ILO – ETUC conference Budapest, November 2011 rjanssen@etuc.org Precarious work :Observations and experiences from the point of view of the ETUC ILO – ETUC conference Budapest, November 2011 rjanssen@etuc.org

Precarious work is everywhere Many different forms, but it is present in some form of the other in all member states One common characteristic: Insecurity for the worker involved Statistics are impressive; From 1997 to 2007: 10 million extra temporary workers (32 million) 8 million extra part timers (4O million) 31 million on a poverty wage

One third of new jobs created in EU 27 since 1998 are fixed term jobs

A limited overview Austria: « All in » contracts Belgium: False independent workers, daily contracts Bulgaria: Undeclared work, informal sector work France: Majority (80%) of new hiring done through fixed term contracts. Low wage traps through perverse effect of lowering social security contributions for low wgaes

A limited overview Finland: 25% of workers in municipalities and non profit sectors are fixed term Germany has it all: Rising part time work, booming agency work, exploding low wage sector, young trainees for free, mini jobs, 1 euro jobs Ireland: Migrant workers not being paid the ‘going wage rate’, rising bogus self employment, long chains of contracting out

A limited overview Italy: ‘parasubordinare’; collaboration contracts, insertion contracts Poland: Enormous rise in fixed term work from 4% in 1999 to 26% in 2005 Spain: 33% fixed term contracts with two thirds of them shorter than 6 months Sweden: Rising part time contracts combined with ‘on call work’, loosening of limits on fixed term work contracts from 12 to 24 months

Across the EU, identical « excuses » are being put forward (1) « Labour law » is outdated, used to fit the prime age male working in industry (Fordistic model) but no longer adequate for females working in differentiated services. Think deeper: The opposite is the case. A fragmented workforce working in services needs labour law protection more than ever.

Across the EU, identical « excuses » are being put forward (2) « To compete in a globalised world against ‘cheap’ producers, a modern economy needs to be very flexible » Reality however is that employers go for ‘flexibility’ because this weakens workers’ bargaining position and wages. It’s the old agenda of cutting costs by exploiting labour, not the innovation agenda.

Temporary contracts come at a high wage discount.

Across the EU, identical « excuses » are being put forward (3) « Flexibility is necessary to create more jobs » OECD 2006 Employment Outlook arrived at the conclusion, after ten years of promoting the scrapping of job protection, that there’s no link whatsoever between job performance and Employment Protection Systems Some negative effects are found for youth unemployment, but positive effects for older workers.

« Bad jobs drive out good jobs » If share of fixed term work increases but if flexibilisation does not improve job performance, logically this means deregulation transforms what other would have been good jobs into bad ones. Indications in practice: Chains of fixed term work: the same worker with the same company in the same job for years Part time work: Full time overwork at part time official pay and conditions

It’s all the fault of well protected workers (the insiders) In practice, outsiders and their contracts are used to discipline the core work force « Cynical »

Precarious work and this crisis

Why business has made maximum use of temporary contracts Memory of a sudden collapse in aggregate demand Memory of the credit crunch: Boost capital reserves by going for maximum profits and minimum wages

However, precarious work produces a precarious recovery If the increase in employment is precarious jobs, the strength of the recovery of demand will be endangered : Wage discount of temporary jobs Insecurity leads to higher savings rates, less consumption Reduced access to finance Longer term :No stepping stones but a precarious job trap

Almost one third of temporary contracts pays low/poverty wages

High and rising savings rates

Bad jobs traps: No easy escape from temporary contracts

The ETUC positions on precarious work A history that dates back a long time ago Beginning years of European Social Dialogue Mid nineties: Agreements on a typical forms of work have been negotiated on the basis of the principe to try and provide some kind of a framework to control these forms of work in one or the other way

Agreement on fixed term work In respect of employment conditions, fixed-term workers shall not be treated in a less favourable manner than comparable permanent workers solely because they have a fixed-term contract or relation unless different treatment is justified on objective grounds. Where appropriate, the principle of pro rata temporis shall apply.

Agreement on fixed term work To prevent abuse arising from the use of successive fixed-term employment contracts or relationships, Member States, after consultation with social partners in accordance with national law, collective agreements or practice, and/or the social partners, shall, where there are no equivalent legal measures to prevent abuse, introduce in a manner which takes account of the needs of specific sectors and/or categories of workers, one or more of the following measures: (a) objective reasons justifying the renewal of such contracts or relationships; (b) the maximum total duration of successive fixed-term employment contracts or relationships; (c) the number of renewals of such contracts or relationships.

Agreement on fixed term work The parties to this agreement recognise that contracts of an indefinite duration are, and will continue to be, the general form of employment relationship between employers and workers. They also recognise that fixed-term employment contracts respond, in certain circumstances, to the needs of both employers and workers. It illustrates the willingness of the Social Partners to establish a general framework for ensuring equal treatment for fixed-term workers by protecting them against discrimination and for using fixed-term employment contracts on a basis acceptable to employers and workers.

Flexicurity discussion 2007 ETUC Executive resolution: Key pillars of flexicurity are: Robust job protection Broad acces to social security (robust unemployment benefits) Idea behind: Turn discussion upside down If we want an agile labour market with workers moving around between jobs, we’de better make sure the labour market is composed of stable jobs paying good wages and decent social security coverage. Otherwise workers will not move….

Joint opinion and its labour law section Recommend ‘to review, and if neccesary adjust, the design of labour law and job protection ‘with a view to’ Ensure balance between flexibility and security. Provide adequate security for all contracts Develop complementary employment security measures Enhance legal certainty with regard to scope, coverage of labour law Respect the European Social Aquis Promote stable employment relationships Improve work/life balance

Recent trends Financial tsunami is blowing Social Europe off its feet: Financial markets rule! Every week, governments are giving the market a signal to prove that they are worthy Ongoing dismantling of bargaining systems, wage formation systems as well as backstops on precarious work practices.