The European Pillar of Social Rights: The EU perspective and insights into the social scoreboard Barbara Kauffmann Director of Employment and Social Governance European Commission, DG Employment and Social Affairs Nicosia, 20 April 2018

Outline of the presentation The challenges ahead: economic and social situation in Europe The European Pillar of Social Rights and its implementation tools Some highlights on Cyprus

Economic and social situation in Europe Background and challenges Economic and social situation in Europe

Differences between member states in the labour market Background and challenges Differences between member states in the labour market Worse 3 Cyprus EA19 EU28 Best 3 Source: Eurostat, Unemployment series [une_rt_a] and ECFIN Forecast

Economic growth and poverty risk - 'AROP' (in %) Background and challenges Economic growth and poverty risk - 'AROP' (in %) People at risk of poverty and social exclusion (EU27, Mio)

Source: EU-SILC cross-sectional data 2014 (UDB) Background and challenges Full-time work relatively well protects against poverty risk. At-risk-of-poverty rate by employment status (20-64years) Source: EU-SILC cross-sectional data 2014 (UDB)

Background and challenges Access to social protection – EU-28 In red risk of no statutory access to unemployment benefits Permanent, full-time Temporary, full-time Temporary, part-time Self-employed Policy objectives effective labour market dynamics: level playing field fairness: effective access to social protection transitions between jobs, contracts and labour law status: preservation and transferability of rights (requires administrative capacity and infrastructure build-up) Principles Ensuring similar rights and obligations for similar work Tying rights to individuals and make them transferable Making rights and related information transparent Simplifying administrative requirements Source: computations by Matsaganis et al, 2015

Background and challenges

The European Pillar of Social Rights and its implementation

What is the European Pillar of Social Rights? 20 principles and rights Equal opportunities and access to the labour market Education, training and life-long learning Gender equality Equal opportunities Active support to employment Secure and adaptable employment Fair working conditions 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

Putting the Pillar into action: a joint effort The European Pillar of Social Rights Implementation Putting the Pillar into action: a joint effort Update EU legislation, step up enforcement European Semester Funding Social dialogue & Civil Society

Legislative initiatives at EU level The European Pillar of Social Rights Implementation Legislative initiatives at EU level Proposal for a Directive + Accompanying policy measures Work-life Balance: Proposal for a Directive on Transparent & Predictable Working Conditions Working conditions: Legal guidance on Directive 2003/88/EC Working Time: Access to social protection European Labour Authority Social Fairness Package To support the Pillar, the Commission has already launched a number of initiatives at EU level: The proposal for a directive on work-life balance, which was launched last year, was the first in a series of concrete initiatives put forward at the European level to follow-up on the Social Pillar. Amongst other novelties, the proposal introduces paternity leave and specifies that parental leave should be compensated at the same level as sick leave. The aim of the proposal is to give more breathing space for parents and carers to combine work with family life – something that many thousands of families in Europe are struggling with every day - and to encourage a better sharing of caring responsibilities between women and men. The proposal is now in the hands of the Council and Parliament. [The legislative proposals include: The introduction of paternity leave of at least 10 working days, paid at sick level. The strengthening of parental leave by making the 4 month period non-transferable between parents and compensated at least at sick pay level. The introduction of five days carers' leave per year to take care of seriously ill or dependent relatives. The extension of the right to request flexible working arrangements (reduced working hours, flexible working hours and flexibility in place of work) to all working parents of children up to 12 and carers with dependent relatives. In order to complement the legislative proposal, the initiative contains a set of non-legislative measures to support Member States in achieving our common goals. These include: Ensuring protection against discrimination and dismissal for parents (including pregnant women and workers coming back from a leave) and carers; Encouraging a gender-balanced use of family-related leaves and flexible working arrangements; Making better use of European funds to improve long-term and childcare services; Removing economic disincentives for second earners which prevent women from accessing the labour market or working full-time. This initiative will not only benefit families. Businesses will profit too - from a wider talent pool and a more diversified, motivated and productive staff. This will lead to higher productivity and competitiveness. In addition, the initiative will also benefit Member States, as it will improve their fiscal position by reducing unemployment and increasing labour tax incomes.] Presented in December 2017, the Proposal for a Directive on Transparent & Predictable Working ConditionsA aims to set new rights for all workers, particularly addressing insufficient protection for workers in more precarious jobs, while limiting burdens on employers and maintaining labour market adaptability. More precisely, the proposal seeks to : Ensure decent and fair working conditions for all workers Increase the rights of the most vulnerable workers Give clarity to workers and employers as regards their contractual relationship, irrespective of the contract type As concerns working time, the Commission adopted an interpretative Communication together with social pillar package of April 2017, providing guidance on how to interpret various aspects of the Working Time Directive, in line with a growing body of case law. This will help Member States implement the acquis correctly and avoid further infringements, Finally, the Commission presented a Social Fairness Package in March 2018, whereby it proposes: first, a Council Recommendation to ensure Access to social protection for all forms of contracts, second, the setting up of a European Labour Authority. With the European Labour Authority we want to ensure that EU rules on labour mobility are enforced in a fair, simple and effective way. And with the proposal for a Recommendation on access to social protection we want to allow for more equal social protection rights for all workers, independently from their status (salaried or self-employed) or work contract.

EU funding: investing in people and supporting reform The European Pillar of Social Rights Implementation EU funding: investing in people and supporting reform European Social Fund: helps more than 10 million people each year to develop skills and fight social exclusion Youth Employment Initiative: helping more than 1.4 million young people through internships, apprenticeships and job placement, since 2012 European Globalization Adjustment Fund: helps workers lose their jobs as a result of changes in world trade patterns European Fund for Strategic Investments: more than 130,000 new jobs created so far (EUR 500 billion by 2020) Erasmus +: Supporting over 9 million young Europeans over the last 30 years Employment and Social Innovation programme (EaSI) Fund for European Aid to the Most Deprived (FEAD)

Social dialogue at the center of the Pillar The European Pillar of Social Rights Implementation Social dialogue at the center of the Pillar Extensive consultations at EU and national level in 2016 Principles: Responsibility of the social partners for its implementation Specific principle (8): social dialogue and involvement of workers Social partner consultations on informing the workers about working conditions and access to social protection are underway Social partners were represented at Social Summit for Fair Jobs and Growth in Gothenburg

How is the Social Pillar integrated in the Semester The European Pillar of Social Rights Implementation How is the Social Pillar integrated in the Semester The principles and objectives of the European Pillar of Social Rights serve as a point of reference for the implementation of the European Semester of policy coordination. Annual Growth Survey 2018 The policy guidance in the AGS builds on the Social Pillar. "The European Pillar of Social Rights (…) should be used as a compass." Joint Employment Report 2018 Benchmarking Trends including Social Scoreboard Proposal for amended Employment Guidelines Amended to ensure consistency with the European Pillar of Social Rights Euro Area Recommendation 2018 In line with the Pillar, there is a recommendation to implement reforms that promote job creation, social fairness and convergence, underpinned by an effective social dialogue Country Reports and Country Specific Recommendations (CSRs) Social Pillar is mainstreamed Continued focus on the euro area: To improve the integration of the euro area and national levels, the European Semester will – as in 2016 - be structured into two stages. Discussions and recommendations about the euro area take place first, ahead of country-specific discussions, so that common challenges can be fully reflected in country-specific actions. Strengthen the social dimension: continued emphasis is put on employment and social performance in the Macroeconomic Imbalances Procedure. Three headline indicators (activity rate, youth unemployment, long-term unemployment) are used again in the 2017 Alert Mechanism Report accompanying this Annual Growth Survey. Greater attention is given to social fairness in the context of new macroeconomic adjustment programmes, as shown by the social impact assessment produced by the Commission in the context of the recent support programme for Greece. The involvement of social partners and the convergence towards best practices are promoted. More focus on economic convergence: the Commission will progressively suggest benchmarks and cross-examination exercises across policy or thematic areas, to foster a common understanding of challenges and policy responses and to increase reform implementation. Increased democratic ownership: the dialogue with national stakeholders (governments, parliaments, social partners) and the European Parliament at key moments of the Semester process will be strengthened. Member States are encouraged to involve national Parliaments and social partners more closely, e.g. in the formulation of National Reform Programmes.

2017 Country-specific recommendations by area The European Pillar of Social Rights Implementation 2017 Country-specific recommendations by area Number of CSRs Based on this information we can come up every year with Country Specific Recommendations in the European Semester where reform options are discussed. Many European countries are indeed already engaged in major reforms of their labour market and welfare systems. You can see here that country recommendations come in great detail. It implies that we need detailed data to properly assess the situations. Education, skills, lifelong learning: Those are all very different areas, but all of them fall under the employment and social policies domain on which we advise Member States. Today the recommendations focus very much on the importance of skills. Skills requirements determine the future of work and are subject to continuous change. And the ever changing world of labour requires ever changing data requirements about both workers and their employers. It's important to diagnose problems as they emerge and to enable policy makers to react timely. Notwithstanding problems we still have with the timeliness and quality of some indicators, I can say that all policy areas are well backed up by numerous indicators that give an accurate picture of the current situation. Also European Social Fund, which supports cohesion and reforms is important and data plays a role there…

The European Pillar of Social Rights Social Scoreboard Digital skills (% of individuals with basic or above basic overall digital skills) Early leavers from education and training Employment rate (% of females aged 20-64)

Cyprus and the European Social Pillar

Social scoreboard for Cyprus Highlights on Cyprus Social scoreboard for Cyprus Based on the scoreboard Cyprus faces several challenges, in particular related to the proportion of NEET and evolution of the gross disposable household income Methodology used in the JER looks jointly at the levels and changes of each indicator Classification in seven categories from "best performers" to "critical situations" In the Social Scoreboard, Member States are classified according to a statistical methodology agreed with the EMCO and SPC Committees and used in the Joint Employment Report. The methodology looks jointly at levels and changes of the indicators in comparison with the respective EU averages, and classifies Member States in seven categories (from "best performers" to "critical situations"). For example, a country can be flagged as "weak but improving" if the level of the indicator is well below the EU average, but is improving fast. This is often for example the case for the unemployment rate and the level of digital skills. Based on the Social scoreboard, Cyprus faces several challenges. It faces a critical situation for the NEET ratio and the growth in the gross disposable household income. Further, it ranks "to watch" as concerns early school leaving, gender employment gap, AROPE and young children in formal childcare. It has poor performances as regards unemployment and digital skills, but shows significant improvements in both areas ("weak but improving"). Finally, it ranks on average as concerns income inequality, employment rate and the impact of social transfers, and performs better than average as concerns the self-reported need for medical care.

Highlights on Cyprus The share of young people not in employment nor in education or training (NEET) is alarming NEET rate (15-24) NEET rate, by education Second, let’s consider the NEET rate. The NEET rate (15-24) is flagged as "to watch" in the social scoreboard as a result of a high level and a further worsening of the situation. The NEET rate in Cyprus remains one of the highest in the EU. In 2016, it grew to 16 % (from 15.3 % in 2015), still significantly above the EU average of 11.6%. The NEET rate for young people with tertiary education was 4.8%, compared to EU average of 0.9%. Contributing factors include lack of jobs for university graduates (two in five graduates work in jobs below their qualifications), low enrolment in VET and possibly undeclared work. We know that the authorities try to address the situation through targeted counselling in schools and youth entrepreneurship schemes. Youth Guarantee monitoring led to estimates that only (23 %) of the NEET population was enrolled in relevant schemes in 2016. This is mainly due to the limited capacity of the Public Employment Services.

Household income is still substantially below the pre-crisis level Highlights on Cyprus Household income is still substantially below the pre-crisis level Gross Disposable Household Income (GDHI)

Gender employment gap is rising Highlights on Cyprus Gender employment gap is rising Gender employment gap Employment rate by gender Let us now look at a number of specific indicators. First, we consider the gender employment gap. The gender employment gap is flagged as "to watch" as a result of rapid increase in the indicator. The level of the indicator remains below the EU average. The recent increase in the gender employment gap can be explained by the increase in the male employment rate, which had strongly decreased during the crisis. Since the recovery which started in 2014, the employment rate for men increased again (more strongly than for women who were less affected by the crisis) and as a result the gender employment gap has increased. Given that the employment rate of women has still slightly increased, the increase in the gender employment gap may be less problematic than the scoreboard would suggest. Nevertheless, it remains important to closely monitor the situation, also to ensure that the gender employment gap does not increase again to the level before the crisis (17%), which was a source of concern, also if we look at it in a comparative perspective since it was substantially above the EU average. As a complementary information, we can see that a lack of formal childcare could be an important driver of stagnating female labour participation as suggested by the low share of young children in formal childcare.

"If we want to be credible, we have to deliver." "The European Pillar of Social Rights is not a poem. It is first of all a programme of principles but also an action plan." "If we want to be credible, we have to deliver." Jean-Claude Juncker during the Social Summit for Fair Jobs and Growth in Gothenburg, 17 November 2017

Thank you!

Links to main documents European Pillar of Social Rights https://ec.europa.eu/commission/priorities/deeper-and-fairer-economic-and-monetary-union/european-pillar-social-rights_en Reflection paper on the social dimension of Europe https://ec.europa.eu/commission/sites/beta-political/files/reflection-paper-social-dimension-europe_en.pdf Joint Employment report http://ec.europa.eu/social/main.jsp?catId=101 Social scoreboard https://composite-indicators.jrc.ec.europa.eu/social-scoreboard/