Failure to reform labour markets damaging for Europe
By Annemarie Muntz (*) | Wednesday 11 July 2012
Although the deadline for transposition of Directive 2008/104/EC on temporary agency work was more than six months ago, implementation across the EU27 remains unbalanced. As Europe struggles with worrying levels of unemployment, particularly among the young, this is regrettable. There are many elements of the directive that would serve to create jobs, better match supply with demand in the workplace and bring more people into an official working status when previously they may have worked informally or been excluded from the labour force.
Restrictions are still in place in a number of countries, which preclude the industry from helping to reduce the record levels of unemployment witnessed in Europe. These include limitations on the number of contract renewals that can be offered to agency workers (France, Italy, Luxembourg, Romania), restrictions on using agency workers in some sectors (public sector in Belgium and Greece, construction in Germany and Spain), and the prohibition of offering open ended contracts to workers (Belgium, Luxembourg, Portugal), which prevents the industry from presenting job opportunities to European citizens. With the European Commission offering specific advice on national labour market reforms to member states, it would be wise to recommend that countries remove all unjustified restriction on the agency work industry in order to promote employment.
However, it is not all gloom and there are some notable examples of best practice in implementation. These include the establishment of legal recognition of temporary agency work in several Eastern European countries and the lifting of some restrictions on the use of private employment services. France, Romania and Spain, for example, have removed some sectoral bans; France and Italy have extended the range of contracts which temporary work agencies can offer and both Romania and Poland have increased the maximum length of agency work assignments.
The new EU employment package, introduced in April, also takes a number of useful steps in progressing labour market reforms and encouraging national governments to embrace policies that meet the needs of today’s economic reality. It focuses on tools to support job creation and demand and recommends that obstacles to skills training, youth employment and labour market transitions be removed.
In addition to promoting open, dynamic and inclusive labour markets, the employment package recognises that a correct balance between flexibility and security is an essential prerequisite to job creation. The directive on temporary agency work aims to unlock the sector’s contribution in this regard with the flexibility the agency work industry affords offering an attractive incentive for both employers and employees in providing secure, quality jobs.
The reality of today’s labour markets is that permanent, direct, full-time employment has declined and some 40% of the EU workforce is now employed under non-standard contracts, such as fixed-term, part-time, self-employed, self-business, telework or co-working. The challenge is that many labour markets do not yet have appropriate regulation in place to reflect this diversification of contractual arrangements and more dispersed workforce, especially in terms of access to full social protection.
Private employment agencies put over three million people to work every day in Europe via non-traditional labour contracts and we believe that the private employment services sector has a real role to play here in better and faster matching supply with demand, anticipating training for skills needed and managing transitions within the labour market.
Agencies fulfil a stepping-stone function, which supports workers as they move from unemployment to employment and then as they move from part-time work to full-time work and from declining sectors to growth sectors. By staying close to the workplace, private employment agencies understand the needs of businesses and can transition workers into the roles and jobs available. People under 25 years of age represent 35% of the agency work population, and as Europe focuses on getting these people into work the private sector often provides them with their first experience of the world of work and continues to support them with career guidance and training that enables them to make upward transitions to further jobs.
Governments must address the structural reforms in each of their countries that have been preventing labour markets from functioning efficiently. Restrictions to the delivery of private employment agencies, lack of active labour market policies, absence of cooperation between public and private employment services are causing the issues to be looked at. Without reviewing these structural problems, whatever recovery eventually comes will not be very effective in reducing unacceptably high unemployment rates, especially amongst young people.
We urge countries across the EU to fully implement the directive on temporary agency work, and the European Commission to effectively monitor this process in order that the sector can play its role fully and partner with governments, companies and workers in getting Europe back to work.
Annemarie Muntz is president of Eurociett, representing the private employment services sector