Social responsibility of enterprises examined

Danish companies are demonstrating increased social responsibility towards various groups of people who might otherwise have difficulties in finding a job. However, in some other areas the social responsibility of enterprises has been declining. These are among the main findings of an annual study published by the Danish National Institute of Social Research in November 2001.

In November 2001, the Danish National Institute of Social Research (Socialforskningsinstituttet, SFI) released its annual report on 'the social responsibility of Danish enterprises'.

Corporate social responsibility (DK9704108N) is defined as initiatives taken to prevent, help and reduce social problems. For instance: do the enterprises show consideration for employees with children or with health problems? And how many employees are employed in jobs on special terms, such as 'flexi-jobs' (jobs on special terms for employees under 65 years of age who have permanently reduced working capacity, and who are not able to maintain employment on ordinary terms - DK9906130N), vocational training schemes and jobs on special terms with wage subsidies.

The overall conclusion of the report is that Danish companies, and especially large public enterprises, have increased their social responsibility, or 'social engagement', since 1998 when the first study on this issue was conducted by SFI. In 2000, some 35,000 employees with a long-term illness or reduced working capacity were employed in Danish enterprises, compared with 29,000 in 1998, while the number of 'flexi-jobs' increased over the same period.

This is in line with the efforts to create an 'inclusive labour market' that has been a key issue in the last five years (DK0104117N), especially for the government, usually in cooperation with the social partners. The idea of the inclusive labour market is to create jobs for people who would otherwise leave the labour market permanently - such as older workers, disabled people, long-term unemployed people or those who have been sick for a long period.

According to the SFI report, enterprises are showing increased concern for employees with reduced working capacity, in order to keep them in work. One of the reasons for this, states SFI, could be an increased public focus on the social responsibility of enterprises. Moreover, collective agreements concluded by the social partners are expected to contribute to the enlargement/extension of social responsibility through various incentives to make the labour market more inclusive. For instance, under the 'flexi-job' scheme, the wage subsidy rate has now become more flexible. Furthermore, the '120-day regulation'- which made it possible to dismiss white-collar workers who had been absent from work due to sickness for more than 120 days in a year, with a shorter notice period than usual - has been suspended in the public sector.

However, the report finds that in some areas the social responsibility of enterprises has, contrary to the overall tendency, been reduced. The number of unemployed people in employment schemes with a wage subsidy, such as vocational training schemes, declined from 23,500 in 1998 to about 19,000 in 2000. Nevertheless, as mentioned above, the number of employees with reduced working capacity increased during the same period.

One of the reasons for the decline in the number of people in vocational training schemes might be that these involve a fixed-term contract. By contrast, the flexi-job scheme and other jobs on special terms with wage subsidies are, due to the fact that the participants have a permanently reduced working capacity, based on open-ended employment contracts. This means that an employer can obtain a wage subsidy from the municipal authority of one-third, one half, or two-thirds of the relevant starting wage at the company concerned, depending on the extent of the reduced work capacity. In addition, the employer might expect the person employed under the flexi-job scheme to remain in employment at the enterprise.

Until now, states SFI, the efforts to make enterprises more social responsible and the labour market more inclusive have, in general, been made with regard to the people who are already employed in the enterprise - 'internal responsibility'. However, another main pillar of the social responsibility of enterprises is to include people who are marginalised in the labour market - 'external responsibility'. So far, external responsibility has not played a major role in the understanding of corporate social responsibility in Denmark, and this could therefore be an area of future concern for the social partners.

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