EU Fixed-term work directive has limited effect at local level

A new study shows that the EU Directive on fixed-term work has had a limited impact on employers’ recruitment strategies and employees’ working conditions in the local government sector. Moreover, the directive appears to have paradoxically reduced rather than increased labour market flexibility, as Danish employers are less likely to employ unskilled fixed-term workers due to increased bureaucratic procedures arising from the directive.

Background

[Fixed-term work](/search/node/areas OR industrialrelations OR dictionary OR definitions OR fixedtermwork?oldIndex) remained a relatively unregulated area in the Danish labour market, prior to the implementation of Council Directive 1999/70/EC of 28 June 1999 concerning the framework agreement on fixed-term work concluded by the European Trade Union Confederation (ETUC), BusinessEurope (previously the Union of Industrial and Employers’ Confederations of Europe, UNICE) and the European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP). However, a few exceptions regarding fixed-term work were contained in the Act on the legal relationship between employers and salaried employees (Funktionærloven).

The EU Directive on fixed-term work was implemented through collective agreements and supplementary legislation in Denmark. It aims to improve the working conditions of workers with a fixed-term employment contract by ensuring the non-discrimination principle and preventing abuse through the use of successive fixed-term contracts.

Study examines directive’s impact

A new study (in Danish, 706Kb PDF), published in August 2008, examines the effects and influences of the EU Directive on fixed-term work in the Danish local government sector, evaluating the actual impact of the directive at local level. The study, which was commissioned by Local Government Denmark (KL) and the Association of Local Government Employees’ Organisations (Kommunale Tjenestemænd og Overenskomstansatte, KTO), is based on interviews at 259 workplaces with 27 representatives from central management, as well as shop stewards in 14 randomly selected Danish municipalities. The interviews were carried out during the spring and summer of 2007. The study shows that the effects of the EU Directive vary depending on the type of outcomes under examination – such as in relation to local implementation initiatives, employers’ recruitment strategies and the working conditions of fixed-term workers.

Local implementation initiatives

Almost all of the municipalities participating in the study had transposed the directive at local level. The implementation methods applied ranged from information letters, work meetings, seminars, guidelines for good practice and local agreements. Relatively few municipalities had set up internal temporary agencies to anticipate the regulatory changes regarding fixed-term employment contracts and part-time work. However, most implementation initiatives were employer led. In fact, hardly any shop stewards cited local trade union initiatives, and some had not even received information from the sectoral-level organisation to which they are affiliated. Despite the relatively few employee-led initiatives, some local trade union affiliates – particularly those representing northern Jutland – had run information campaigns to ensure that the working conditions of fixed-term workers were in accordance with the law and collective agreements. The Danish Federation of Early Childhood Teachers and Youth Educators (Forbundet for pædagoger og klubfolk, BUPL), in particular, had run such campaigns within the childcare sector.

The different local initiatives varied not only between the municipalities, but also within each municipality: for example, some services in the municipality had developed specific implementation methods, while others failed to transpose the directive. Overall, however, the local implementation initiatives suggest that the directive has been relatively effective in terms of its transposition across the system. Nevertheless, the actual effects of the directive – in terms of its influences on individual employers’ recruitment strategies and improved working conditions for workers with fixed-term employment contracts – appear to be significantly lower.

Employers’ recruitment strategies

The directive appears to have had a limited effect on individual employers’ recruitment strategies. More than 37% of the employers interviewed have experienced no change in their recruitment strategies following the directive’s transposition. Nonetheless, about 20% of the employers have reportedly become more aware of the rules and procedures regarding fixed-term employment contracts, and some are even stricter when recruiting temporary staff. Certain workplaces, particularly schools, childcare and elder care institutions, also feel that the directive has eased the handling of fixed-term contracts, since the rules and procedures have become clearer. Employers from the municipalities which have failed to implement the directive at local level have found it most difficult to manage the different rules and procedures regarding fixed-term contracts; on the other hand, guidelines and local agreements have reportedly eased the handling of fixed-term contracts at the workplace. Local agreements have also appeared to encourage greater compliance with the directive, as employers from such municipalities have reportedly become stricter when using fixed-term contracts. In addition, most employers recruited fixed-term workers based on the occurrence of a specific event rather than a fixed ending date, which was the only option available to employers prior to the directive.

Although this suggests that the directive has had some impact on employers’ recruitment strategies, other parts of the research suggest a slightly different outcome. For example, a relatively large group of employers continues to use their budget and the number of children in day care as objective conditions, although some collective agreements in the local government sector exclude these two conditions. Similarly, employers’ use of fixed-term contracts have remained largely unchanged, with only about 25% of the workplaces experiencing a change in the use of such contracts. Moreover, this change was unlikely to be as a result of the directive, as most interviewees referred to an increased or decreased demand for fixed-term workers, problems with recruiting permanent staff, a local decision to recruit only fixed-term workers, changes in their budget and the recent reform of the local government sector. In addition, some employers reported a greater turnover of fixed-term workers, while others had even decided to reduce their use of fixed-term employment contracts due to the increased bureaucratic procedures arising from the directive.

Moreover, many employers are less likely to employ unskilled fixed-term workers after the regulatory changes; this suggests that the directive has paradoxically had a negative effect on such fixed-term workers. It also raises questions over whether the directive has actually improved the working conditions of fixed-term workers, although the misuse of fixed-term contracts has reportedly declined and employers tend to recruit fixed-term workers for permanent jobs more often than before.

Working conditions of fixed-term workers

The directive also appears to have had a relatively limited impact on the working conditions of fixed-term workers. Many of the employers have reportedly failed to comply with the directive’s objectives. Such objectives include the principle of non-discrimination, employers’ obligations to inform fixed-term workers about vacancies, to facilitate their access to further training and to take this type of employee into account when calculating the threshold for worker representative bodies.

For example, only 51% of the workplaces covered in the study regularly informed their fixed-term workers about vacancies; even fewer (16%) regularly offered fixed-term workers permanent positions after their contract expired. In addition, many fixed-term workers were never invited to seminars and had no access to further training – even though the directive specifically stipulates that employers should facilitate further training among workers with fixed-term employment contracts. Nonetheless, 78% of the employers invited fixed-term workers who held positions comparable to permanent staff to work meetings and annual events; about 40% of the employers gave fixed-term workers access to further training, while a further 51% invited them to seminars.

A significant proportion of fixed-term workers have no rights to pension schemes, paid maternity leave, positions as trade union representatives, other work-related benefits and local wage negotiation, according to their employers. In fact, fixed-term workers often receive the minimum wage, even if they have considerable experience in their field. In some instances, trade unions were even opposed to employers giving their fixed-term workers more than the minimum wage. This suggests that the principle of non-discrimination has been transposed into practice only to a limited extent, thus having only a partial impact on the working conditions of fixed-term workers.

Response of social partners

Arising from the results of the aforementioned study, social partners in the local government sector plan to initiate a new information campaign regarding fixed-term workers’ rights; at the same time, they intend to inform employers about the rules and procedures regarding fixed-term workers through a set of guidelines for good practice. These guidelines will be published alongside the study, according to KL and KTO.

Commentary

The limited impact of the Directive on fixed-term work at company level is not unusual in the context of EU regulation. In fact, a series of studies has shown that EU legislation often fails to permeate down through the system. However, compared with other European regulation methods, such as the open method of coordination (OMC) and European social partners’ autonomous agreement s, the directive appears to have had a more significant impact; for instance, Member States often fail to implement policies regulated through the OMC. Likewise, the social partners’ implementation of autonomous agreements is relatively poor, particularly at sectoral and local level. This suggests that the implementation of EU directives is relatively more successful than other types of EU regulation.

Trine P. Larsen, FAOS