Commission seeks to encourage debate on new forms of work organisation

The European Commission adopted a Green Paper on new forms of work organisation on 16 April 1997. This document aims to encourage debate on this issue among interested parties across Europe. This feature outlines the main arguments and questions presented in the document, details initial reactions from the social partners and seeks to assess to potential for drawing up a European model of work organisation.

The European Commission adopted a Green Paper entitled Partnership for a new organisation of work on 16 April 1997. This document aims to launch a Europe-wide consultation process on how to improve employment opportunities and competitiveness through a better organisation of work. In it, the European Commission argues that such a new European model of work organisation should be based on the principles of high skill, high trust and high quality.

The importance of flexibility and partnership

The Green Paper invites the social partners, public authorities and other interested bodies to provide inputs to a framework designed to encourage European firms to render work organisation more flexible while at the same time improving security for workers. It recognises the particularly important role played by the social dialogue and collective bargaining in arriving at such new arrangements, which are mutually acceptable and innovative. In particular, the Commission stresses its desire to obtain information on examples of good practice in the area of partnerships for new forms of work organisation.

The Green Paper emphasises the importance of the development of an integrated approach in relation to other Commission initiatives relating to employment and competitiveness, taxation and social protection issues, the information society, worker involvement, macroeconomic and structural policies, and education and training. It refers, in particular to the Essen conclusions and the European employment strategy (EU9702101F) which have repeatedly stressed the need for the introduction of more flexible forms of work organisation in order to meet the needs of employers and employees. Other recent key documents referred to here are the Green Paper on Living and working in the information society and the White Paper on Teaching and learning: towards a learning society.

The Commission emphasises that the modernisation of the organisation of work can be achieved only by firms themselves, involving management and workers, and their representatives, and taking into account the diverse nature of each sector and company.

Forces behind changes in work organisation

The Green Paper argues that the organisation of work has moved on from being based on a hierarchical top-down model with a high specialisation of tasks, which was prevalent in the early industrial age of mass production, but stresses that much remains to be done if European companies are to adapt to the competitive challenges of the global market. The Commission sees the three main "drivers" behind this change as being the following:

  • human resources should no longer to be viewed in the same light as land and capital - a cost to be reduced. In the "knowledge economy", staff represent a key resource and better initial, vocational and continuing education is seen to be the key to harnessing this potential. Equally important are the ability to interact with new technology and the development of effective communication skills needed for team working;
  • markets face the need to adapt to rapidly changing demands by consumers no longer willing to accept standardised products. Companies therefore need to be flexible and to adapt quickly; and
  • technology is driving many of the changes in the workplace and requires an integrated approach, as well as fostering more flexible work organisation.

A large number of companies have already responded to these challenges by introducing and developing new models of work organisation such as team working, quality circles, "just-in-time" systems, lean production, total quality management and so on. The Commission praises in particular the advantages of flatter management structures and worker involvement, which it argues can allow the flow of knowledge, ideas and learning throughout the company and improve quality and employee motivation.

Despite these innovations, the Commission perceives that larger firms often retain their old hierarchical structures, while small and medium-sized enterprises (SME s) - which are better able to meet these challenges - often do not have sufficient resources to support their planning processes.

Social justice considerations

The Commission acknowledges that not everyone is equally well placed to benefit in the knowledge society and therefore balances have to be struck between: younger and older workers; the educated and the less well educated; the need for high production levels and the health of workers; and flexibility and security. The latter is particularly important for younger and older workers, other disadvantaged groups, as well as atypical employees. The Green Paper underlines the importance of the achievement of positive outcomes for all these groups in the redefinition of work organisation.

Labour law and industrial relations

The Green Paper highlights that new forms of work organisation call into question the foundations upon which existing labour law and industrial relations are built. The concept of the workplace, the firm and the standard employment relationship are in flux and are constantly being redefined. This raises questions about what the balance should be between legislation, collective bargaining and individual contracts - a question which the Commission sees as being at the heart of the debate in European industrial relations. As the balance between the state and social partner agreements changes, the issue of information and consultation is becoming increasingly important (and is the subject of a number of current Community initiatives). The participation of employees in profits and company results is also a key concern which was recently reaffirmed by the Commission in the PEPPER II report (on the promotion of participation by employed persons in profits and enterprise results - EU9702106N).

Changes in wage systems and working time

The Green Paper argues that wage systems continue to be the financial expression of a hierarchical and rigid task structure, and require reform. Where new wage systems have been introduced, they have been linked to wider job descriptions and reductions in the number of pay grades, incentives to acquire extra qualifications, a leveling out of white-collar and blue-collar grades, and an emphasis on equal pay for part-time and full-time staff, as well as for women and men.

Working time has long been the subject of debate among the social partners and policy-makers. Such discussion have, according to the Commission, centred around the following questions: how is working time to be adapted to meet the needs of the company as well as the individual? and is reduction in working time capable of generating employment? Developments in recent years have seen a decoupling of working time from plant operating hours, the annualisation of working time, increases in part-time work, and the introduction of flexible leave arrangements throughout working life.

Systems of taxation and social protection

The Green Paper is concerned that current taxation systems can unwittingly give employers the incentive to maintain traditional work arrangements and encourage the use of overtime instead of new hiring, and it seeks to investigate how such shortcomings can be remedied. Similarly, existing social security systems continue to be very much based around the concept of full-time employment which is lifelong and permanent, thus providing disincentives for both employers and employees to embrace new forms of working. The reform of systems of social protection has recently been the subject of a Commission communication (EU9705124F) and is currently under review.

The environment, health and safety and gender equality

The Green Paper briefly touches on the issues of health and safety and the working environment. Such considerations are seen to be particularly important with the expansion of subcontracting and the increasing numbers of SMEs where responsibilities become blurred and competencies may be lacking.

In the area of equal opportunities, recent labour market changes are seen to have been advantageous for women, as their participation in paid employment has increased. However, it is acknowledged that much remains to be done to embed and indeed "mainstream" equal opportunities. This is to be achieved through measures including the improvement of childcare provisions, better transportation systems, a more even gender balance in decision-making, and the individualisation of rights.

The Commission's questions

In seeking to develop a new framework for work organisation, and presumably in order to shape its priorities for its new medium-term social action programme, the Commission is seeking responses to the following questions.

  1. Do you share the views expressed on the evolution of the organisation of work and the main driving forces behind the new developments? Are there other factors which should be included?
  2. What is your experience of firms that have introduced new forms of organisation of work? Are there particular experiences in respect of small firms, which would you like to mention?
  3. Are there examples of new business strategies, which appear more successful in dealing with such change?
  4. How can firms which seek to introduce new forms of work organisation optimise their investment in human resources?
  5. What are the obstacles, including accounting and tax constraints, to the promotion of investment in human resources?
  6. How should the current legal framework be modernised to take account of new employment trends?
  7. Which types of workers' involvement mechanisms could contribute to successful strategies on technical and organisational change?
  8. How would the development of direct worker participation affect the role of bodies or organisations representing workers?
  9. What experiences do you have with changes in payment systems?
  10. What innovations are taking place, in particular by means of collective bargaining?
  11. What contribution do you consider that a reduction and adaptation of working time can make to the improvement of growth, productivity and employment?
  12. What is the scope for agreement at sectoral level on working time arrangements? Are other levels more appropriate?
  13. What reforms are necessary to taxation systems in order to avoid the disincentive effects?
  14. What adaptations are necessary to social security rules to stimulate more innovative forms of work organisation?
  15. What impacts, both favourable and detrimental, are the new forms of work organisation, flexibility in working time and employment contracts, having on health, safety and job environment of workers and for the management of these issues?
  16. What more can be done to ensure that a better gender balance is achieved through the development of a new organisation of work?
  17. How far will the growing participation of women in the labour market have an impact on work organisation?
  18. What practical steps can be taken to ensure a better use of the potential of all our people in the new organisation of work?
  19. How do you consider that the contribution of the structural funds, and in particular Objective 4, could best be optimised to promote a better organisation of work?

Comments on the Green Paper should be sent by 30 November 1997 to European Commission, DGV, Rue de la Loi, B-1049 Brussels, or by e-mail to DG5-Partnership@bxl.dg5.cec.be,.

Responses from the social partners

The European Trade Union Confederation (ETUC) welcomes the Green Paper as a useful contribution to the debate on new forms of work organisation and the future of work, and finds itself in agreement with the document's emphasis on partnership, participation and the importance of marrying flexibility with security. While ETUC is pleased to see the importance attached to employment creation, it argues that the Green Paper should have said more about how employment is to be created through these new forms of work organisation. ETUC would also like to have seen further acknowledgement of existing or ongoing research projects on group work and direct and indirect participation.

For ETUC, the involvement of employees and their representatives is a key factor in the negotiation and establishment of new working practices, and it expresses the hope that the consultation process surrounding this Green Paper will led to the setting of "benchmarks" for the development of an original European way or model for the organisation of work based on partnership. It should also lead to concrete policy proposals which should be annexed to the next medium-term social action programme. These could be based on a collection of examples of best practice and the qualitative analysis of such case studies, as it is currently being carried out by the European Foundation for the Improvement of Living and Working Conditions on a sectoral basis.

ETUC is also keen on the establishment of links and the integration of Community policies on education, training and lifelong learning and labour market and employment policies. It welcomes the parameters of high quality, high skill and high security as outlined in the Green Paper as the foundations for a European model of work organisation. At company level, it favours the model of project-oriented work tasks, self-directed team work and flat management structures in order to achieve improvements in quality, productivity, efficiency and employee satisfaction. The negotiated reorganisation of working time is also seen to be of importance, particularly for the achievement of equal opportunities for men and women. However, improved care facilities for the care of children and older people, as well as other flexibility measures to assist women (and men) in developing their career opportunities, are seen to be equally necessary. ETUC is keen to stress to importance of including unemployed individuals and disadvantaged groups in training and career development schemes to prevent the formation and extension of a two-tier labour market and society.

According to ETUC, the question of how to ensure positive flexibility and so balance flexibility and security is a complex matter. In order to make job security real, it argues that the following issues have to be addressed:

  • the employment contract;
  • employability;
  • the social responsibility of undertakings;
  • active labour market policies; and
  • adequate social protection systems

At the time of writing, the Union of Industrial and Employers' Confederations of Europe (UNICE) had not prepared its formal response to the Green Paper. However, a spokesperson for UNICE underlined the European employer organisation's view that the issue of work organisation ought to be dealt with at company level, and that companies were indeed already doing this as they are best suited to respond to the competitive challenges they are faced with on a daily basis. He warned of the over-use of generalisations and slogans such as "flat management structures", as are prevalent in the Green Paper, and emphasised the need to understand national, regional, local and indeed company traditions before being able to superimpose any new forms of work organisation. Judging from the experience of companies which have sought to introduce new styles of management and work organisation which had not grown from within the culture of the undertaking, it would appear that such attempts often fail. The concept of the development of a European model of work organisation therefore has to be called into question. UNICE is keen to consult as widely as possible with its members on the Green Paper and anticipates formulating an official opinion later in the year.

Commentary

The Green Paper does not present any essentially new ideas but can be seen as a useful step towards the integration of different Community initiatives and policies, relating in particular to the employment implications of the information society, European initiatives on education, training and lifelong learning, the reform of systems of social protection and of systems of taxation. Equally relevant are the debates surrounding the activation of passive labour market policies, the regulation of atypical work and systems for information and consultation of employees and their representatives.

If one is to design a European model of work organisation, it is clear that all these factors have to be addressed in order to come up with a meaningful framework. It therefore seems likely that the new medium-term social action programme will feed from the ideas generated by the consultation processes currently underway on many of the issues outlined above, in order to guide Community action in the years to come.

However, the basic question raised by the Green Paper - how to reconcile companies' need to achieve flexibility with employees' desire to retain job security - is as old as industrial society itself and will not easily be resolved by means of a consultation process. The much heralded vision of a high-skill, high-quality and high-security knowledge economy is one which is repeatedly evoked by the European Commission and which has almost become a panacea for its approach to labour market and social policy. While this is laudable in itself, there are many issues which remain insufficiently explored. In its enthusiasm for the benefits of the information society, the impact of these developments on working conditions, employment security and health and safety remain insufficiently explored. There is also little exploration of the question of the extent to which this vision reflects the day-to-day reality in European companies. The significance attached to training is clearly of key importance, but the financing of such measures is an issue which clearly requires further thought and investigation.

It will be interesting to see whether the consultation process on the Green Paper generates any consensus and examples of good practice which can be drawn on to develop policy programmes and proposals at European level. (Tina Weber, ECOTEC)

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