In October 2006, the European social partners met to discuss the important topic of ‘flexicurity’ at an informal tripartite summit in Lahti in Finland. The summit was organised as a result of an invitation by the European Council to debate the issue of flexicurity. One of the key findings to emerge from the conference was how the main actors have different interpretations of what flexicurity means.
Employer representatives, trade unions and government ministers met to discuss the concept of flexicurity at the October 2006 informal tripartite social summit, held in Lahti in the south of Finland. This followed a request in March 2006 by the European Council that key labour market actors should make progress on flexicurity. A central aim of the summit was to make a major contribution to the European Commission’s communication on flexicurity, which is due to be presented at the spring European Council in 2007.
Defining flexicurity
Originally a Danish concept, flexicurity is now widely practised in the Netherlands, Sweden Finland and Denmark. A hybrid term used to describe policies and measures that combine labour flexibility, on the one hand, and employment protection or social security, on the other, flexicurity was first applied in Denmark, in an attempt to reduce long-term unemployment in the 1990s. Denmark’s success in overhauling its labour market – reducing, for example, unemployment to 4.8% in 2005 – has helped to convince other European social partners and Member States that flexicurity represents the modern answer to tackling unemployment as well as making the EU more competitive.
The Danish experience
Concerned with managing change in a balanced way – something which the European Commission President, José Manuel Barroso, refers to as ‘change security’ – flexicurity is potentially a means of addressing many employees’ fears that flexibility implies a worsening of employment conditions. According to Poul Nyrup Rasmussen, President of the Party of European Socialists (PES) and the former Danish prime minister who oversaw the implementation of flexicurity, this method involves a means of modernising the welfare state. Based on the Danish experience, flexicurity could consist of the following factors:
- policies that support employment mobility;
- education and training for both employed and unemployed people;
- income support and active labour market policies;
- policies that support active ageing and that address age discrimination;
- extensive child and elderly care;
- better work–life balance policies;
- active involvement of the social partners in drawing up such policies.
- the case of Denmark, the flexicurity agenda involves collective agreements governing dismissals, working time and fixed-term work (DK0506103F). In addition to resulting in a decentralisation of decision-making procedures, the agreements place a large emphasis on improving an individual’s skills and their labour market mobility. Furthermore, high unemployment assistance and active labour market policies are an integral part of Danish flexicurity.
Different interpretations
At the end of the informal tripartite summit, the Finnish Prime Minister, Matti Vanhanen, concluded that a better ‘common understanding’ of flexicurity now prevails. Nonetheless, subsequent employer and employee responses suggest that numerous interpretations of flexicurity exist.
Employer perspective
The different interpretations pertain to the emphasis that the relevant parties place on either flexibility or security. In the case of the European Association of Craft, Small and Medium-sized Enterprises (UEAPME), the focus is very much on improving access to employment through deregulation policies. In particular, this should involve a weakening of regulations governing the hiring and firing of employees. Although UEAPME is not dismissive of security, it argues that a updated understanding of security is required – one that underlies the wider importance of employment security rather than job security. Such an interpretation involves employees accepting that a lifelong attachment to a particular job or profession is no longer feasible, and that staying in employment requires employees to be geographically and functionally mobile. Seen from this perspective, flexicurity is concerned with moving people out of their ‘comfort zone’, something which too much regulation maintains.
In contrast, the Industrial and Employers’ Confederation of Europe (Union des Industries des pays de la Communauté européenne, UNICE) seems to have adopted a more moderate interpretation. UNICE’s representative, Christopher Taxell, noted that flexicurity needs to have ‘the right mix of economic and social measures to foster job creation’. For UNICE, flexicurity involves three integral factors which include:
- flexible labour law that does not amount to unlimited deregulation;
- fighting undeclared work;
- a balance between active labour market and sound fiscal policies.
In addition, UNICE outlined its commitment to subsidiarity, whereby each Member State is required to design its preferred approach to flexicurity.
Trade union perspective
From the trade union perspective, the President of the European Trade Union Confederation (ETUC), John Monks, emphasised the confederation’s support for flexicurity, as long as it is not a by-word for precarious work. ETUC particularly outlined the need to ensure that any discussion on flexicurity should not only focus on the place of work, but should also take into account the role of the welfare state in identifying and assisting any individuals who have been left behind by the labour market. For ETUC, flexicurity represents an integral part of the European social model, a system that has at its core fundamental rights, social protection, social dialogue, social and employment regulation, and state responsibility for full employment.
Commentary
The Commission’s spring 2007 communication to the European Council should prove to be an important milestone in the development of flexicurity. However, the conflicting interpretations between the social partners and possible negotiations at national level are likely to result in a diverse conceptualisation and implementation of what are referred to as flexicurity measures.
Michael Whittall, Technical University Munich for AWWW GmbH ArbeitsWelt – Working World