EUROPEAN PILLAR OF SOCIAL RIGHTS. #SocialRights THE FUTURE OF WORK AND THE EUROPEAN PILLAR OF SOCIAL RIGHTS. #SocialRights.

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1 THE FUTURE OF WORK AND THE EUROPEAN PILLAR OF SOCIAL RIGHTS 1 January 22, 2018

2 Why do we need a new start for Social Europe? Changing world of work An ageing Europe Consequences of the crisis Divergence within the euro area 2 2

3 Divergence within the euro area: differences have become much larger Unemployment rate, percent Slovakia EU-28 Luxembourg Spain Netherlands Greece Germany Spring Forecast MAX MIN Source: Eurostat Labour Force Survey, European Commission, European Economic Forecast, Spring 2016

4 % An aging Europe: Rising life expectancy and falling fertility rates lead to an ageing and shrinking population % of population aged EU % of population aged 65+ EU Dependency ratio projected to increase to 52.3% by 2080 Source: Eurostat

5 An aging Europe: PROJECTED OLD AGE DEPENDENCY RATIO 2060 This indicator is the ratio between the projected number of persons aged 65 and the projected number of persons aged between 15 and 64. The value is expressed per 100 persons of working age (15-64). Legend 35.3 to to to to to 65.9 Source: Eurostat 7

6 Changing world of work: Working life radically transformed 8

7 Changing world of work Types of employment relationships, EU28, 2016 Self-employed persons without employees Self-employed persons 10% with employees 4% part-time, temporary 4% full-time, temporary 8% other 1% full-time, permanent 60% part-time, permanent 13% 9

8 Changing world of work The heterogeneity of the self-employed 10

9 Changing world of work Evolution of non-standard work ( ) and projection for the future ( ) by type of contract, EU-15 ( ) and EU-28 ( ) 11

10 The European Pillar of Social Rights A reference framework for upwards convergence 20 principles and rights Building on the existing EU social law A scoreboard of employment and social indicators Several concrete initiatives 12

11 The 20 principles and rights at a glance Equal opportunities and access to the labour market Education, training and life-long learning Gender equality Equal opportunities Active support to employment Fair working conditions Secure and adaptable employment Wages Information about employment conditions and protection in case of dismissals Social dialogue and involvement of workers Work-life balance Healthy, safe and well-adapted work environment Adequate and sustainable social protection Childcare and support to children Social Protection Unemployment benefits Minimum income Old age income and pensions Health care Inclusion of people with disabilities Long-term care Housing and assistance for the homeless Access to essential services 13 13

12 First initiatives Work-life Balance: Directive + policy measures Access to social protection: Information rights for workers: Working Time: Social partners' consultation Adoption of Transparent and Predictable Working Conditions Legal guidance on Directive 2003/88/EC 16 16

13 Do we need new rules? 2. Access to social protection Reducing employment protection differences provide additional job opportunities But risk of new precariousness and inequalities How to provide as many people as possible with social security cover? 18 18

14 Is everyone being protected? Risk of not being entitled to unemployment benefits 21

15 Coverage of sickness benefits Risk of not being entitled to sickness benefits 22

16 What are the consequences? Contributions of self-employed vs. employees, EU,

17 What are the gaps in social protection? Formal coverage of non standard workers 24

18 What are the gaps in social protection? Voluntary schemes - non standard workers 25 a) additional schemes; b) if income below a certain threshold; c) For specific categories of non-standard employees.

19 What are the gaps in social protection? Voluntary schemes - self-employed 26

20 Results from the open public consultation Participation 119 respondents replied to the OPC of which 62 organisations, 7 administrations, 37 citizens and 13 others (e.g. research institutes, networks). 15 position papers were received, mainly from Germany (5), Belgium (4), France (2) and the UK (2). Challenges Around 2/3 of the respondents agreed with the challenges identified by the Commission. The highest agreement was on gaps in effective coverage, followed by regulatory complexity

21 Results of the hearing with self-employed Heterogeneity of the self-employed highlighted (tradtional vs. new forms of S-E) Risk underestimation leading to old-age poverty Mixed views on the organisation of social protection Some favoured an universal system with a broadened financing basis Others recalled the subsidiarity and proportionality principles and that social protection of the self-employed should be voluntary Benefits should be attached to workers and be made portable European Semester as the most appropriate instrument to address the challenges 28 28

22 Results of the hearing with self-governing bodies and private insurers huge pension gap in the future for self-employed (e.g. in the Netherlands) people under-estimate the risk (Zurich Insurance, Belgium Invalidity Insurance) due to lack of awareness self-governing bodies are in favour of a universal system integrating self-employed in the general scheme to guarantee transparency and transferability auto-enrolment with opt-out could be an interesting avenue for self-employed. Some self-governing bodies would be open to the establishment of EU minimum standards Others underlined the subsidiarity principle and a better use of the European Semester, the OMC and an exchange of best practices. Some noted a shift from contributions to taxation in terms of financing sources 29 29

23 Results from the second phase social partners consultation Social partners confirmed their positions from the first phase consultation on entering into negotiations: Employers do not see the need for an EU level action. Trade unions are willing to negotiate but if the conditions for negotiations are not met, the Commission should come up with a legislative proposal before the 2019 European elections. On the objectives of coverage, transferability and transparency, Employers agree with the objectives but highlight the MS competence in this field. Trade unions would like to add adequate access to social protection as an objective

24 Results from the second phase social partners consultation On the options of formal coverage, Employers have a mixed view: Some refer to subsidiarity, others favour voluntary coverage because of the diversity of forms of employment and the heterogeneity of the self-employed and even others call for mandatory coverage as long as there is freedom of choice (public of private) for the self-employed. Trade unions favour mandatory formal coverage, equalised to those of standard workers

25 Results from the second phase social partners consultation On the appropriate instrument for EU action, 32 Employers are opposed to legally binding actions but some of them consider a Council Recommendation to be suitable (BDA, CEEP and Eurocommerce) which could help to steer further actions within the European Semester. Some trade unions favour an EU directive with binding minimum principles and requirements but it should not undermine existing EU acquis, or lower existing national standards or lead to downward harmonisation of rights. On minimum requirements for transferability and transparency, All social partners agreed on higher transparency. Trade unions call for full transferability. Employers stress subsidiarity and would like to limit transferability of minimum social protection rights. Anyhow, there should not be an additional burden or cost of transferability. 32

26 For more information visit: ec.europa.eu/european-pillar-social-rights 33

27 Appendix 34

28 SHARE OF JOBS AT RISK OF AUTOMATISATION (%) Source: Bruegel calculations based on Frey & Osborne (2013), ILO, EU Labour Force Survey 35 * Data not available for Cyprus 35