EMCC European Monitoring Centre on Change

Denmark: Young people and temporary employment in Europe

  • Observatory: EMCC
  • Topic:
  • Published on: 08 December 2013



About
Country:
Denmark
Author:
Carsten Jørgensen
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

Young people in Denmark in temporary jobs do not receive particular attention when it comes to labour market transition measures aiming tobring people into permanent jobs. The existing support measures are aimed at young people as a whole or have no age limit.

Introduction

Youth unemployment has been a persistent problem in many parts of Europe for many years. Over the past 3-4 years, however, since the onset of the financial crisis and the economic recession which followed, it has become an even greater and more widespread problem and one which, given the on-going depressed state of the European economies, is likely to remain for some time to come. The latest monthly figures (for September 2012) show the unemployment rate of those aged 15-24 averaging 22.8% in the EU – just over 1 percentage point higher than at the time a year earlier. In Spain, the figure was over 54% and in Greece, 57%, in both cases, much higher than a year earlier. In the worst affected countries, therefore, as in most Member States, there is very little sign of any easing of the youth unemployment problem. There are, however, a few exceptions. In Germany, in particular, youth unemployment has declined since the global recession hit in 2009 and now stands at only 8%, well below the level it was before the recession. In Norway too, the rate is only 8%, though this is slightly above the level in 2007 before the crisis. Germany, apart, there are two other countries in the EU with youth unemployment below 10% according to the latest monthly figures - the Netherlands (9.4%) and Austria (9.9%). As in Norway, in both cases, the rate is above the pre-crisis level.

Moreover, young people who do manage to find jobs often have to settle for a temporary one, defined as one with a fixed-term contract of employment. According to the European Labour Force Survey (LFS), in 2011, just under 43% of employees under 25 were in temporary jobs in the EU and well over half in Germany (56%), France (55%), Portugal, (57%), Sweden (57%), Spain (63%), Poland (66%) and Slovenia (75%). (In Norway, the figure was much lower than in most EU countries, at around 24%.) While around 40% of the young people concerned on average were in temporary jobs because they had a fixed-term training contract and another 9% were on probationary contracts, a substantial proportion (37% on average) were in temporary jobs because they were unable to find permanent ones. In the Czech Republic, Cyprus and Portugal, this figure was over 75% and in Spain and Slovakia, well over 80%.

Among young people making the transition from education or initial vocational training into employment, the proportion who takes up temporary rather than permanent jobs is much higher than for the age group as a whole. In 2011, 57% of those aged 15-24 in employment who were in education the previous year were in temporary jobs in the EU and 86-87% in Spain, Portugal and Poland. For those moving from unemployment into employment, the proportion who takes up temporary jobs is even higher on average in the EU (61%) as well as in Spain (90%).

The fact that a relatively large proportion of young people in employment are in temporary jobs may be a reason why they have been hit disproportionately hard by the crisis. In the economic downturn in 2009, many of the people who lost their jobs first were on fixed-term contracts since not renewing these contracts represented the easiest way for employers to reduce their work forces. In 2009, therefore, there was some decline across Europe in the proportion of young people in work employed in temporary jobs (see the Tables attached to the questionnaire). Since then, there has been some tendency for the proportion to increase again, in part perhaps because employers are reluctant to take on people on permanent - or standard – contracts given the uncertainty about future economic prospects.

Given the above, it is understandable that there is growing public interest, and some concern, over the nature of the jobs that young people are taking up. This concern is mirrored at EU-level where a ‘flexicurity’ approach to labour market policy has increasingly been advocated, which, in practice, means that while flexibility is an important objective, it needs to be accompanied by protection of workers’ interests if it is not to lead to a growth of precarious employment in low quality jobs. Accordingly, there is a need to obtain a better understanding of the terms and conditions applying to temporary jobs, the extent to which they are a stepping stone to permanent jobs and a working career in line with a person’s qualifications and capabilities, the access to social protection which comes with them and the measures in place to encourage employers to convert them into more stable jobs. These issues form the focus of the present study.

Definition of temporary jobs

The interest in the study is in all young people employed in temporary jobs of whatever kind, in the sense of all jobs that they are not subject to a standard contract of employment which is normally one of indeterminate length, or at least one for which no specific length is specified. Such temporary jobs can be for a period of training (i.e. traineeships or apprenticeships) or probation, intended to enable employers to check the suitability or aptitude of people for the jobs concerned. They might also be to replace someone on maternity leave or on a training programme or they might relate to a specific project of fixed duration.

All such jobs and others which are of fixed duration should be covered, whether they are part-time or full-time and irrespective of whether they are specifically for young people (such as perhaps in the case of traineeships or apprenticeships) or for people of all ages which young people happen to be doing. In some cases, it should be noted, it is relevant to include, in addition, to temporary employees, the ‘bogus’ self-employed – i.e. those people who have self-employment status but who are contracted to work for a single employer and who are effectively similar to employees who have a fixed-term contract of employment. (The cases in question relate to instances where employers use self-employment contracts as a means of employing young people without bearing the costs, and obligations, of a standard contract of employment.)

Outline of study

The study is divided in three sections. The first is concerned with the main types of job in which young people who are employed under temporary contracts work and the reasons why employers choose to use temporary contracts of employment instead of standard ones when they take on young people, as well as with the link, if any, with labour market conditions (i.e. with the extent to which the crisis has led to an increase in temporary employment). The starting point is the data summarised above, derived from the LFS, which indicate the relative number of young people employed on temporary contracts in the different European countries and the way that this has changed over the recent past (these data, as noted, are set out in the tables attached to the questionnaire). Correspondents are asked to check these data against any national data on temporary employment and to indicate where these show a different picture from the LFS data, perhaps because a different definition is adopted of temporary jobs.

Any description or commentary on national statistics should, however, remain brief, since the main task of the first section, is to review and summarise relevant sources of information on the different kinds of temporary contract under which young people are employed in each of the countries, the circumstances and areas (the types of job and the sectors of activity) in which they tend to be used and the main reasons why employers adopt them.

The second section is concerned with the access to social benefits which temporary jobs provide, distinguishing between the various kinds of benefit, and with the extent to which entitlement to benefit differs for young people employed in temporary jobs from that for those employed under standard contracts of employment. It should be emphasised that the concern is not only with the formal regulations which apply, which in many if not most countries do not make a formal distinction between temporary jobs and others, but also with de facto entitlement which stems from the nature of temporary employment. In particular, young people in temporary jobs may have difficulty in complying with the need to have a continuous period in employment, or a continuous record of paying social contributions, in order to be eligible for unemployment benefit.

The third section is concerned with the measures in place to regulate the use of temporary contracts of employment (such as specifying the number of times they can be renewed), with the attitudes of government and the social partners towards their use and with the incentives which exist to encourage the wider use of standard contracts of employment and the conversion of temporary jobs into permanent ones. A particular point of interest is the extent to which regulations and attitudes as regards temporary jobs have changed over the crisis period as the number of jobs available for young people to take up has diminished and as expanding these has become a policy priority.

A final point to note is that while it is customary to define youth employment (and unemployment) in terms of those aged 15-24, it is also the case that many of those aged 25-29 are also employed in temporary jobs, as indicated

in the attached tables. Correspondents are therefore asked to extend the coverage of the study to this age group where relevant. It is recognised that in some countries the statistics available may not relate precisely to the age groups specified here, in which case correspondents should report on the age groups nearest to these.

Questionnaire

1. Importance of temporary employment for young people

1.1. Do the figures shown in the attached tables (on the number of temporary employed as a % of total employees based on Eurostat LFS data) give a reliable indication of the scale of temporary employment among the young in your country and the way that it has changed over recent years? Are there young people employed in temporary jobs that do not show up in the Eurostat figures? Are there national statistics which show a different picture from the Eurostat data? If so, please indicate what they show and give the source of the data.

Figures from the national statistics, i.e. Statistics Denmark, correspond with the Eurostat figures concerning the 15-24 years of age except for a few digits. The particular table is the national labour market survey (Statistikbanken, AKU601, Employees according to length of contract, age and gender).The following category in the same table is the 25-34 years of age and not as in this questionnaire 25-29 years. However, since the first table was corresponding combined with the fact that it is Statistics Denmark that delivers the figures to Eurostat, there are reasons to believe that all figures are corresponding.

1.2. Is there any evidence that other forms of employment are used as a substitute for temporary contracts, such as bogus self-employment where young people are contracted to provide services to a single work provider in a continuous manner so acting de facto as employees? If so, please give the source of the evidence and indicate the scale of the phenomenon in terms of the number of people concerned.

There is evidence that some young people between 15-29 work as ‘bogus self-employed’ as defined in this questionnaire. It is in the nature of things difficult to bring statistical evidence about how many young people work as bogus self-employed. The cartel in construction (BAT-kartellet) is trying to make an overview of the number of bogus self-employed in total, but do not have specific data on young people. Furthermore, it is known that there is a number of bogus- self-employed in the graphic industry.

1.3. Please list (and give summary details, i.e. purpose and duration of the contract) the most common contract types or contractual arrangements under which young people are employed on a temporary basis (such as for traineeships, apprenticeships, probationary periods, replacement of workers on leave or projects of a fixed duration). What is the relative importance of each type of contract or arrangement in terms of the number of young people employed under them?

The Labour Force Survey of Statistics Denmark operates with three categories that more or less cover the sought-after in this questionnaire. It is part-time work, fixed term work and work under 15 hours a week. Most of the people numbering these categories are under 30 years of age (i.e. category 15-29 years). Part-time workers are mostly women under 30 years, that is 14% of all employed, and around 8% of all employed are men working part-time. Part-time is here understood as less hours than the normal full-time week of 37 hours, i.e. from 36 hours and below. And further..

  • Fixed term contracts (15-29 years): 4% women , and 5% men
  • Under 15 hours a week (15-29 years): 10% women, 6% men

In comparison, 14% of all full-time workers are men under 30 years, in contrast to 10% women

Traineeships and apprenticeships are part of a full-time education scheme and are not considered temporary work.

1.4. Please indicate the main reasons for the emergence and development of the different types of temporary contract which you have listed in response to question 1.3. To what extent are they linked to particular conditions in the labour market or employment protection legislation/regulation in your country? What is the main attraction of such contracts to employers? What effect has the crisis had on the use of such contracts?

They are more linked to ‘particular conditions at the labour market’ than to employment protection/regulation. For some young people the choice of working on a temporary contract is not taken on an entirely voluntary basis. This goes in particular for fixed-term contracts and to a lesser degree work under 15 hours a week and for part-timers that even in the case of women is a private choice. Another characteristic is that among the young people many are students that work on a temporary contract beside the studies.

1.5. To what extent are temporary contracts a ‘stepping stone’ to ‘permanent’ jobs (or those with standard contracts of employment of undefined duration)? Are apprentices and trainees typically taken on by the companies or other organisations concerned on standard permanent contracts once they complete their training? Has the situation changed over the crisis period? Please summarise any relevant studies which have been carried out in your country or other evidence at the national level which exists and give the reference to them.

It is difficult to decide to which extent temporary contracts are the direct reason for a permanent job. There are no figures available. I would estimate that there are relatively few examples of temporary jobs that lead to a permanent job in the same company, or even in the sector. A temporary job of any kind could be the solution for a young person that is waiting for a job within his or her own occupation.

In the case of apprentices, it should be noted that they are not seen as working on ‘temporary jobs’, they are part of a vocational training programme that explicitly should lead to a job. Apprentices start at school and then go into apprenticeship in a company that in most cases will employ the apprentice after terminated training. Since mid00s there has been a significant decrease in the number of apprenticeships available, which has created a bottleneck and resulted in many drop-outs from the vocational training programmes. It has also opened for ‘school-apprenticeship’ but it is not estimated among employers as equivalent to the ‘real’ apprenticeship in the companies. Currently there is a small decrease in the number of apprentices waiting for a company to give a positive answer. Still 5,395 are waiting for an employer to hire them as an apprentice, which is a decrease of 10% in relation to 2011. New figures from January 2013 show that 84,000 had started a vocational training programme and of those 77,000 had an agreement with a company. 5,000 were beginning in ‘school apprenticeship’ (Ministry of Education).

Studies:

  • Denmark: EIRO CAR on ‘Helping young workers during the crisis: contributions by social partners and public authorities.’
  • Denmark: ERM CAR on NEETs - Young people not in employment, education or training: Characteristics, costs and policy responses in Europe.



2. Access to social benefits

2.1. Does entitlement of young people to (contributory) unemployment insurance benefits and (non-contributory) unemployment assistance (i.e. benefits, usually means-tested, which provide a minimum level of income) differ if they are employed on temporary contracts as opposed to permanent ones? If so, please indicate briefly the differences in eligibility conditions and any differences between types of temporary contract (including those working as self-employed for a single employer). Have there been any changes over the period of the crisis?

There are no special rules for young people regarding unemployment benefits or assistance. It is the periods of employment/unemployment that governs the right to unemployment benefits and the right to regain unemployment benefits after a number of weeks in employment – and not the type of contract. In a job under 30 hours it is possible to receive supplementary unemployment benefits in maximum 30 weeks. The amount paid is the difference between the hours worked and 37 hours that is the normal weekly working hours.

However, it is part of the efforts to support young people not in employment, education or training to offer employment or training as short time as possible after they have contacted the jobcentre as unemployed.

2.2. Does entitlement of young people to sickness benefits and maternity benefits differ if they are employed on temporary contracts as opposed to permanent ones? If so, please indicate briefly the differences in eligibility conditions and any differences between types of temporary contract (including those working as self-employed for a single employer). Have there been any changes over the period of the crisis?

Young people working on temporary contracts have the same statutory rights to sickness benefits and maternity leave benefit (or other social benefits) as others in employment – or unemployed for that matter. However, the number of hours works in the previous 12 months influences the actual amount of the benefit. Anyway, there are no special rules concerning young people.

2.3. Are there any differences in the entitlement of young people to old-age pensions between those employed in temporary jobs as opposed to permanent ones? If so, please indicate what these are. Have conditions of eligibility to pensions changed over the period of the crisis (including through pension reforms introduced as part of a long-term strategy to improve the financial sustainability of the system)?

All persons have the right to receive an old-age state pension. The size of the occupational/labour market pension will depend of the collective agreement, if any. Again, no special rules concerning young people in temporary jobs.

2.4. Are there any differences in entitlement of young people to health care between those employed in temporary jobs as opposed to permanent ones? If so, please indicate what these are. Have conditions of eligibility to health care changed over the period of the crisis?

No.

There exists company-related employer paid health insurances only covering permanent-contract employees. However, neither in this case there are special rules concerning young people.

3. Regulation of temporary contracts and policies to support transitions into permanent contracts

3.1. Please describe briefly the regulations applying to the main types of temporary contract in your country. Do restrictions exist on the maximum duration of the different types of temporary contract for young workers or the number of times they can be renewed? Do these regulations differ by age (i.e. between young people and older workers) and/or by type of temporary contract (as mentioned in question 1.3), by occupation, or by sector of activity? Do special regulations exist for those completing apprenticeships or traineeships? Have the regulations changed over the period of the crisis – i.e. has there been a tendency for them to have been tightened or relaxed?

First of all, regarding regulation of temporary contracts and policies to support transitions into permanent contracts, there are no specific rules covering young people only, except in the case of the vocational training contracts. Except the employment relation between the apprentice/trainee and the company, there are no jobs limited to young people only.

There is no specific maximum duration of a temporary contract (and age is not relevant). In the public sector there is a rule determining that a person can only be employed five times under the same temporary contract. Hereafter the person is either hired in a complete other temporary job, not re-employed or employed on a permanent basis in the same job regardless of the number of hours.

These regulations, as others, do not differ by age, nor by type of contract. However, there might be small differences in the collective sector agreements concerning this regulation.

3.2. Do incentives exists in your country to encourage employers to opt for standard rather than temporary contracts of employment, to convert temporary contracts into permanent ones or to make it easier for employees to move from temporary to permanent contracts? If so, please briefly describe the form that these incentives take. Do they apply equally to young people as well as to older workers? Are any incentives in place to encourage employers to take on young people who have completed an apprenticeship or traineeship on permanent contracts? Have there been any changes to incentives over the period of the crisis? Are any such changes being proposed or being actively discussed at present in your country?

In connection with the State Budget 2013, there are among the measures to anticipate restructuring also economic support measures that encourage employers to take in young people that has just finished an education. This concerns for instance companies in construction that will receive a fixed amount for hiring a newly trained workman. It also concerns SMEs that will hire a newly educated academic.

However, these measures are targeted at young people that have just finished an education, not young people in temporary jobs in particular.

Regarding apprenticeships, the economic support is also targeted employers that will accept an apprentice in training in the company. The economic support is quite high and covers both a fixed amount for taking in an apprentice and a smaller wage subsidy.

These measures are the latest in a row of so-called ‘special youth efforts’ that was initiated around ten years ago. They aim at bringing young people into full-time jobs or in further education – and thus also covers young people that has finished a specific education but only has an unspecific temporary job.

The situation around the apprentices has had a lot of attention, political as well as from the social partners. It is seen as very important that the young people in vocational training actually get an apprenticeship so they can finish the training programme – not only to the benefit of the young person, but also to the benefit of the relevant sectors that currently are losing interest from young people because of lacking apprenticeships. And finally to the benefit of a country, i.e. Denmark, that cannot afford to ‘lose a generation’ focussed as it is on education, education and more education. The employers role in this connection seems to be that they hire those they can afford to hire, even if the employer organisations support the apprentice initiatives. The government plans campaigns aiming at informing the employers about the economic support measures available.

In some sectors, as agriculture among others, apprentices are hired as cheap labour. The unions have brought many cases to Labour Court.

3.3. Is the employment of young people on temporary contracts an important issue of concern for the social partners? Are there strong differences in attitudes and policies between employers and trade unions towards the use of temporary contracts? Have any initiatives been taken by the social partners, either jointly or separately, to encourage the use of permanent rather than temporary contracts? Have any specific initiatives been taken in respect of young people completing apprenticeships or traineeships over the types of job they are offered when their temporary position comes to an end?

For the last question, see 3.2.

Traditionally, the Danish unions have targeted their efforts at the full-time employed or at bringing people into full-time employment. This means ironically enough that temporary workers appear as outsiders in relation to membership of a union and coverage of a collective agreement. Thus, they do not enjoy the full protection as the full-timers in permanent jobs do. This attitude has changed a little the recent years. The traditional unions have realised that the employment patterns are changing from mostly full-time permanent jobs into many different kinds of temporary or short-term contracts. However, it is still the number one effort of the unions to create full-time permanent jobs in order to increase employment.

The employers look differently at the type of contracts. According to the employer associations there is no such thing as ‘an atypical job’. A job is a job and different types of contracts support flexibility. On the other hand, during the economic crisis, the first employees to be made redundant were the casual or temporary workers in order to keep the core workers on permanent contracts in the company.

Temporary employees as a share of total employees aged 15-24, 2004-2011

 

% total employees

% point change

 

2004

2007

2009

2011

2004-2007

2007-2009

2009-2011

2007-2011

EU27

37.6

41.3

40.4

42.5

3.7

-0.9

2.1

1.2

BE

28.6

31.6

33.2

34.3

3.0

1.6

1.1

2.7

BG

15.3

10.3

9.3

8.3

-5.0

-1.0

-1.0

-2.0

CZ

18.0

17.4

18.7

22.3

-0.6

1.3

3.6

4.9

DK

26.9

22.5

22.8

22.1

-4.4

0.3

-0.7

-0.4

DE

55.5

57.4

57.3

56.0

1.9

-0.1

-1.3

-1.4

EE

:

:

:

13.8

 

   

 

IE

11.2

20.5

25.0

34.2

9.3

4.5

9.2

13.7

EL

26.3

27.0

28.4

30.1

0.7

1.4

1.7

3.1

ES

64.8

62.8

55.9

61.4

-2.0

-6.9

5.5

-1.4

FR

46.7

53.5

52.4

55.1

6.8

-1.1

2.7

1.6

IT

34.4

42.3

44.4

49.9

7.9

2.1

5.5

7.6

CY

16.1

23.3

18.4

17.2

7.2

-4.9

-1.2

-6.1

LV

17.3

9.3

9.3

10.7

-8.0

0.0

1.4

1.4

LT

13.8

9.8

5.0

9.1

-4.0

-4.8

4.1

-0.7

LU

24.1

34.1

39.3

34.5

10.0

5.2

-4.8

0.4

HU

15.1

19.1

21.4

22.9

4.0

2.3

1.5

3.8

MT

9.2

11.0

11.3

17.7

1.8

0.3

6.4

6.7

NL

37.9

45.1

46.5

47.7

7.2

1.4

1.2

2.6

AT

32.4

34.9

35.6

37.2

2.5

0.7

1.6

2.3

PL

60.6

65.7

62.0

65.6

5.1

-3.7

3.6

-0.1

PT

47.4

52.6

53.5

57.2

5.2

0.9

3.7

4.6

RO

6.6

4.6

3.7

5.8

-2.0

-0.9

2.1

1.2

SI

63.1

68.3

66.6

74.5

5.2

-1.7

7.9

6.2

SK

9.9

13.7

12.5

18.6

3.8

-1.2

6.1

4.9

FI

49.8

42.4

39.0

43.4

-7.4

-3.4

4.4

1.0

SE

53.1

57.1

53.4

57.3

4.0

-3.7

3.9

0.2

UK

11.0

13.3

11.9

13.5

2.3

-1.4

1.6

0.2

NO

31.2

28.0

25.7

24.3

-3.2

-2.3

-1.4

-3.7

Source: Eurostat, Labour Force Survey

         
Temporary employees as a share of total employees aged 25-29, 2004-2011

 

% total employees

% point change

 

2004

2007

2009

2011

2004-2007

2007-2009

2009-2011

2007-2011

EU27

19.5

21.1

20.2

21.4

1.6

-1.0

1.2

0.2

BE

12.4

13.1

12.5

14.6

0.7

-0.5

2.0

1.5

BG

9.0

5.3

4.4

4.2

-3.8

-0.8

-0.2

-1.0

CZ

9.8

8.1

8.4

10.8

-1.7

0.2

2.5

2.7

DK

16.5

13.9

13.8

16.4

-2.6

-0.1

2.7

2.5

DE

17.2

21.2

21.2

22.0

4.0

0.0

0.8

0.8

EE

3.0

1.8

4.2

4.2

-1.2

2.4

0.0

2.3

IE

3.4

10.1

9.5

12.7

6.7

-0.6

3.2

2.6

EL

18.4

16.1

19.9

19.0

-2.3

3.8

-1.0

2.9

ES

44.0

41.2

37.5

39.8

-2.7

-3.7

2.3

-1.5

FR

18.3

20.8

20.2

22.0

2.5

-0.6

1.8

1.2

IT

17.2

22.7

23.5

26.7

5.5

0.8

3.2

4.0

CY

19.2

17.7

16.2

18.1

-1.5

-1.5

1.9

0.4

LV

11.8

3.2

4.2

5.5

-8.6

1.0

1.4

2.3

LT

5.3

4.2

2.5

3.6

-1.1

-1.7

1.1

-0.6

LU

7.6

12.5

11.2

12.7

4.9

-1.2

1.5

0.3

HU

8.1

8.9

11.3

11.0

0.8

2.5

-0.3

2.2

MT

1.1

5.6

5.0

6.3

4.6

-0.6

1.3

0.6

NL

16.8

22.9

24.2

25.8

6.1

1.2

1.7

2.9

AT

10.0

8.8

9.6

9.8

-1.1

0.8

0.2

1.0

PL

33.8

38.7

35.6

38.9

4.9

-3.1

3.3

0.2

PT

30.3

36.6

38.6

39.2

6.3

2.0

0.6

2.6

RO

3.4

2.1

1.2

2.1

-1.3

-0.9

0.9

0.0

SI

30.7

33.7

34.1

33.9

2.9

0.4

-0.2

0.3

SK

6.8

5.7

4.1

7.7

-1.2

-1.6

3.7

2.1

FI

28.7

24.5

25.5

26.0

-4.2

1.1

0.5

1.5

SE

24.0

27.4

24.0

25.0

3.4

-3.3

1.0

-2.4

UK

6.2

7.1

6.3

5.0

0.9

-0.8

-1.3

-2.1

Source: Eurostat, European Labour Force Survey

       

Carsten Jørgensen, FAOS, University of Copenhagen

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