeatthesamelevel.alsochangingtheplace it squiteflexible,buttheemployeemustagreewiththat. Ingeneralthestructuralflexibility(theabilitytochangeone sjobpositioninthecompany)is 7

8 notveryhighintheparticipantcountries,butitoccurs.itdependsonthelaborlawand possibleadditionalarrangementsbetweensocialpartners. 4.2 Hiring Theeaseforhiringpeopletofixed termcontractsisoneofthecoreideasinflexicurity.in general,everymemberstatehassetlimitationstosimplyhiringpeoplewithoutreasons. Mostcountrieshaveproblemswiththelegistlationconcerningemploymentinthisregard; theycanhaveoverhalfoftheiremployedpopulationonpart time(limited)contractslike GermanyorproblemswithblacklaboroveroverprotectivelegistlationlikeinSpainorItaly. ThemaintoolforemployeesinMemberStatestopractiseflexibilityisthroughdifferent kindsofemploymentcontracts.inmostcountriescreatingthisregulationoftemporary hiringwasintededtoencourageemploymentbutdoesn tworkthesupposedwaysinceitis oftenlackingagreement.themostflexibletypesofcontractspresentinmemberstatesare on calllaborcontracts,part timecontracts,freelanceandcontractorcontractsandgeneral temporaryworkingagreements. Theeaseofdismissalistheotherimportantpartofemploymentflexibilityinthesensethat itallowstheemployertoretaingoodprofitability,adapttoeconomicchangeandencourage hiringorre hiringpeopleinbettereconomicaltimes.inpractiseallparticipantcountries haveheavyregulatedagainstemployeedismissal.fromthegroup sdiscussion,itbecame clearthatinallparticipantcountriesageneralminimumtimeofforewarningisrequiredfor boththeemployeeandtheemployerbasedonthenatureofworkandthelenghtofthe contract.inthetablebelow,thegrouphaslistedsomekeyfactorsofcontractualflexibility andtheirstatusintheip Flexemcountries. 8

9 Table1.Levelofflexibility Country Forewarning Functional flexibility Internal flexibility Laborlaw&additional agreements Germany Yes Weak Weak Strongadditionalcontracts Italy Yes Weak Weak Strongadditionalcontracts Spain Yes Weak Weak Strongadditionalcontracts Netherlands Yes Strong Strong Limitedadditionalcontracts Belgium Yes Limited Strong Strongadditionalcontracts Finland Yes Strong Strong Strongadditionalcontracts Lithuania Yes Strong Weak Limitedadditionalcontracts 4.3 Dismissal Itisimportanttohaveastablejob,especiallyintheeconomiccrisis,becauseyouwantto haveagoodqualityoflifeandtotakecareofyourselfandothers.internalandexternal flexibilityandgooddismissalprotectionarealsoveryimportantinthistime.thelegal dismissalprotection regulationarestronglydevelopedinallcountries,. ForexampleintheNetherlandstheydontlookatwhatyoucan tbuttheylookatwhatyou can,sothey lllookforasolutionbeforethey llfiresomeone.belgium,germanyandthe Netherlandhavethemostagreementsaboutdismissal.Inallthesevencountriesthe employercanonlyfiresomeonewithoutanyconsequenties,whenyouhaveagoodreason fordoingthis.forexampleeconomicreasonsorwhensomebodyhasstolesomething.the protectionforpregnant womenisveryhigh,inallthesevencountriesisitnotpossibleto fireawomanwhoispregnantevenwhensheisnotinthecompanyforexampleoneortwo years. IneverycountythedismissalprotectionhasbeengoodregularInthelaw.Theemployerand theemployeehasagoodprotection.allemployeesarethesame,butinitalytheprotection againgstwrongfuldismissedishigherforemployeesofbusinesswithmorethen15 employees. 9

10 ThebiggestprobleminthewayofdismissalisinSpain.InSpainthemostoftheemployees hasalimitedduractioncontract,andifthelimitisreached,mostoftheemployeeswillbe fired.inspaintheyalsocanhireanddismissalemployeesdependingontheeconomicneeds ofeachmoment. Itsgoodthatnobodywho silljustcan tgetdismissed,becauseifanemployeejustcanget dismissedthentherewillbetomuchunemployentwhatwillleadintomuchcostsforsocial security,what snotgoodforoureconomy Level of forewarning Ifanemployeewantstoquithisjob,thelevelofforewarningisverydifferentineach country,forexampleinlithuniawhere,iftheemployeedoesnotworkforthreemonthsin thejob,whenheisleavinghemustalerttheemployeebefore3days.theemployeewishing toleavefromworkmustwritearequest2weeksbeforeleaving.thatsabigdifference comparedtobelgium,becauseinbelgiumit spossiblethattheemployeehastoworkfora halfyearafterhe/shequittedthejob.toprovideamoreextensiveexampleofcumulative forewarning,wearegoingtotakealookonthefinnishwaytocalculateforewarningtime: Table2.Finnishcumulativeforewarningtime Timespentworking 1orless over12 (years) Forewarningtime 14days 30days 2months 4months 6months Employability Theemployabilityofpeopleshouldalsobetakenintoaccount.Themainmeterforreemployabilityisseentobetheperson sageandsocialstatus.inmostcountriesemployees withfamilyandolderpeoplearefavoredoveryoungsingles.thismaterializesindifferent ways;initalyandspainyoungpeoplecannotfindunlimitedcontractsbecauseofstuctural reasons,inothersitisbecausethelawmakesiteasierforemployerstodismisssaidpeople beforeemployeesthatarenotasflexible.inallcountriesthereexistsanemployment schemeforemployingpeoplewhoaresomehowchallengedinobtainingwork,e.g.old 10

11 peopleordisabledpeople.anincentiveforhiringsomepersonslikethiscanbeastate given benefitorasubsidyfortheemployer.belowisalistingofsomeofthefactorsthataffect flexibleandreliablecontractualarrangements. Table 3. Factors affecting dismissed workers Country Dismissal Employment Unemployment Employment agencies protection subsidies subsidies Germany Strong Yes Yes State&local Italy Strong No Yes State&private Spain Strong Yes Yes Public&private Netherlands Limited Yes Yes Local Belgium Strong Yes Yes State&local Finland Strong Yes Yes State&private Lithuania Limited Yes Yes State&private 4.4 Contract drafting Anotherkeyindexforgenerallevelofflexibilityisthedraftingprocessofacontractand limitationsimposedtoitbydifferentlawsandregulations.ingeneral,acontractcannotbe oflimiteddurationwithoutgrounds.ontopofgenerallaborlaw,countriesusuallyhave addedagreementsbetweensocialpartners.forexample,infinlandthemostimportant practicalagreementcontrollingaperson sworkingconditionistheworkingconditions Contractthatissignedbetweenrepresentativesofemployers andemployees unions. 4.5 TheconsequencesoftheLisbonStrategyforthesimilaritiesin contracts Therearetwomaintypesofcontractsthatcanbefoundineverymemberstate: employmentcontractsandotherlegalcontractsthatrequirework,likecommission contractsandmaterialworkcontracts.inpracticetheborderbetweenthesetwotypesis muddleddependingonthememberstate.inspainacontracttodosomethingconcrete translatesintoallowingforan(temporary)employment,infinlanditconstitutesa commission. 11

12 Discussingaboutcontractsinourgroupitcameoutthatgenerallythereareseveraltypesof flexiblecontractswhichareusedinallthememberstates,likejob sharing,job on call,parttimecontracts,agencywork, lavoroaprogetto (Italiantypeofflexiblecontractinwhich thepartsagreeaboutaprogramorprojectwhichhastobedevelopedduringthe employment.itischaracterizedbythefactthattheemployeeremainsautonomousfrom whatdoesnotconcerntheproject,e.g.theworkinghourscanbenegotiated).thesekindsof contractshavebeencreatedtoeasethecompanies competitivenessintheglobalmarket, becausetheseagreementsallowthemmoreflexibilityintheworkrelationshipswith employeesaccordingtothecompanies needsatagiventime. Theseflexiblecontractsmaybeusefulforenterprisesbecauseoftheshortperiodoftime theytake,sothecompaniesdon talwayshavetousethemeansofdismissal.forwhat concernsopen endedcontracts,everycountryprovidesprotectionagainstwrongful dismissalduringvariousleaveschemes.employeescannotbedismissedwhentheyareon specialleaveschemeslikematernityorsicknessleaveorwithoutagoodreason. Implementinganeasierwayforcompaniestosignemploymentcontractsandsecuringthe ruleoflawinjobmarketsisseenasaveryimportantfunctionoflisbonstrategy.succeeding inthiswouldcombatblackwork,whichisthesinglemostimportantsourcesofproblemin ItalyandSpain,twoveryimportantEUMemberStates,bymakingiteasierforpeopletobe hiredforshortperiods.itwouldlessentheburdenofpublicadministrationbyreducingthe amountofunnecessarypaperworkthattheemployersmustsubmittopublicauthorities. Mostimportantly,itwouldhelptocreatenewjobsbymakingiteasierforcompaniesand organizationstohirepeople. ItisimportanttonoticethatindividualMemberStateshavetriedtoimplementeasierand morereliablecontractualpracticeslongbeforetheconceptoflisbonstrategy(forexample SpainwithLey32/1984)andsometimeshaveveryeasyandflexiblelaborregulationslike GermanyandtheNetherlands.Ensuringamoreflexibleandreliabecontractstructurewould requirelargechangesinthelegalstructure,especiallyemployeeprotection.basedon groupdiscussionweknowofatleastthreeseparateprogramsthatwerebasedonthe principlesoflisbonstrategy(italiandecreeno.276,ley43/2006inspain,workcontract Law55inFinland).Additionallytherehavebeenmanysmaller/regionalreformprograms aimingateasingthecontractlawandencouragingtheemploymentofwomenandelderlyin everymemberstatesincethelisbonstrategywasfirstpublishedin2000.progressalongthe 12

13 guidelinesoflisbonstrategyhasthereforetakenplace,albeitonalimitedscale. However,implementingtheflexicurityofemploymentalonewoulddoverylittleto encourageanything,sincee.g.thegermanlaborlawisveryflexiblebutexcludesthesecurity oftransitionalperiods,especiallywithtemporaryjobs.intheindividualhomepapersandin thegroupdiscussionitbecameevidentthatinthecountriesthatdonothaveflexibilityalso havesocialissuesthatpreventthisfromhappening(needtoestablishapermanentjob, politicalpressuretonottoincreasetaxes).theseissuesmustbeaddressedfirstbefore developmentalongthelisbonstrategyguidelinesispossible. 5. Modernsocialsecuritysystem Inordertoadapttotheconstanteconomicalchanges,wehavealreadyseenthatemployers must be able to fire and dismiss workers easily. However, this flexibility cannot mean sacrificing employees' rights. The implementation of flexicurity requires modern social security systems that provide workers enough to live on while being unemployed. In the European Commission s opinion, a modern social security systems should offer adequate unemploymentbenefitsandaswellactivelabourmarketpolicies.thisisessentialtoprovide incomesecurityandsupportduringjobchanges. 5.1 Unemploymentbenefits Themajorpartofthesocialsecurityisprobablytheallowanceforunemployedpeople.<In every Member State people can acquire entitlements for unemployment benefits. High unemploymentbenefitsoperateasasafetynetforworkerswhentheyhavenojobandare necessary to establish flexicurity. A system based in employment security rather than job securityhasagreatturnoverandthereforeworkersmustreceiveenoughmoneytoliveon during the periods of unemployment. They will only accept the high probability of losing their job if they must not face unemployment as a period of scarceness. For example, although in most studied Member States unemployment benefits are high enough, in 13

14 Lithuaniapeoplefeeltheydonotreceiveenoughwhenbeingunemployed,sotheyaremuch morehostiletoliberalizethedismissalconditions. Despite their importance, high unemployment benefits can also have a negative effect on theactivitiesofjobseekerssincetheymayreducefinancialincentivestoacceptwork,such asithappensinspainoritaly.inordertosolvethisnegativeeffectofhighunemployment benefitswemightconsiderthepossibilityofaprogressivereductionofthesebenefits.this policy, which is being already applied in many States, is based that the longer a worker needs to find a new job, the lower unemployment benefits will be. In Spain, for example, unemployed people will receive during the first 180 days 70% of their previous salary and after that only 60% of it, until these benefits are over. We think that this idea should be emphasized and reach a more progressive decreasing unemployment benefits system, whichisgoingtobedoneinthenetherlands.here,theyalsohavetheproposalofprivatizing somehowthesocialsecuritysystem:theemployerwhofirestheworkerwillhavetopayhis unemployment benefits for the first 6 months, so he will be very interested in the reintegration in the labour market of this worker, and will participate actively. This social security system would not focus only at guaranteeing an income, it would also help to activatetheunemployedpersons Socialsecuritydependingonthetypesofcontracts. In fact of the increasing amount of flexible and atypical employment, the social security systems should be adapted to each of the new contract types. This would require for example the possibility for temporary workers to transfer their entitlements across companiesandbranches,whichwouldbeveryimportantbecauseinmanymemberstates, for example Germany, the social security system is mostly designed for open ended contracts,sothereisalackofprotectionofworkerswithfixedtermoratypicalcontracts.a possiblesolutionmightbethatemployersmustpayafixedmonthlysumintoeachworker's account from which employees may draw when being dismissed, so their benefits will not dependonthelengthoftheemploymentrelationshipandtypeofcontractandatthesame time they will not put off changing jobs. At the same time, it implies lower costs for the 1 Joep Timmermans lecture 14

15 State,becausethemoneygoesdirectlyfromemployertoemployee.However,wethinkthat although this is a good idea, there should also exist a public system to provide unemployment benefits in case workers ran out of money in their accounts due to long unemployment. 5.3 Pensionfunds Anotherpillarofsocialsecurityarethepensionfunds.Thereare2differenttypesofpension funds,namelytheprivatepensionfundsandthepublicpensionfunds. The public pension funds are managed by the government and are financed by the contributionsoftheworkingpeople.thissystemisbasedonsolidaritybetweentheworkers andthenon workers. The private pension funds are based on the idea of saving money for the time after the retirement.nowadaysnearlyeverybankoffersprogramsforretirementprovisionwhichare essentialintimeswhenthegovernmentalretirementbenefitsareinsecure.becauseofthe topicpensionsystemswearenotgoingtodiscussthistopicintodetail. During our discussions it turned out that all Member States have a well developed social security system to provide an income to people. There is still work to be done by the Governments though. They should focus on adapting the social security systems to the increasing level of flexibility on the labour market. The access to social security has to be granted to everyone, independently of the type of employment. However the unemploymentbenefitscanhave,aswealreadysaid,anegativeeffectonthereintegration of unemployed people into the labour market. Member States must therefore develop together with these benefits active labour market policies (for example, people have to register themselves at the governmental job agencies when asking for unemployment benefits) and lifelong learning programs to promote unemployed workers reentrance into labourmarket,whichwillbestudiedinthefollowingpages. 15

16 6. ComprehensiveLifelonglearning AccordingtotheEuropeanCommission LifelonglearningisaboutensuringthatEUcitizens havetheopportunitytohaveahighqualityinitialeducation,thattheycompleteatleasttheir secondaryeducation,thattheydevelopabroadrangeofkeyskillsandthattheyacquirenew skillsandupgradeexistingskillsthroughouttheirworkinglives.itisalsoaboutensuringthat enterprisesinvestmoreinhumancapitalandallowemployeestodeveloptheirskills. 2 Lifelonglearningisimportantforanyonewhoisenteringorisalreadyinthelabourmarket. This importance is even higher nowadays because of the need of specialized people, specially in the service sector, but also in any other economic sectors(for example, in the industrialsectorduetotheuseofmachinesandtechnologicalsystems).infact,wecansay that flexicurity requires high qualified people who are able to adapt their skills to what economy needs every moment. Lifelong learning is an idea based in the current situation: duetoconstanteconomicalchangesandthehighcompetitionexistinginthelabourmarket, schooleducationisnotenough,workersmustreeducatethemselvesalongalltheirlifetobe abletooffertherequiredskillsandperformanceandincreasetheiremployability. 6.1 Universityeducation. Inuniversitypeoplegainpeculiarskillssuitablefordeterminedsectorsofthelabourmarket whichrequireahighqualificationlevel.comparingthedifferentsystemsitemergedthatin every Member State represented in this project, universities play a vital role not only in people s knowledge but also in the economic system because no improvement can be reachedwithouthighqualification.asaresultofthisimportanceuniversityeducationshall be granted to everyone and most of European countries have public university systems. AlthoughitistruethatthestudentshavetopaytuitionfeesinnearlyeveryMemberState 2 EUROPEAN COMMISSION. Towards Common Principles of Flexicurity: More and better jobs through flexibility and security. July

17 (exceptfromfinlandandseveralgermany sländer),thestatesoftenpayanimportantpart ofuniversitytaxes.forexample,inspainandgermanytheyarepaidforeverybodywhereas in Italy only to those students who can not afford it. We must also mention that many Member States have implemented special governmental loans for students as well as a systemofgrantsbothtostudentswithbestmarksandtothosewithsomekindofspecial needorthatcannotafforduniversitystudies. However, university education needs a great amount of funds to be carried on and grant high quality services to the students. An economic participation of businesses could solve theseproblemsandtherearemanypeoplewhoclaimthatprivatecompaniesshouldhavea higher participation in university formation. In fact this idea is being applied in public universities in some countries such as Germany or Italy. In the first one there is a combinationofpublicandprivateeducationinthesocalled Berufsakademie (universityof cooperativeeducation),whicharegovernmentaluniversitiesbutthestudents feesarepaid byaprivateemployerwiththeconditionthatthestudentsworkforthemduringandafter theirstudies.initaly,adecreewasapprovedin2008whichletspublicuniversitiesbecome privatefoundationsandmanagingthemselveslikecompanies. We discussed if this movement towards a more privatized university system should be acceptedcomparingourexperiencesandwecametothecommonthoughtthatthisideacan notbeshared:universityeducationshouldbepublic,foreveryoneandnotinfluencedbythe interestsofprivatecompanies.universitymustbelinkedtothelabourmarketandprovide new generations of efficient and reliable professional, but an active participation of businesses in university means that they will not only be interested in people s education but also in making economical profit, and that is a menace to many important university studies (for example philosophy or philology) and to the cathedras freedom there has alwaysbeen. An alternative solution to the high cost of university studies may be raising taxes to companies,soinsteadofallowingthemtoinvestinuniversitiesandhaveahugeinfluencein them,enforcethemtomaintainasystemwhichisvitalnotonlyforthembutalsoforallthe society. 17

18 6.2 Educationforemployedpeople. To embrace the increasing competition on the labour market further education is very important. Even if someone already has an employment education is necessary to handle theongoingtechnicalprogress.foremployedpeoplethetrainingprogramsareoftenpaid andorganizedbytheemployer(oremployersassociations),althoughinsomecountrieslike Spainspecialcoursesareofferedbyemploymentpublicservicestoemployedpeoplesothey cangetnewskillsandreachabetterjob.theproblemissituatedinthegrowingamountof temporary workers. The employers shy away from investing in temporary employees becausetheyarenotsurehowlongheorshewillkeeptheworker.thereforeemployersand thegovernmentshouldworktogethertoimprovetrainingfacilitiesfortemporaryworkers: thiscouldbesolvedifpublicservicesorganizedformationprogramsfinancedwithtraining funds whose money came from company taxation. As employers would have already paid fortheformationprograms,theywouldliketheirworkerstoparticipateinthem,andother incentives could also be introduced (such as tax reductions) to activate employees and enterprises and strengthen the participation, as well as creating institutes to ensure that everybody can attend training programs. The purpose should be motivating companies to participate to employees education programs. In promoting lifelong learning the Netherlands have set a good example: 40% of all workers are covered by training funds whichfinanceson the jobtrainingandsometimesalsooff the jobtraining.thereisalsothe proposal of creating a personal work budget financed by the Government, employers and employeesforallworkers(bothwithopenendedandfixedtermcontracts)anditsobjective istoencouragethemtoinvestintheiremployability. 6.3 Educationforunemployedpeople. Even more important than further education in employment is education for unemployed people.workersmustbeabletokeeptheirknowledgeuptodatetomeettherequirements ofemployersandofthelabourmarket:theymusthavethenecessaryskillstoadaptatevery moment to changes, so it will be easier for them to find a job. The question is who is 18

19 responsiblefortheinstallationandfinancingoftrainingfacilitiesforunemployedpeople.it isafactthatineverymemberstateunemployedreceivebenefitsfromthegovernment,but these benefits are intended for the basic financial and social security. Therefore it is necessary that the State also offers education programs for unemployed people, which is beingdoneinallthecomparedmemberstates,exceptitaly(wherethesecoursesareheldin some regions by European Social Fund and social cooperatives). However, these programs areofteninefficientanddonotprovideworkerstheskillstheywilllaterberequiredbythe labourmarket.inspain,forexample,employmentpublicserviceshavebeguntoelaboratea professionalprofileofeveryunemployedworkertoprovidehim/hertheskillsthataccording tothisprofiletheyneed. AlthoughthesupportoftheStateisessential,intermsoffurthereducationnooneshould rely exclusively on the commitment of the Government. Anyone is demanded to invest in furthereducation,whetherunemployedornot,alsoinhisorherowninterest.thisideahas beendeeplydevelopedinthenetherlands,where,asithasalreadybeencommented,the creationofapersonalworkbudgetshowsthatformationisnotanymoreattendingcourses organized by the State or the employer, but also requires and active participation of workers. 7. Effectiveactivelabourmarketpolicies. In the Commissions opinion the Active Labour Market Policies should help unemployed peoplebacktoworkthroughjobplacementservicesandlabourmarketprogrammessuchas trainingandjobcreation.byimplementing activelabourmarketpolicies suchasanefficient job search support and good work incentives, jobseekers can be encouraged to find new employment. Job search courses and job clubs have been shown to be among the most effectivemeasurestohelptheunemployedfindajob 3. Activelabourmarketpolicieswouldcontainthestrengtheningpublicemploymentservices in terms of staff and skills. The Commission mentioned the importance of cooperation betweenthedifferentpartnersinlabourmarket,liketemporaryworkagencies.thegoalof active labour market policies should be the support of long term unemployed people and alsoofthoseworkerswhohavebeenunemployedforseveraltimes. 3 EUROPEAN COMMISSION. Towards Common Principles of Flexicurity: More and better jobs through flexibility and security. July

20 Theimportanceofaneffectiveactivelabourmarketpolicyhastobeconnectedtotheneed offlexibility:themoreapersoncanbehelpedinenteringthelabourmarket(alsothanksto the lifelong learning policies), the more this person becomes independent and does not needthegovernment shelp.theideaisthatmemberstatesshouldencourageunemployed peopletoenteragainthelabourmarket,insteadofjustreceivingunemploymentindemnity and not being active and reactive in the labour market. Flexicurity promotes flexible contractualarrangementsandhighunemploymentbenefitstoliveonwhilenothavingajob, butthethirdindispensableelement(togetherwiththelifelonglearning)isthattherewillbe an active participation from the State and the employees in order they can reenter the labourmarketassoonaspossible.infact,unemployedpeopleareacostforeachmember State and the sooner they get employed, the sooner the State can use its funds in other branchesofsocialresponsibility(forexampleinvestingthismoneyinhealth,education ). 7.1 Publicjobagencies Public job agencies are agencies in which unemployed people have to subscribe, before the are going the get a unemployment allowance or a some sort of course. We will explain them more detailed further on Efficientpublicjobagencies Discussing about this issue and comparing our different national systems, it emerged the commonuseofpublicjobagencies.whenworkersgetunemployedtheyhavetoregisterin the list of the public job agency in order to receive unemployment benefits. This public agencywillinformthemofthesuitableofferstotheirskillsandqualities.inspainwehave alreadymentionedthattheemploymentpublicserviceswillelaborateaprofessionalprofile ofunemployedpeopleandwilltrytoofferthemthemostsuitablejob.theywillalsohelp themtowriteacurriculumvitaeoranintroductionletter,teachthemhowtobehaveina jobinterview Europerhourjobs AnotherinterestingelementwhichisbeingusedbothintheNetherlandandinGermanyare the 1(or2,intheNetherlands)Europerhourjobs :inordertoreceivetheunemployment 20

21 benefits, the unemployed worker will carry on activities which are useful for the whole communityreceivingasymbolicalwageof1or2euros.somethingsimilarcanbefoundin theitaliansystemwiththeuseofthesocalled lavorisocialmenteutili,wherethesocially useful works are thought to help unemployed people in being active during the unemploymentperiodand,inthemeantime,tousethisworkforceinactiviteswhichcanbe useful for the community. These systems offer lots of advantages because unemployed workers will be socially useful while not having a job, they will keep working so their reentranceintolabourmarketwillbeeasierandatthesametimereceivingunemployment benefits will not mean staying at home without doing anything, so the will participate activelyinlookingforanotherjob.therefore,allmemberstates,especiallythosewithhigh unemploymentbenefits,shouldthinkaboutimplementingasimilarsystem Threetimespolicy Anotherveryusedwaytopushpeopleinactivelookingforajobisthepolicythatwecould call the three times policy : in many Member States such as Belgium, Spain, Netherlands andlithuaniathejobseekercanrefuseajobproposalofferedbythejobagencyjustfortwo times. Whenever he or she refuses it for the third time, he or she would not be able to receiveotherbenefitsandsocialhelp. Theproblemis:doesthisworkrefusalpolicybeconditionedbythenecessarypresenceof someimportantconditions? Wediscussedaboutsomepointswhichcanbringsuchastrictpolicyintodeterminedlimits: the job agency, while actuating this policy, has to keep in consideration an important question: the unemployed person does look for a job with, as much as possible, the same qualificationandremunerationofthepreviousjobhehad.theproblemcomesoutwhenthe newjobismuchdifferentanditmustbemaybefoundalimitagainstthestrictnessofthis rule.itwouldnotbefairforaworkerwhohadqualitiesandskillsforadeterminedjobto change it into a less qualified an remunerated occupation. However, in this time of economicalcrisis,jobseekersshouldbeencouragedtoacceptjobproposalsdifferentfrom whattheyexpectandreducethecasesof allowed refusal. 21

22 7.1.4 Specialcategoriesofunemployedpeople Anyway,jobagencies,inhelpingunemployedpeopleinthesearchforajob,shouldconsider the presence in the labour market of some weak categories and try to protect them. For example, they should think about the employability of pregnant women or with children, disabled workers and not retired old people. The special difficulties these groups have to face when looking for a job should be taken into account by job agencies, giving them priorityovermoreemployableworkers.thispriorityshouldalsobegiventopeoplewitha heavyfamilycharge,becausefromtheirsalarydependnotonlythemselvesbutalsoother people. 7.2 Otherlabourmarketagents:temporaryjobagenciesandoutplacementagencies Anotherpointofourdiscussionconcernedthepresenceoftemporaryandoutplacementjob agencies:theseprivateinstitutionsshouldworktogetherwiththegovernmenttocreatea networkbetweenemployersandemployees.thepublicjobagencieshavemoreresources andcoverthenationallabourmarket,whiletheprivateonesoperatelocally. Temporaryjobagenciesarecharacterizedbyhiringworkersandpostingthemtoemployers inordertocarryoutspecificactivitieswithafixedtermcontract,astheitalian,spanishand German examples. These agencies are someway necessary to the flexibility of the labour marketalthoughtheyonlyofferfixedtermcontractsotheworkers interestsarenotalways protected as in an open ended contract. Therefore these agencies should be seen as a complementarywayofworkers employment. Outplacement agencies are usually paid by an employer who dismisses a big number of workers and their activity is to put into connection these employees with new employers whoarelookingforpeoplewithdeterminedskills.itisameasuretoreemploypeopleina very short period of time after their dismissal, so this should avoid spending too much governmentalfundswhicharegenerallyusedforunemploymentindemnity. Anyway,theseprivatejobagenciesshouldnotworkfreelyinthelabourmarket,butshould bekeptunderthegovernmentscontrolandtheymayrespectdeterminedstandards.they also should be encouraged in keeping in consideration not just profit, but also the importanceofemployingpeople. 22

23 8. Conclusionsandrecommandations For the last few months we have been suffering a global economical crisis. Economical perspectivesarenotgoodatall,withnoimprovementexpecteduntil2010.however,thiscontext must not be an excuse to stop flexicurity s implementation, but a proof that the changes it requireshavetobemade.beingabletogiveaquickresponsewillallowoureconomiestobemore competitive,getoutfasterfromthiscrisisandprovideemploymenttothepeople.inaconstantly changing global economy adaptability is essential to improve the performance of the Member States,andthisadaptabilitycanbeprovidedbyflexicuritywithoutsacrificingemployees rights. While we were studying the employment contracts from each Member State, we reached the conclusionthatinmanyofthem,externalflexibilityisnotoptimized.openendedcontractshavea low level of flexibility and strict dismissal rules. Because of that employers use high number of fixed term contracts with less securities for the worker. On one hand, we can take Spain as an example:although2/3ofthecontractsareopen endedthereisalso1/3offixedtermcontracts due to the strict legislation which protects the first ones. This has brought Spain to have the highest unemployment rate of the European Union, because in a context of crisis employers simplydonotrenewfixedtermcontracts.ontheotherhand,inthenetherlandstherearemuch moreflexibledismissalrulesandtheyarethememberstatewiththelowestunemploymentrate. Therefore,wethinkMemberStatesshouldreachmoreflexibledismissalconditionsinopenended contracts,soemployerswillnotusefixedtermcontracts.thepurposeofthisproposalistogeta morehomogeneouslabourmarketwithflexiblecontracts,insteadofacoreofsecuritywithopen ended contracts and a periphery with fixed term contracts. We agree that there are some economicalsectorsthatconstantlychange(forexampletourism)wherefixedtermcontractsshall beused,buttheiruseshouldbestrictlylimitedbythestates,astheyhavebeendoinglastyears. Another interesting measure would be easing hiring rules in Member States. It is true there are minimumsthatmustberespected,buttheoversizedbureaucracyinmanystateshasledtothe presenceofahighlevelofblackworksuchasinitalyandspain. An important resource to improve businesses adaptability and that is not being used in many States is internal flexibility. Although legally employers are able to modify employers working conditionswhenjustifiedandworkersmayalsohavetofacegeographicalandfunctionalchanges, the truth is that these instruments are often limited by collective agreements or particular contracts. 23

24 InternalflexibilityisfrequentlyusedinFinlandandtheresultisoneofthelowestunemployment rates in the European Union. Because of that we think that Governments should carry on measurestopromoteinternalflexibilitysoemployerscouldgetthenecessaryadaptabilitywithout havingtodismissworkers. Reaching a higher level of adaptability in labour market through more flexible contractual arrangements is necessary, but at the same time modern social security systems have to be developedtooperateasasafetynetduringperiodsofunemployment.afterstudyingthesituation in the Member States we concluded that in most of them (with the possible exception of Lithuania) there are high unemployment benefits for workers who have lost their job, which is fundamental in order they can live on them while looking for another. However, social security systemscannotonlyconsistinprovidingincometounemployedpeople.althoughworkerswillnot accept having flexible contractual arrangements and the possibility of being easily fired without the security that high unemployment benefits provide, they also may have a negative effect as they reduce financial incentives to get back into labour market. Therefore Member States have started developing numerous instruments to get social security systems that not only provides incomes, but also reintegrates people into labour market. Having studied these different active labourmarketpolicies,wecametotheconclusionthatthesewerethebestpracticestobeapplied intheeuropeanunion: - exclusionfromunemploymentbenefitsofthoseworkerswhodonotregisterinjobagenciesordo notparticipateinreintegrationorformationprograms. - progressivereductionofunemploymentbenefits:wethinkworkersshouldreceiveatthebeginning of their unemployment benefits similar to their previous salary and reduce them progressively untilreachingaminimum. - limitationofthepossibilityofrefusingajobofferwhenbeingunemployed:inmanymemberstates workerswillnotreceiveunemploymentbenefitsiftheyrefusethreejobs.weconsiderthatthisis areallygoodideabutalwaystakingintoaccounteachworker sprofileandpreviousjob,inorder totrytoofferthemthemoresimilarjobtotheonetheyhad. - one Euro jobs : this German system(in the Netherlands it is known as two Euros jobs ) obliges people to keep working despite being unemployed and ease their reintegration into labour market,atthesametimethatmakeslessattractiveperiodsofunemployment. - giving priority to specific categories with a low level of employability: these groups have more difficultiestoreintegrateintolabourmarket,sosocialsecurityshouldespeciallyhelpthemfinda newjob. 24

25 - another interesting idea is the proposal made in the Netherlands for privatizing social security: if donewiththenecessarypubliccontrols,itmightreducestate sexpenditureandgrantanactive participationoftheformeremployerinthereintegrationofunemployedpeople. Comparing also the important role played by private job agencies in many Member States, we considerthatifthereisasuitablecontrolfromthestates,theseprivateagencies(temporaryjob agenciesandoutplacementagencies)canbearelevantcomplementtoreintegrateworkersinthe labourmarket,especiallyinalocallevel.ouropinionisthatstatesshouldtrytoincorporatethem inthemostefficientwayintotheiremploymentservices. Comprehensivelifelonglearningisthefourthelementofflexicurityandhasagreatimportanceas awaytoadaptemployeesskillstotheconstantlychangingneedsofnowadayseconomy.because ofthat,allstudiedmemberstateshavepublicuniversitiesandofferloansandgrantstostudents withbettermarksandthosewhocannotaffordtheiruniversityfees. Due to its vital role in education process, we think university should be public and accessible to everyone. Although this system requires lots of funds, our opinion is that States must finance it withpublicmoneyfromtaxesandavoidprivatecompanies participationinuniversities,becauseit wouldmeanpursuingnotonlyeducationbutalsoprofit,whichshouldnotbedoneatuniversity. Regarding further education for employed people, in many Member States there are formation programs for workers. However, they usually do not reach the necessary quality level and employersarenotmotivatedenoughtolettheirworkersparticipate. A solution might be developing formation programs financed both by the States and employers (whowouldreceivetaxreductionsfortheparticipationoftheiremployees)andwhosequalitywas grantedbystate scontrol.itwouldbeasuitablewayofpromotingtheseformationprogramsand makingthemfinanciallysustainablebythestateandprivatecompanies. Educationforunemployedpeopleisalsoaveryimportantelementinthelabourmarketasitisa majorinstrumenttoprovideworkerstheskillstheyneedtofindanewjob.becauseofthat,most Member States offer public formation programs for unemployed workers. The problem is that these programs are often not available for everyone and have no relation to workers previous experience. In our opinion employment public services should elaborate therefore a professional profile of each worker and try to provide the formation that suits the most his/her profile. Higher investments must also be made in order to grant that anyone is able to participate in these programs. 25

26 Flexicurityisahugechallengebutalsoabigchance.ProfessorBartRoelssaidlastTuesdaythatits futurewillprobablydependontheeconomicalcrisiseffectondenmark slabourmarket,whichis flexicurity s best model. Although we will have to keep observing the evolution of the crisis in European Union and our opinion may change, after having studied the situation in our Member Statesandtheirstrongerandweakerpoints,wehavecometotheconclusionthatflexicuritycould bearealsolution.memberstatesmusttrytoimplementthismodelinordertogetamoreflexible labourmarketthatwillallowthemtoadapttoeconomy sneeds,butprovidingatthesametime employmentsecuritytoworkers.ofcoursethereare27differentnationalsituationsandinsome countriesitwillbemuchmoredifficulttoimplementthissystemthaninothers.however,aglobal effortshouldbemadeinordertoreachthefourcomponentsofflexicurity(thesocalled golden square ) and, despite the particular necessities and characteristics each country requires, get a more similar labour market in the Member States of the European Union, a labour market that allowsarapidanswertoeconomicalchangesandprotectsworkersatthesametime. 26

27 9. Bibliography Papers ARIANNAGIOVANNARDI,FlexicurityinItaly:instructionsforuse,UniversityofBologna JUDITHMOOSMANN,Flexicurity,HFWUNürtingen, ARTOKALLUNKI,Flexicurity,OuluUniversityofAppliedSciences ALEXANDRECASADEVALLPORTAS,Flexicurity,UniversityofGirona DERRICKSWEERS,Flexicurity,PlantijnHogeschoolAntwerpen NOUSCHKAVANUFFELEN,Flexicurity,JuridischeHogeschool RAIMONDAKARANAUSKYTE,FlexicurityintheLisbonStrategy,UniversityofKaunas Lectures ISMOKOPONEN,InterculturalCommunications. CHRISTIANEFLEMISCH,Germany snationalreformprogram. JOEPTIMMERMANS,ImproveSocialWelfareSystemsbyEnsuringGenerousSocial BenefitsCoveringallFormsofContractsandWork. RIENBROUWER,FlexibilityontheLabourMarket. FRANCINAESTEVE,MARIONAILLAMOLA,TheLisbonStrategyandtheRelaunch Programme:Acriticalapproach. BARTROELS,TheDanishModelandotherexamplesofreformsofthelabourmarket. LUCBROES,LisbonStrategyandEuropeanLaw Internet ec.europa.eu/eurostat/ lavoro/istat quartotrimestre.html 27