EUROPEAN YOUTH PARLIAMENT LUXEMBOURG
Academic Preparation Kit DIGILUX 2020 The Great Disruption: The Future of Employment in Europe 21st - 22rd November 2020
Welcome from the President Dear delegate, Welcome to DigiLux 2020 – the first Digital Session of EYP Luxembourg. Wherever in Europe you may be, however old you may are, I would be willing to bet quite a lot of money that 2020 has been a year of many firsts for you. Maybe you entered a new school for the first time, maybe you had your first online classes, maybe for the first time your plans got cancelled, and you had to think of a different way to accomplish some task, or you had to change your priorities. Nonetheless, life goes on. For me, that is the beauty of EYP: things change around us, and we learn to get along. This Academic Preparation Kit contains four expertly written Topic Overviews, all concerning the topic of labour market policy in the European Union. I highly recommend you spend enough time before the session getting familiar with your topic, but also reading through the other texts to notice where the topics possibly intersect and overlap. As you dig deeper into the rich and complicated world of work, you are going to notice that few things are consistent within and between countries. Entire national identities may revolve around the skilled production of goods: just think Germany and automobiles, Finland and forests, or Italy and clothing. It stands to reason that countries up and down the Single Market want to set employment policies which support their strongest industries, echoing the theory of comparative advantage outlined by the economist David Ricardo back in 1817. Nonetheless, I would like you to read the Topic Overviews with an open mind, keeping at the back of your head this question: what can the EU do? All of our topics – transitions from school to employment, supporting key workers, returning from unemployment or furlough to work, and regulating the gig economy – are much bigger than individual Member States. During times like these, when great social forces are testing the resilience of our social and economic systems, it is much better to rise up to the challenge together. I invite you to read with enthusiasm, read critically, share your thoughts, and ask questions from your fellow delegates and officials. DigiLux may be an online session, but it is no remote session. Let’s make our digital community feel like home. Yours ever,
Henri Haapanala President of DigiLux 2020
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Topic Groups Directorate-General for Education, Sport, Youth and Culture (DG/EAC) Page 6
Young people are more educated than ever, but finding it more difficult to break into the labour market than previous generations. What should Member States do to support the transitions from school to employment? Chairpersons: Sofia Zangana (GR) and Matthaios Ntoutsis (GR)
Directorate-General for Employment, Social Affairs and Inclusion I (DG/EMPL I) Page 12
With ‘key workers’ such as nurses, shopkeepers, cleaners and police officers in roles where remote working is practically impossible and salaries relatively low and inflexible, how can Member States keep them safe from disease and ensure adequate compensation for their indispensable services to society? Chairpersons: Triin Sulengo (EE) and Isidora Popaj-Popović (AL)
Directorate-General for Employment, Social Affairs and Inclusion II (DG/EMPL II) Page 19
With furlough schemes shielding up to 45 million Europeans from unemployment about to end, what steps should the Member States take to get as many people back to work as possible, while ensuring an adequate safety net for all? Chairpersons: Ahmad Raza (UK) and Mohtaram Gasimova (AZ)
Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG/GROW) Page 25
As the ‘gig economy’ providing flexible and easily accessible on-demand work in industries such as ridesharing, food delivery, and personal and household services has expanded across Europe, challenging the conventional definitions of employer-employee relationships, what regulatory frameworks should apply to them? Chairpersons: Ninni Norra (FI) and Ștefan Tatu (RO)
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European Youth Parliament (EYP) The European Youth Parliament is a non-partisan and independent educational project which is organised across Europe by young people, for young people. European Youth Parliament Luxembourg, established in 2013, is the National Committee of EYP in Luxembourg. EYP encourages independent thinking and initiative in young people and facilitates the learning of crucial social and professional skills. Since its inauguration in 1987, tens of thousands of young people have taken part in Regional, National and International Sessions, formed friendships and made international contacts across and beyond borders. EYP has thus made a vital contribution towards uniting Europe. Today, EYP is one of the largest pan-European platforms for political debate, intercultural encounters, non-formal educational work and the exchange of ideas between young Europeans. The EYP network is represented in 41 European countries and has thousands of active young volunteers. EYP is a programme of the Schwarzkopf Foundation.
European Union (EU) The European Union (EU) is an economic and political union of 27 Member States. The EU was established by the Treaty of Maastricht in 1992 upon the foundations of the European Communities. The EU has developed a single market through a standardised system of laws which apply in all Member States. It ensures the free movement of people, goods, services and capital, including the partial abolition of passport controls within the Schengen Area. It provides legislation in justice and home affairs, and maintains common policies on trade, agriculture, fisheries and regional development. 19 Member States have adopted a common currency, the euro. The EU operates as a hybrid system of supranationalism and intergovernmentalism. This means that in certain areas, decisions are taken independently by EU institutions whereas in others, they are made through negotiations between Member States. Decision-making in labour market policy is exercised particularly strongly by Member States, following the principles of subsidiarity and proportionality. The EU traces its origins from the European Coal and Steel Community and the European Economic Community formed by six countries in the 1950s. Since then it has grown in size through enlargement, and in power through the addition of policy areas to its authority. The latest amendment to the fundamental treaties of the EU, the Treaty of Lisbon, came into force in 2009.
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Institutions of the European Union The European Council is responsible for defining the general political direction and priorities of the EU. It comprises the heads of state or government of EU Member States, the President of the European Council (currently Charles Michel from Belgium) and the President of the Commision. The Council of the European Union (commonly referred to as the Council of Ministers) is the legislative institution of the EU that represents the governments of Member States. The other legislative body is the European Parliament. Who exactly are members of the Council of the EU depends on the topic: for instance, when discussing agricultural policy, the Council is formed by the 27 national ministers whose portfolio includes this policy agenda. The six-month rotating presidency is currently held by Germany. The European Parliament is the directly elected, parliamentary institution of the EU. The Parliament directly represents the citizens of the EU. Together with the Council, it forms the bicameral legislative branch of the EU. Parliament is composed of 705 MEPs. The current President is David Sassoli from Italy. The European Commission is the executive body of the EU. It is responsible for proposing legislation, implementing decisions, upholding the treaties of the Union, and the general day-to-day running of the Union. The Commission operates as a cabinet government with 27 commissioners, one from each Member State. The current President is Ursula von der Leyen from Germany. Other important institutions of the EU include the Court of Justice of the European Union and the European Central Bank. The EU also has several agencies and other institutions.
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DG/EAC Directorate-General for Education, Sport, Youth and Culture
Directorate-General for Education, Sport, Youth and Culture (DG/EAC) Young people are more educated than ever, but finding it more difficult to break into the labour market than previous generations. What should Member States do to support the transitions from school to employment? By Sofia Zangana (GR) and Matthaios Ntoutsis (GR) 1. The topic at a glance Youth unemployment has again become a pressing issue for the European Union (EU), as the coronavirus pandemic risks undoing the achievements in reducing youth unemployment to levels last seen in 2007 before the financial crisis. Deriving from the pan-European economic and humanitarian crisis and the subsequent labour market instability, it is difficult for young people to find a job that suits their competences. As non-standard employment relationships on part-time and temporary contracts are increasing, particularly for entry-level positions, young jobseekers focus primarily on obtaining more qualifications, certificates and degrees in order to create a strong curriculum vitae (CV). They hope that by gaining more expertise it will be easier to find a job based on their qualifications and interests, which provides adequate income, professional advancement opportunities and fair working conditions. However, more than 3.3 million young Europeans aged 15-24 years were unemployed in 2019. Overall, youth unemployment holds back youth initiative and economic growth. The pan-European economic crisis has created a plethora of structural challenges and therefore, highly skilled young people face crucial dilemmas concerning their professional future. For instance, Saskia Harper, a 23-years-old, tertiary-educated citizen who was working as a magazine journalist and got fired in June because of the pandemic, has received since then only rejection emails. ‘I went into the process with a really positive mindset but now the job hunt has become physically draining. It’s also affecting my mental health: the stress of running out of money, applying for benefits and feeling unproductive’, shared Saskia in an interview with the Guardian. Taking into account young citizens’ discouragement, how can Member States contribute in tackling youth unemployment?
2. Key Terms • Labour market: The marketplace matching labour supply with demand, where employ -ers provide the demand for labour and employees or job seekers provide the supply. It is connected to autonomous markets for capital, goods and services. 7
• Unemployed citizens: People aged 15 and over who are not currently working, are available to work, and are actively looking for work. • Economically inactive citizens: People who are not included in the economically active population and who are neither employed nor actively seeking work. Economically inactive people may be in education or training; or out of the labour force due to illness, disability, retirement, or family responsibilities. • Not in employment, education or training (NEET): Young citizens not in employment, education or training. The persistently high share of Europeans in this category is seen as problematic, because time spent as NEET is associated with a higher risk for social exclusion, poverty, insecurity, and poor health. • Tertiary education: The level of education following secondary schooling, provided by universities and higher education institutions. Tertiary education graduates receive academic, advanced vocational, or professional degrees as a sign of specialisation in their respective fields. 3. Key Actors and Stakeholders • The Council of the European Union (The Council) is the institution responsible for setting the EU’s policy agenda, identifying issues of concern and coordinating future actions. Its stake in handling youth unemployment is important since it coordinates the Member States’ policy-making, thus developing the EU’s common strategy on overcoming labour market instability. In particular, the Council has recommended the integration of the young unemployed citizens into the labour market via their registration, their individual assessment and approach as well as job agreements with their employer. • The European Commission (EC) is the executive branch of the EU, responsible for proposing legislation and implementing decisions. More specifically, the European Commission has created a plethora of programmes and initiated actions to ensure the integration of young citizens in the labour market. The Directorate-General Education, Sport, Youth and Culture (DG-EAC) develops and carries out the EC’s policy on projects related to the promotion of the professional engagement of young citizens. • The European Social Fund (ESF) is one of the EU’s instruments through which it ensures that all young citizens receive job opportunities and fair income and working conditions. The ESF’s main aim is to invest in human capital, improving job prospects for millions of young Europeans and especially for those who are unemployed and can be characterised as NEETs. • The Youth Employment Initiative (YEI) is a European financial institution, supporting the implementation of schemes that addressed the promotion of youth employment. It exclusively supports young citizens who are not in education, employment or training and the long-term unemployed. Typically, the YEI funds the provision of apprenticeships, traineeships, work placements and further education leading to a job qualification. • Young citizens are the key actors of this crisis, being the ones most affected by the barriers the European labour force faces. They are increasingly trained, educated and invested in creating 8
a prosperous career. The Europe 2020 Strategy set an objective where 40% of the population aged 30-34 has a tertiary qualification. However, this percentage is different for Member States based on national needs and policy; for instance, Luxembourg’s national target is 66% while Estonia’s is 40%. 4. What has been done so far? The European Commission launched the European Solidarity Corps, which aims to offer occupational and volunteering placements to young skilled citizens, providing traineeships, apprenticeships and jobs. Its objectives are facing challenges and overcoming barriers posed by the unemployment crisis, promoting EU solidarity values and enabling young people in their pursuit for a job. In 2013 the Council addressed a recommendation to the Member States on establishing the Youth Guarantee. It is a commitment made by Member States to ensure the good quality of education, employment, apprenticeship and traineeship of all young people becoming unemployed or leaving formal education under the age of 25. In its efforts to smoothen the transition from education to the labour market, the Council addressed the EU Youth Strategy in 2018, a framework for EU youth policy cooperation for 2019-2027 aiming to provide further expertise and practical experience for young jobseekers. The European Employment Strategy (EES), a soft law, was created with the aim of coordinating the Member States’ employment policies, objectives and actions. The creation of more jobs throughout the EU and the improvement of wages and working conditions are its primary goals, being part of the Europe 2020 Growth Strategy and implemented through the European Semester. Erasmus+ is an EU-funded programme supporting young Europeans in broadening their education and expertise. It provides opportunities for over 4 million Europeans to study, train, and gain experience abroad. The programme focuses on reducing the unemployment rates among young educated citizens and on helping them obtain the skills required by employers. 5. Key Conflicts Obtaining multiple general skills or focusing on specific job-orientated competencies is a dilemma many young people face before entering higher education. Keeping in mind the economic crisis and the fragility of job openings, the questions that arise are how likely it is that young jobseekers are led to working poverty, and if the labour market prefers candidates with multiple, general skills or specialised jobseekers depending on a particular industry. The mismatch between skills provided by higher education and skills demanded by employers keeps challenging the young workforce, leading to further inequalities amongst NEETs and highly educated citizens. Tertiary education in a specific domain allows young people to obtain specialised knowledge and 9
specific practical skills. Whereas general higher education offers multilateral and versatile expertise - also known as transferable skills - that prepare workers for multiple occupations. The labour market’s incapacity to offer a sufficient number of job opportunities for skilled workers has made it increasingly difficult for this generation to break into the labour market. Polycrisis phenomena such as debt, unemployment, and humanitarian challenges befall the entire European region, with some Member States facing serious consequences. More specifically, the economic fallout from the 2020 pandemic crises has reduced the demand for labour, while more and more young Europeans are leaving education and becoming unemployed jobseekers. Thus, the youth unemployment rate is still very high in the EU with peaks of more than 30% in several countries. In addition to the estimated loss of 5 to 25 million jobs, many young people who find employment are in a vulnerable position, working in lower quality, less paid, insecure or unsafe jobs. In many ways, the fallout from the pandemic resembles that of the 2008 economic crisis: in Spain, Greece and Ireland, half of working young people lost their jobs between 2007 and 2014. Moreover, in 2018, more than 5.5 million young European citizens were not in employment, education or training.
‘Unemployment rate within the Member States’, Eurostat (2019)
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Moreover, deciding either to work or receive further education after graduating from university is a challenging problem many tertiary-educated young Europeans face. Not only does further education provide more expertise, knowledge and qualifications, but it also gives more opportunities for career development. However, young citizens who go to work straight after graduating develop more practical skills. They also have further time to work voluntarily and participate in apprenticeships or training, obtaining experience. For instance, an increasing number of employers demand digital skills which may be easier to acquire on-the-job than at school. The dilemma that young Europeans are facing is to either have a fulfilling academic career or to acquire enough skills to get easily employed. In some cases, young people are forced to have a job in a field that they are not interested at all in order to sustain their academic careers. The European labour market mostly requires experience from really young citizens, who might have been highly educated but lack the practical skills. Thus, young people dither between looking for a job after graduating or further improving their skills. In either case, the transition from education to work is made more challenging if young people are afraid of rejection by prospective employers. What this situation entails is a young European workforce that might be very well educated but lacks experience to ‘get their foot in the door’ or is highly practically skilled but lacks the formal qualifications to rise through the ranks. 6. Questions to consider • How can young people who have just graduated from education facilities be encouraged to start looking for jobs suiting their qualifications? • Since young citizens are likely to reach working poverty, how can empowering the youth initiative and entrepreneurship be effective? • Why do forming digital skills and overcoming challenges related to platform work play a significant role in tackling youth unemployment? • What action should employers take to contribute to job growth and the improvement of working conditions for young jobseekers, and what role should the EU institutions play? 7. Further links A BBC podcast on youth unemployment and entrepreneurship initiatives taken by young educated Europeans A Euronews crash course on the economic challenges young trained Europeans face A report on the characteristics of the European youth unemployment and the importance of an EU sphere policy A seasonally adjusted statista survey on the youth unemployment rates of the EU and the Member States An analysis on the extended polycrisis phenomena threatening the EU and exacerbating youth unemployment 11
DG/EMPL I Directorate-General for Employment, Social Affairs and Inclusion I
Directorate-General for Employment, Social Affairs and Inclusion I (DG/EMPL I) With ‘key workers’ such as nurses, shopkeepers, cleaners and police officers in roles where remote working is practically impossible and salaries relatively low and inflexible, how can Member States keep them safe from disease and ensure adequate compensation for their indispensable services to society? By Triin Sulengo (EE) and Isidora Popaj-Popović (AL) 1. The topic at a glance The ongoing COVID-19 pandemic has brought to the fore workers that are vital, yet undervalued; people who cannot continue to work remotely, yet society critically needs their services. Nurses are pivotal to the frontline fight against coronavirus, police are necessary to ensure compliance with the new restrictions, shopkeepers provide food and other essential items, cleaners work hard to keep public spaces hygienic and prevent infections. The list goes on, but most of these professions are underpaid, overworked, and now facing heightened health risks due to the virus. As an additional complication to these issues, many of these workers belong to already marginalised groups. Besides the health risks, the emotional toll of being a key worker during such difficult times is reportedly causing mental health issues to many such professionals, thus further hindering the well-being of those most necessary to society in these times. These hardships are largely mitigated for highly skilled key workers, such as doctors, as their high level of education is acknowledged and remunerated by society. In contrast, professionals in roles requiring lower academic qualifications do not receive the same recognition and pay, despite their important contribution to society. This disparity between necessity and remuneration raises important questions about fair compensation and protection of traditionally overlooked professions that have now proved central to the well-being of society in times of crisis. 2. Key Terms • Key Workers: also called essential workers, are people employed in fields that are deemed to be vital for society. These workers are critical in a pandemic situation such as the ongoing COVID-19 crisis. Examples of key workers include nurses, shopkeepers, transport workers, cleaners, and police officers. • Remote working: is working in a different space from where the employer and/or physical working space is located, particularly working from home. During the pandemic, many employees have had to transition to remote work in order to reduce the spread of the coronavi13
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rus. Labour Unions: is an organisation of workers that represents their collective interests, providing them with more negotiating power towards employers over such topics as wages and working conditions. Labour unions are mostly profession specific but can also be more general in some cases. Migrant workers: are people who migrate within or out of their country with the intention of securing employment. They usually do not have the intention of staying permanently in the country or region of their current work. Tax exempt: refers to persons, income, or transactions that are free from tax obligations. Remittance: is a transfer of money often associated with foreign workers sending money from their resident country to individuals in their home country.
3. Key Actors and Stakeholders • The European Commission (EC): is the EU’s executive arm, responsible for creating and implementing legislative proposals. The EC put forward a proposal in response to COVID-19 pandemic that includes financial support for Member States to improve their health sys tems, assist essential workers, and mitigate unemployment risks. More generally, the EC provides frameworks in the areas of employment and workforce protection with which national legislation needs to comply. • The Council of the EU: Government ministers from each EU country meet to discuss and coordinate laws and policies. Together with the European Parliament, the Council is the -main decision-making body of the EU. Complementing its work on coordinating social se curity systems, the Council of the EU has supported collective efforts against COVID-19 by the Member States. • The European Parliament (EP): is one of the legislative bodies of the EU which adopt the legislation proposed by EC, in coordination with the Council of the EU. Recognising the importance of frontline key workers in public health crises, the European Parliament adopted a resolution in favour of higher wages and better working conditions for them. • The European Economic and Social Committee (EESC): is an EU advisory body comprising representatives of key workers’ unions, employers’ organisations, and other interest groups. In its advisory capacity, the EESC has drafted various proposals related to key workers, particularly on decent minimum wages, a framework directive for minimum income, common standards for unemployment insurance, as well as equal rights for posted workers. • Member States: are responsible for the safety and well-being of their citizens. Various areas of employment and social affairs defined by the Treaty of the Functioning of the EU (TFEU), particularly employer and workforce protection, are shared competences, where EU legislation takes precedence but Member States can also legislate. In more general areas of employment, the EU can only coordinate best practices, with national governments being primarily responsible for labour laws which regulate working conditions and fair remuneration for all workers. 14
• International Labour Organisation (ILO): is a specialised agency created by the United Nations (UN) with the purpose of protecting and improving labour conditions and standards of living. In response to the pandemic, the ILO issued an opinion on their pillars of protecting all workers in their workplace by reinforcing Occupational Safety and Health (OSH) measures and providing health access for all. 4. What has been done so far? The EP has acknowledged the vital role of key workers in overcoming this crisis and passed a resolution in April 2020 calling for higher wages and safer working conditions for them. The same texts also draw attention to the fact that women represent 70% of the care and social workforce, while often being paid the minimum wage. Additionally, the EC has taken action to identify frontline workers in essential occupations who are in need of free movement between Member States, particularly posted workers. The relevant guideline presented by the EC outlines what actions should or should not be taken in relation to protecting such workers. Finally, the EC has taken increasing steps to ensure OSH standards for key workers across various areas. Intergovernmental organisations as well as NGOs have also spoken out on the topic of furthering support and protection of essential workers. The World Economic Forum (WEF) has stressed that some revaluation of essential work and its role in society might be in order. The ILO has acknowledged that alongside tackling mass unemployment, governments also need to take special care to protect the workers still performing their duties despite the pandemic. Finally, Amnesty International has compiled research on the worldwide failures in protecting health and essential workers. In the realm of worker protection, the European Space Agency (ESA) has set up a mobile field laboratory in Italy for rapid-testing thousands of key workers daily. In accordance with the EU Civil Protection Mechanism, all Member States are eligible for such testing laboratories. Conversely, most of the action on remunerating key workers has been coming from individual Member States, which have initiated schemes to promote the well-being of essential staff, as well as support them financially. For example, the Belgian government took a step forward and acknowledged the vitality of essential workers and their contribution in times of distress by extending recognition of COVID-19 as an occupational disease to key workers. This policy change will allow any worker suffering from the virus to claim state sponsored compensation; it also creates a COVID-19 fund for various essential workers. Likewise, Germany has given a tax exemption to any bonuses up to ₏1,500 employers might pay to essential workers for their contributions. Finally, facing a tough challenge such as the lack of workforce in various essential services, many Member States have worked towards relaxing the rules of access to the labour market for asylum seekers and migrant workers. To ensure social and health protection, Italy is granting amnesty to undocumented immigrant key workers; likewise, Portugal will grant temporary residence 15
permits to all asylum seekers with pending applications, thus granting social security to undocumented immigrant key workers. 5. Key Conflicts Key workers are currently seen as vital to keeping life going, however, this is not necessarily reflected in their salaries. This wage disparity has brought up questions about how we determine the value of an employee on the labour market: those in highly skilled professions have invested time and money into their education, so a case can be made that the high salaries they earn reflect the value they add to society. However, does this necessarily mean that workers in less academically demanding or specialised professions should be paid less, even though they are performing equally important and necessary work? This conflict is perhaps most starkly exemplified by the UK’s decision to give a pay rise to doctors but not to nurses for their contributions during the pandemic. In contrast, the pay rises for key workers in France mostly covered the wages of nurses, care workers, and non-medical staff. An additional issue that complicates the life of essential workers is the emotional toll placed on them during the pandemic. Studies have found that key workers are facing increased challenges to their physical and mental health. In times of crisis, it can be justified to ask citizens to make some sacrifices. States such as Luxembourg have made conditional adjustments to labour laws to allow employees to combine working longer hours than usual due with increased pay, to the demands of the current situation. As a result, this creates a conflict wherein labour laws are put in place to protect workers and their well-being, whereas relaxing these labour laws results in additional strain for the key workers. This approach is understandable from a ‘greater good’ perspective, but also adds to the weight and stress experienced by essential workers. In particular, it pairs prospects for increased remuneration for key workers with increasingly demanding working hours, which undermine their overall welfare. In another dimension of essential work, the pandemic has had a significant impact on migrant workers, who work in another Member State either with or without full legal documentation. In Europe there are an estimated 4 million undocumented migrants. In Italy there are 200,000 undocumented migrants working in agriculture alone. More broadly, the specific needs of migrant workers present a particular challenge to the implementation of social policies. Migrants constitute 13% of the key workers in the EU, thus being at increased risk of exposure to coronavirus. Migrants can be considered as one of the most vulnerable groups, especially those who are undocumented, and thus not eligible for state funded healthcare services and other social protections. They might already be facing social issues such as inclusion, or financially strained due to their dependents.
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Immigrant Key Workers: Their Contribution to Europe’s COVID-19 Response | Knowledge for policy The problems that migrant workers face have far-reaching consequences across Member States and beyond, as migrant remittances specifically can be a significant source of income for poor households and their reduction can lead to an increase in poverty. Furthermore, undocumented or documented migrant workers who are likely to work in weakly regulated or unsafe jobs, or even ‘informal’ labour markets existing outside the employment legislation of the Member State, may still continue to work out of economic necessity. This potentially places them at higher risk of contracting and spreading the virus, all the while not having access to healthcare or unwilling to speak to their employer or the authorities should they become infected. Health problems are just one of the numerous troubles that undocumented immigrant workers have been facing, as they are at constant risk of losing employment, wages, and health insurance coverage. Considering the importance migrant workers have held for decades but also during the pandemic, social rights advocates argue this is the appropriate time to put them on equal legal footing with domestic workers. Overall, it appears more could be done to support the diverse group of key workers, who society might have been all too willing to take for granted before the pandemic.
6. Questions to consider • Should the salaries of key workers be more reflective of their contribution to society? If so, what concrete actions should Member States take towards ensuring fair and adequate compensation for key workers? • Where should the balance lie between social and financial support in ensuring the well-being of key workers? 17
• In what ways does the specific situation of immigrant workers affect their well-being? Should the EU take steps specifically aimed at improving the standard of living for immigrant workers in key sectors and how can it achieve this goal? • Should there be more government schemes for supporting key workers, or should funding focus mostly on those who are now unemployed as a result of the pandemic? • Most of the measures taken so far to support key workers have been initiated and carried out individually by Member States. Considering that the responsibility for employment and social policy lies primarily with national governments, what methods can the EU utilise to supplement country-specific strategies? 7. Further links ‘Covid 19 - Government schemes in other key European jurisdictions’ - Exposition of financial schemes Member States presented to help workers who are experiencing difficulties during the pandemic. ‘Immigrant Key Workers: Their Contribution to Europe’s COVID-19 Response | Knowledge for policy’ - Exposition by the EC on the statistics of immigrant key workers and their needs across various COVID-19 related key professions. ‘Key workers face social and emotional struggles during COVID-19 crisis’ - Exposition of a study on the experience of frontline key workers during the pandemic. ‘Mitigating the employment and social effects of the COVID-19 pandemic’ - European Parliament policy briefing by the EMPL committee. ‘Truck driver woes: Adverse conditions for millions of key workers on Europe’s roads’ - Video exposition on some of the problems that truck drivers and other European key workers are facing during the pandemic.
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DG/EMPL II Directorate-General for Employment, Social Affairs and Inclusion II
Directorate-General for Employment, Social Affairs and Inclusion II (DG/EMPL II) With furlough schemes shielding up to 45 million Europeans from unemployment about to end, what steps should the Member States take to get as many people back to work as possible, while ensuring an adequate safety net for all? By Ahmad Raza (UK) and Mohtaram Gasimova (AZ) 1. The topic at a glance “You can’t keep the economy on steroids for too long, because this is not viable and you have to allow some reorganization,” said Stefano Scarpetta, Director of Labour, Employment and Social Affairs at the Organization for Economic Co-operation and Development (OECD). Since the COVID-19 virus first came to Europe, lockdowns began to be implemented across Member States, reducing the number of people at work. As unemployment became a threat to millions of Europeans, a top priority of governments was to ensure job security. Hence the governments introduced various unemployment protection mechanisms, including furlough schemes. To protect their labour force, even Member States such as Ireland that did not have sufficient budgets for furlough measures rushed to build such unemployment safety nets. In the midst of the coronavirus crisis, this approach “was particularly appropriate because it was a way to save jobs that were totally viable but could not operate” under the lockdown, said Scarpetta. However, as economic activity is gradually restarting following the easing of lockdowns, several Member States will be moving towards cutting the social aid provided within these schemes. In addition to the 5.5 million jobs lost across the European Union (EU) due to the pandemic, 45 million more are at risk as the furlough schemes in most countries are currently under review or coming to an end. These emergency schemes are increasing the economic pressure on governments, thus pushing them to consider alternative measures for protecting workers. Whereas countries like Germany have decided to extend their furlough schemes, many others are instead investing in creating safe conditions for workers returning to their posts. More generally, there is a great disparity in social policies regarding COVID-19-related layoffs across different Member States, making the path to a unified EU response more uncertain. 2. Key Terms • Furlough: is the temporary and involuntary suspension from work without pay, for a duration specified by the employer. 20
• Furlough scheme: is a large-scale systematic plan where governments pay a percentage of the wages of employees unable to work due to COVID-19 measures. • Labour force: a collective term for all persons above a certain age that are able to work in a specified time period. This includes people in employment and the unemployed. • Redundancy: also called a layoff, is a form of temporary or permanent dismissal from employment. Employees made redundant remain eligible for some benefits, such as redundancy pay. • Unemployment: according to the OECD, refers to members of the labour force being available and willing to work but not in paid employment or self-employment. • Unemployment Rate: is the percentage of the labour force that is not in paid employment. • Single Market: is an association of countries trading with each other without restrictions or tariffs. The European single market ensures the free movement of goods, services, capital, and people within the EU. 3. Key Actors and Stakeholders • The Organisation for Economic Co-operation and Development (OECD): is an intergovernmental economic organisation that provides a platform for countries to seek answers to common problems by sharing good practices and policy suggestions as well as coordinate domestic and international policies. In particular, the OECD has proposed various policy responses for economic recovery following the COVID-19 pandemic. • The European Commission (EC): as the executive branch of the EU, responsible for proposing and implementing EU-wide legislation. In the area of employment and workforce protection, the EC provides frameworks that the legislation of Member States must comply with. In particular, DG EMPL is the department of the EC responsible for Employment, Social Affairs, and Inclusion. • The Directorate‑General for Economic and Financial Affairs (DG ECFIN): is the department of the EC responsible for EU policies promoting economic growth and recovery, higher employment, stable public finances, and financial stability. • The European Parliament (EP): is one of the legislative bodies of the EU that adopts the legislation proposed by the EC, together with the Council of the EU. In particular, the EMPL Committee of the EP is responsible for employment and social affairs. • Member States: Various areas of employment and social affairs defined by the Treaty of the Functioning of the EU (TFEU), particularly employer and workforce protection, are shared competences. This means that EU legislation takes precedence, whereas Member States can make their own laws if the EU has chosen not to do so. In general, responsibility for social and employment policies lies primarily with national governments, with the EU monitoring the application of existing legislation and coordinating best practices. • European Economic and Social Committee (EESC): is a consultative body of the EU that unites various economic interest groups across the Single Market. In its advisory capacity, the EECS urged the EP to lead a united response to the pandemic. 21
• European Trade Union Confederation (ETUC): is an organisation that aims to ensure that the EU is not just a single market for goods and services, but is also a ‘Social Europe’ that improves the well-being of workers and their families. The ETUC General Secretary has also taken a stance on the COVID-19-related employment precarity, calling upon the EC to financially support workers. 4. What has been done so far? Designing the general direction of EU responses to the pandemic, the European Council outlined various policy approaches for economic recovery. Acknowledging the increased cost of unemployment support schemes, the EC recently moved to support 15 Member States by creating and utilising the European instrument for temporary Support to mitigate Unemployment Risks in an Emergency (SURE). Under this scheme, Member States receive loans with favourable terms to finance their national short-time work schemes. Member States have taken various routes to tackle this problem. For instance, the French scheme pays government subsidies to companies to fund the salaries of those unable to work as a result of the pandemic. Owing to the success of this approach, its initial time frame was extended until the end of 2020. In contrast to their neighbouring country, the Belgian Government discontinued its COVID–19 furlough scheme from August 31, 2020, yet continued to provide support to certain companies that were particularly affected by the pandemic until December 31, 2020. Finally, in Germany, the system of Kurzarbeit (short-time working) can pay up to 87 percent of net wages. At the height of the lockdown, 10.1 million workers were on furlough, including a third of the workforce in the industrial sector. In May 2020, 7 million workers received such payments, with the number falling to 5.6 million by July of the same year. The coalition government is extending the programme until the end of 2021. With financial support schemes proving increasingly costly for Member States, many national governments have shifted their policy focus to retraining and reutilising at-risk workers to keep them in employment. In their roles of sharing best practices, the EC and the OECD have compiled depositories of vocational training approaches and resources. For instance, France is recruiting thousands of new counselors to provide individuals pursuing employment with a more personalized direction towards professions that are safer from the coronavirus uncertainty. 5. Key Conflicts While many workers’ unions continue to demand that furlough schemes be extended, financial limitations force EU governments to encourage returning to work, despite the impending second wave of COVID-19 in Europe and the consequent economic contraction. Accounting for a fifth of employment under protection schemes, the most vulnerable of the 45 million workers at risk of unemployment due to COVID-19 are active in industries including tourism, travel, hospitality, and 23
entertainment, which are struggling as a result of lockdowns. This process also concerns many workers entering temporary, viable jobs, while they are discouraged from entering fields with long-term benefits. While this short-term approach currently solves the problem of mass unemployment across Europe, it could cause economic instability for many individuals in the long run. In fact, several economists argue that extending the furlough for some workers will not solve the inherent vulnerability of most at-risk professions, instead simply ‘delaying the problem’ and likely feeding into future economic crises. In fact, the longer the furlough scheme is, the less likely it is that companies can ‘flick a switch’ and go back to the same level and patterns of employment as before. As consumer preferences shift, and the supply and demand for products become different, more and more companies risk becoming zombie businesses. However, if the furloughs are not extended, many businesses will have to either consider redundancies or reduce working hours, which will result in further financial issues for workers. Since the responsibility for employment and social policy lies primarily with national governments, the EU’s efforts to coordinate best practices for social security schemes may be obstructed by the many different approaches and situations that Member States are faced with. This raises the question: What methods can the EU utilise to supplement national approaches, while ensuring that the country-specific strategies are most suitable for the goal of minimising unemployment? Finally, the confidence level of people going to work physically varies significantly across Europe, mainly due to the safety measures in place as well as the confidence of their governments. According to a recent survey in which 8000 adults from 8 countries were questioned about returning to work, citizens of EU countries such as France, Germany, and Italy were more positive about returning to work than those of non-EU countries, such as the United States. These Member States were also less concerned about a second wave and hence many workers had begun to return to work, for instance, 83% of French office workers had returned to work prior to this poll. Additionally, government legislation in Italy encourages companies to ask employers to work remotely for as long as possible, until the spread of the virus begins to ease. However, not long after lockdown eased across the EU and companies began requesting that all workers return to their posts, coronavirus cases increased again, thus indicating a second COVID-19 wave and putting into question the viability of this approach. Acknowledging the poor COVID-19 safety measures in some workplaces, what steps should the governments take in order to ensure that returning workers are provided with a safer environment during the second wave of coronavirus?
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6. Questions to consider • How can the EU motivate governments to provide employment that is sustainable in the longterm and durable against the pandemic, without triggering financial issues for these workers in the future? • While Member States introduce new legislation in order to support workers physically returning to work, how can they also sufficiently support smaller businesses to prevent them from shutting down? • With many Member States already experiencing a second spike in the number of COVID-19 cases, how can the EU further encourage governments to adapt working conditions to limit the spread of the virus? • Acknowledging the extension of furlough schemes in some countries, what are some shortand long-term positive and negative aspects of this approach? 7. Further links ‘Europe pays high price to keep workers paid, as U.S. squabbles over stimulus’. Comparative analysis of the EU’s previous and current policies in comparison with those of the United States. ‘How to adapt furlough schemes for ‘Phase Two’ - An analysis of problems with the existing furlough schemes in the EU and evaluation of potential pathways for the future. ‘Beyond the coronavirus crisis: How will the EU economy recover from the border shutdowns?’ - An older video explaining the initial EU ideas on economic recovery following the coronavirus pandemic. ‘COVID-19: EU’s plan to save the economy’ - A video exposition of existing EU measures for postCOVID-19 economic recovery and of future policy plans. 24
DG/GROW Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs
Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG/GROW) As the ‘gig economy’ providing flexible and easily accessible on-demand work in industries such as ridesharing, food delivery, and personal and household services has expanded across Europe, challenging the conventional definitions of employer-employee relationships, what regulatory frameworks should apply to them? By Ninni Norra (FI) and Ștefan Tatu (RO) 1. The topic at a glance As of 2016, one out of four employees were employed on atypical or non-standard contracts. Therefore, it is safe to say that non-standards jobs have grown more common due to developments in the labour market, such as rising digitalisation and the creation of new business models. In the socalled gig economy, temporary positions and short-term contracts with autonomous workers are the norm. The gig economy has multiple advantages for both employees, allowing them to work flexible hours and offering a wide range of job options, and employers, as this sector is generally profitable. Nearly 2% of all European employed citizens have the gig economy as their primary source of income, and up to 8% earn sporadic revenue from gig work, according to a study conducted by the Joint Research Centre. Since gig workers are not restricted to a single employment relationship, they might take on multiple activities concurrently – likely under varied circumstances and even with another employer – and earn income in more than one Member State. However, since the employment and tax regulations regarding gig workers vary between Member States, it is difficult to have a rigorous legislative framework covering the basis of the employee-employer relationship. Furthermore, the status of gig workers is even harder to regulate, as very few gig jobs come with any sort of advantages when it comes to social security systems. While some long-term contracts may have narrowed benefit packages, even this is uncommon. In effect, workers in the gig economy have more flexibility and autonomy than conventional workers. While this may indicate a vaster range of choice for the individual worker, it also implies that the certainty of a steady job with fixed pay, benefits, and a routine that has portrayed work for generations is swiftly becoming a thing of the past. Even if gig workers face stressful working conditions, as they have less social protection and are prone to loneliness, they still work in this field, since they are dependent on the income they receive. It is likely that this trend will not fade any time soon. By providing a fitting legal framework, the European gig economy can efficiently sustain both the employers and employees’ needs, taking the lead in what looks likely to become a new norm of
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labour market development. 2. Key Terms • Gig economy: A free market system characterised by the prevalence of temporary contracts between organisations and independent workers. While providing adaptable and innovative solutions, the gig economy is often criticised for its lack of clarity in legal issues and economic relationships. • Employment protection legislation (EPL): Measures designed to protect the rights of an employee. Legal scholars have suggested redefining employee status to improve the working conditions for independent contractors. • Independent contractor: A worker acting as a separate business entity. Though exercising significant freedom, an independent contractor lacks the legal protection reserved for employees. • Sharing economy: A community-based model of economy, where goods and services are facilitated through collaboration. • Digital inequality: A social rift caused by unequal access to digital services. This is extremely harmful in a gig economy where online platforms play a key role. 3. Key Actors and Stakeholders • The European Commission (EC) is the executive body of the European Union (EU) responsible for proposing legislation, implementing decisions, and upholding the EU treaties. When it comes to the gig economy, the EC, through the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG/GROW) and the Directorate-General for Employment, Social Affairs and Inclusion (DG EMPL), is in charge of regulating the labour market and supporting fair working conditions. • The Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) is a part of the Council of the European Union and consists of all Member States’ ministers responsible for social and employment policy along with relevant commissioners, tackling problems periodically in regards to gig economy workers. • The European Trade Union Confederation (ETUC) is the principal trade union organisation representing workers at the European level. It is actively involved in the gig economy workers’ rights, as they tried to clearly define gig workers and their status within the Union. • European Centre of Expertise for Labour Law (ECE) assists the European Commission in applying EU law in regards to the labour market and employees’ rights, and raises social awareness, by promoting debates on potential disputes. • Sharing platforms, such as Airbnb, Uber or Deliveroo, have a large workforce on standby ready to respond to changes in demand, canceling the need for fixed shift employment. Companies that employ gig workers often say that being an independent contractor provides more flexibility, but critics have said this often results in worker exploitation. 27
• Gig workers are the people employed in so-called atypical forms of work. They may work multiple jobs on a flexible basis, or on erratic hours. Research shows many people are joining the gig economy out of necessity, rather than choice, as they need to take multiple jobs in order to have a decent income. 4. What has been done so far? The European Pillar of Social Rights (EPSR) is one way through which the EC delivers new and more effective rights for citizens. The pillar builds upon 20 fundamental principles, including equal opportunities, access to the labour market and fair working conditions. Furthermore, in 2019, the EC put forward the Directive on Transparent and Predictable Working Conditions in the European Union, introducing new minimum rights, as well as new laws on how information on working conditions is provided to employees. The directive refers to anyone being paid to work at least 12 hours per month on average, including domestic, on-demand, seasonal, voucher-based and platform workers, as well as trainees and apprentices. However, self-employed workers are not covered by the legislation. Moreover, the European Agenda for the Collaborative Economy launched in 2016 by DG GROW not only defines what the gig economy means for the economic future of the EU but also outlines the close relationship between the gig economy and Small and Medium Enterprises (SMEs). The agenda explains applicable EU rules and policy recommendations to help citizens, businesses and Member States benefit from the new business types and support the stable development of the collaborative economy.
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However, this is just the beginning, seeing as the Commission has committed to improving the working conditions of platform workers during the 2019-2024 mandate. For this reason, they launched a process to ensure that those who want to participate in collective bargaining can do so, without the fear of breaking EU competition rules, guaranteeing fairness across the gig economy.
5. Key Conflicts As the world becomes increasingly fast-paced so does the economy. Demand for convenience has invoked a growing number of freelancers to offer services such as food delivery, transport and lodging. However, the flexible gig economy falls short of the structure provided by the traditional working environment, leaving gig workers anxious about future earnings. Benefits such as holiday entitlement, social insurance and pensions are largely reserved for standard employees which heavily 29
strains the personal security of gig workers. The on-demand economy is effortless for consumers yet places its workforce under a great amount of stress and instability. Employers, on the other hand, frequently choose a gig worker over a standard employee due to the lesser amount of restrictions and costs. The lack of legal protection has not gone unseen and freelancers can work overtime with little to no consequences. However, since adaptability is one of the most marketable assets of a gig worker, applying hefty restrictions could in turn drain the gig economy of its competitiveness. To improve the rights of independent contractors, it may be time to extend the protections of standard employees to non-standard workers. However, the arbitrary nature of the gig economy makes it difficult to create universally binding legislation, as the question of who exactly gains the protections and why is raised. The sharing economy, an important part of the gig economy, also has its fair share of challenges. While producing practical, social and environmental benefits, problems arise when businesses stray further from the essential idea. A prime example of this is sharewashing, a marketing technique in which regular companies promote their image via sharing economy language. A great deal of the gig economy is centered around online platforms. While accessible for many, those without proper devices are in grave danger of being left behind. Studies indicate that digital inequality mostly affects people of migratory background, older age and lower income, to name a few. In conclusion, many of the victims fall under the category of traditional minorities. To ensure universal accessibility, it is not enough to provide necessary devices as there is a rift in user skills. On average, men are more likely to utilise a device to its full capacity whereas women stick to basic functions. Furthermore, the gig economy is characterised by the application of latest technology. The innovative atmosphere is a source for endless ideas monetised by independent contractors, creating new opportunities. There are significant differences within countries however, as urban areas tend to be better equipped with modern tools. Rural areas do not always possess the infrastructure needed in many of the on-demand services. While generally stimulating economic growth, high reliance on advanced technology could spark geographical polarisation in development. The European Union is responsible for facilitating the gig economy and therefore must settle the trade-off between stability and growth. By extending protections more people would receive the basic comforts of social security and pensions. On the other hand, freedom can be considered a thriving force behind the success of the gig economy, and excessive regulation might constrain the ability of platforms to generate new employment. 6. Questions to consider 30
• How can the EU approach the gig workers and their rights, keeping in mind the wide variety of jobs they can work in? • Are gig workers eligible for professional qualifications, and how should these be defined and classified? • Based on the rapid growth of the gig economy, will legislative changes be sufficient to ensure the safety of the workers in the new field? • Is this new type of employment sustainable for all types of communities and societies? • How can the EU further develop new legislative approaches, keeping in mind that most sharing platforms are not based in Member States? 7. Further links A news article on the EU gig economy (infographic) Academic journal on gig economy protections An article on European welfare in gig economy Thematic factsheet on employment protection legislation An essay on the sharing economy
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