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European Labour Law Lecture 05A

European Labour Law Lecture 05A. 5.1 Employment policies– general 1.

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European Labour Law Lecture 05A

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  1. European Labour Law Lecture 05A

  2. 5.1 Employment policies– general 1 Since the 1920s/1930s all modern states have become aware of the necessity to direct state politics to the employment situation. Socialism and communism were the first to advocate this, fascism and nazism followed suit and finally also in liberal-capitalist societies (notably after the Great Depression of the 1930s) the necessity of economic policies to stimulate employment was understood. After the Second World War the aim of reaching full employment became an indispensable part of all economic policies in all Western-European countries. Also the theory of Keynes about anti-cyclic macro-economic policies was almost generally accepted.

  3. 5.1 Employment policies-general 2 Governments were used to deploy measures to support employment by protecting national business by - national customs policies • State aid and subsidies • monetary policies (currency rates and interest rates) Keynes advised governments to use additional instruments to fight unemployment, such as - anti-cyclical budget policies - stabilisation of wages and prices

  4. 5.1 Employment policies-general 3 However, let us not forget that the very aims of the EEC/EU deprived the national authorities of the MS of most of these instruments to stimulate employment Under EEC/EU law successively MS were no longer able/allowed to stimulate their economies by protecting national business through - national customs policies • State aid and subsidies - monetary policies (currency rates and interest rates) - budget policies

  5. 5.1. Employment policies-general 4 In is clear that such a contradictory approach (embracing the full employment aim and at the same time yielding its instruments) could only be justified, if employment policy making would return at a higher level, that of the EEC. In fact, the ECSC/EEC right from the start in the 1950s have been committed to the goal of a high degree of employment, also in their treaty texts (Art. 2 ECSC/Art. 2 EEC) Now: Art. 3(3) TEU - full employment Art. 9 /art. 147 (2) TFEU– a high level of employment

  6. 5.1 Employment policies-general 5 However, these commitments were not translated in a forceful bunch of competences. In the 1950s the optimist liberals believed that the market would do most of the job, so the treaties right from the start did not give have EEC institutions much competences to act to stimulate employment. Employment policies were still regarded as a primarily national matter. There were some competences for EU institutions, but they were weak:

  7. 5.1 Employment policies-general 6 The Commission was charged to gather information, to conduct labour market studies and to consult and advise national governments and social partners on employment matters (Art. 46 ECSC and Art. 118 EEC). The Council of Ministers limited itself to Resolutions and Recommendations. And only after the first post-war economic depression (1969) a Standing Committee on Employment was set up, uniting representatives of the Council, the Commission and the European Social Partners. Its function was mere consultative.

  8. 5.1 Employment policies-general 7 The most forceful EEC instruments were on the financial side: • art. 56 ECSC • The European Social Fund However, even they were poorly entrusted with resources. Moreover there was a provision on vocational training in the EEC Treaty.

  9. 5.1 Employment policies-general 8 Since the end of the 1970s the EEC/EU has suffered from a permanently high degree of unemployment. An average of circa 10% of the working population – in good years this figure tends to reduce to ca. 9%, in economically hard times it easily goes up to an average of 11% The differences between the MS are formidable. Actually The Netherlands is at the bottom with ca. 4% unemployment while Spain is on top with ca. 20%. The EU figure almost constantly is higher than the US figure.

  10. 5.1 Employment policies-general 9 However, it was not earlier than in the 1990s that time was ripe for a more powerful employment policy at EU level. The Treaty of Amsterdam, 1997, inserted a Chapter on Employment policies in the EC Treaty. Now art. 145-150 TFEU. But even in this text the instruments are weaker than in other chapters of the treaty. Policies could only be carried through by way of “Guidelines”, drawn up by the Council of Ministers in accordance with its economic policy. (art. 148(2) TFEU. Hendrickx C. p. 177-187.

  11. 5.1 Employment policies-general 10 Even so, the Commission and the Council in 1997 launched ambitions employment policies under the headings of European Employment Strategy. This strategy in 2002 was adapted to match the so-called Lisbon-Agenda 2000: to make Europe in 2010 the most dynamic knowledge-based economy of the world, capable of sustainable economic growth with more and better jobs and greater social cohesion. It soon became clear that this was a too ambitious ideal. In 2002 the EU economy entered a new period of stagnation.

  12. 5.1 Employment policies-general 11 A new attempt for forceful employment policies was made in 2004 when Ministers adopted the so-called Kok-report “Jobs, jobs, jobs, creating more employment in Europe”. After some years, however, the EU-economy came again in a recession in 2008 as a result of, first, the banking crisis and then the solvency-crisis of a number of Euro MS. So the Lisbon-Agenda definitively has become a failure. Nevertheless the politicians fixed a new ambition for the year 2020.

  13. 5.1 Employment policies-general 12 Formally the employment ambitions are laid down in yearly Decisions of the EU Council of Ministers concerning guidelines for the employment policies of the MS. See for the most recent ones the Decision of the Council 2011/308/EU of 19 May, 2011, OJ L 138 of 26 May, 2011. They contain a high degree of authoritarian language. MS must do this…and must do that. However, they are devoid of any binding force! MS most of the time find polite excuses why they have not or only slightly followed the guidelines.

  14. 5.1 Employment policies-general 13 It is largely a bureaucratic exercise in which the MS are obliged to write yearly national reports about their progress in implementing the guidelines (art. 148 (3) TFEU). On this basis the Council of Ministers may issue Recommendations (art. 148(4) TFEU). Also on this basis the Commission and the Council of Ministers annually publish the Joint Employment Report, assessing the EU situation as well as the MS’s national reform programmes (art. 148 (5) TFEU).

  15. 5.1 Employment policies-general 14 The European institutions frequently set out a number of typical pathways to help MS draw up their own national strategies and learn from each other’s experiences and best practices. This is called the Open Method of Coordination. However: these measures shall not include harmonisation of the laws and regulations of the MS!! (art. 149/150 TFEU). Still, these policies guidelines have another function: they serve as priorities for the distribution of money via the European Social Fund. That is possibly their main relevance.

  16. 5.1 Employment policies-general 15 So what are the main focal points of the EU Employment Strategies nowadays? - The flexicurity strategy to promote more and better jobs by combining flexibility for the companies and security for the workers. MS should encourage employment security rather than job security. Emphasis should be led on in-company training, lifelong learning programmes and promoting entrepreneurship. Often the Danish example of loose dismissal protection, high unemployment benefits and active labour market policies are advertised. - Strategies to achieve a better balance of work, private and family life.

  17. 5.1 Employment policies-general 16 - Highlighting the benefits of diversity and combatting gender and racial discrimination and inequality as well as fostering rights of disabled persons. - Raising the employment rate - Promoting more investment in education, training, research and development. - Promoting “green” sustainable investments

  18. 5.1 Employment policies-general 17 Recently also the European social partners have done their bit in increasing this entire paper mountain on employment policies by concluding in 2010 the Framework Agreement on inclusive labour markets. It is drawing the attention of all concerned to the necessity to integrate especially those persons who suffer most difficulties in access to the labour market or lost their jobs. However, also this agreement is just one lofty admonition, especially of the national social partners, to consider their responsibilities in this field, without containing any binding obligation.

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