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Young workers and the quest for decent work

MAKING INDUSTRIAL RELATIONS WORK FOR DECENT WORK BRIEFING ON THE SITUATION IN ESTONIA

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Introduction Flexibility and youth employment In autumn 2008 the Estonian government made important changes to its labour market regulations, with new measures coming into force in July 2009. The aim of these changes was to increase the flexibility of the labour market, in order to increase the possibilities for young workers entering the labour market. The effect that these regulations will have on the quality of employment is not clear. As the experts at the Praxis Centre for Policy Studies have stated: “Further research is needed to ascertain whether this also means that it will be more difficult for young workers to receive and keep jobs of good quality”1. The last few years have proved that young workers are a vulnerable group in the labour market. The economic recession has hit them hard and the unemployment rate has risen significantly. The most difficult year was 2010 with the unemployment rate of young people age 15 to 24 rising to 32.9 per cent while the employment rate of this age group was only 25.3 per cent2. This remained the worse year of the decade and Estonia had the fifth highest youth unemployment rate in 2010 among European Union member states. In the last year the overall situation has improved and as employment increased, the employment rate of young workers also rose. In the third quarter of 2011 the employment rate in age group 15 to 24 was 34.8 per cent.

1 Young people entering labour market in Estonia. Praxis 2010 (www.praxis.ee) Page 8. 2 Source: database of Statistics Estonia (http://www.stat.ee/en). (ML35: UNEMPLOYMENT RATE BY SEX AND AGE GROUP; ML240: EMPLOYMENT RATE by Year, County and Age group)

Experts admit that there has to be extra attention to young people. However, decent work for young workers is not on the agenda of social partners and employers’ organisations. Some public institutions are still making an effort to improve the situation of young workers, as the main concern is to prepare youngsters to enter or re-enter the labour market. The Unemployment Insurance Fund is considering young people as a risk group and pays extra attention to them. The Labour Inspectorate has started an education programme to inform pupils about their rights and obligations in their future working life. Vocational schools are also trying to improve their training in order to match the demands of the labour market. Young workers themselves seem to view their situation relatively positively, even though at the same time they admit that the salary for the work they do is not enough. Further, they feel that no one represents them in their working relations. This Pilot Study investigates how industrial relations in Estonia contribute to achieving decent work for young people.


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“A considerable proportion of Estonian youth is willing to change his or her job easily, as 17.4 per cent of young people employed are ready to change their position on their own initiative within the next six months. Representatives of the trade unions, employers and the Unemployment Insurance Fund identified unjustified absence from employment as one of the problems characterising young workers”

Overview Youth employment patterns The recession affected Estonian’s labour market significantly. Between 2004 and 2007 the unemployment rate fell from 5.32 per cent to 2.08 per cent. Between 2008 and 2010 the unemployment rate rose sharply from 3 per cent to 12.3 per cent. According to the Estonian Statistics Office the employment rate of young people aged 15 to 24 fluctuated between 25 per cent and 35 per cent in the period 2000 to 2010. The best years were 2007 and 2008 when the employment rate was more than 34 per cent. Young people between 15 and 24 years of age work in the tertiary sector (two thirds of employed youth) and secondary sector (one third). The amount of young people in the primary sector has considerably decreased over the last decade. While in 2000, 5.8 per cent of employed young people worked in the primary sector, in 2010 this figure fell to only 2.3 per cent. Several reasons may explain such a trend, such as a diminishing need for labour and internal migration patterns, with youngsters moving to towns. Young people mainly fill positions in the processing industry, commerce, accommodation and catering, and construction work. Areas that require specific skills and knowledge – finance and insurance, research, water supply and sewerage, waste management, mining, energy production – involve fewer young people. Therefore, the main decrease in the employment rate of young people has been in the processing industry, construction, retail and wholesale, and motor vehicle repair. For example, in 2007 the employment rate of young people was 20.7 per cent, but by 2010 it had fallen to only 10.3 per cent in these areas. According to Estonian Statistics Office data, 24.6 per cent of employed youth work parttime and even more would like to work part-time (26.6 per cent)3. This is simply because 88 per cent of young people in the 15-24 age group (2010)4 study or follow some kind of training course, and a lot of them would like to do part-time jobs to get extra money for living expenses and acquire some work experience. According to a survey made by the Estonian Student Union in 20095, 21 per cent of students work full-time and 21 per cent part-time. The reasons are socio-economic: 62 per cent of students wouldn’t be able to cope financially, even after taking a student-loan. Moreover, for most of the students of vocational schools it is impossible to work full-time, because they are required to follow classes in schools. The grant for general educational costs is equal to 55.93 euros per month, and the additional support for transportation and living is 28.13 euros per month. These incentives are granted in vocational training and higher education. In general, young people work mainly during the day (between 6 a.m. and 6 p.m.) or evening (between 6 p.m. and 10 p.m.). Night-time jobs are more frequent among other age groups. It is essential to stress that 43.7 per cent of employed youth work in evening shifts. In comparison with other age groups, they seldom work more than 48 hours a week, but at the same time they are more inclined to work for 10 or more hours in weekdays than other employees. According to the Estonian Statistics Office, 26.4 per cent of employed youth work these sort of hours. This is probably due to the fact that they work part-time or within some other special form of employment relationship. Moreover, a considerable proportion of Estonian youth is willing to change his or her job easily, as 17.4 per cent of young people employed are ready to change their position on their own initiative within the next six months. Representatives of the trade unions, employers and the Unemployment Insurance Fund identified unjustified absence from employment as one of the problems characterising young workers.

3 Source: database of Statistics Estonia (www.stat.ee/en) (TKU03, TKU05) 4 Source: database of Statistics Estonia (www.stat.ee/en) (ML4511: INACTIVE PERSONS BY AGE GROUP AND REASON OF INACTIVITY) 5 http://www.eyl.ee/public/files/Tudengite_ olukord_detsembris_2009.pdf


Though the transfer from the education system to working life is mostly relatively smooth, there are some problems which affect young people in their working life:

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• Quality issues of vocational

training and higher education (e.g. in some specialities it is very hard to find a job after graduation, even if there are a lot of vacancies); • Vocational training is a

“dead end” for those who aim at higher education;

The legal framework

• Withdrawal and drop out from

education is relatively high (e.g. socio-economic reasons); • Insufficient career

counselling.

The main challenges young people face in their working life seem to be related to a lack of experience and working skills, insufficient knowledge of labour laws and willingness to take unnecessary risks. Young people with little or no experience have difficulties in entering the labour market and accept low-paid jobs, with neither insurance nor social security, little safety standards and no pension contributions. For example, 20-year-old Aiko interviewed by JMK said he was willing to work for 3 euros per hour. When he had his first jobs a few years ago, he was willing to work even for much less, 30 Kroons (1.92 euros). It should be noted that the minimum wage in Estonia is equal to 1.80 euros per hour, or 180 Euros per month (in 2012). The Labour Market Services and Benefits Act defines unemployed persons in the 16-24 age groups as a “risk” group in the Estonian labour market. As a result, young people are counted as long-term unemployed after only 6 months, instead of the usual 12 months. This makes some services available to them earlier than for other unemployed groups: • A wage subsidy for employers who hire a young person who has been without a job for more than six months; • A training voucher for job seekers to a maximum value of 2,500 euros for obtaining vocational or other training, to help improve working skills and to get a proper job. The training must be agreed with a job mediation consultant, who will decide whether or not the training is justified, based on an individual action plan. The most popular services of the Estonian Unemployment Insurance Fund are practical training and apprenticeship/trial weeks, which are implemented in cooperation with employers. A job seeker can try out in one week or several days, how he/she will manage this job and how he/she likes it. Also, this is a good opportunity for the employers to see how the job seeker manages to deal the work assignments and what kind additional training she or he would need. Moreover, students of different schools believe practical training is a good way to improve their skills and get the first real job. Yet, this is not always a secure choice. Employers may offer a real job before pupils reach graduation, tempting youngsters to leave school without a qualification. This is then something which they might regret in the future when finding themselves trapped in a spiral of precarious jobs. Aiko (20) stated in his interview: “They saw that I worked hard. And so the owner said that I should quit school and start working full-time, that I wouldn’t need the papers to work and that I had a job right there”. Though the transfer from the education system to working life is mostly relatively smooth, there are some problems which affect young people in their working life: • Quality issues of vocational training and higher education (e.g. in some specialities it is very hard to find a job after graduation, even if there are a lot of vacancies); • Vocational training is a “dead end” for those who aim at higher education; • Withdrawal and drop out from education is relatively high (e.g. socio-economic reasons); • Insufficient career counselling. A problematic group in the labour market are young people who don’t have any working skills due to an inappropriate education/training system, especially those who have finished only basic school (or even not that) or who don’t recognise the need for further education or vocational training. They have difficulties in finding a job, because of lack of work skills and experience, and risk to staying out of the labour market for longer periods. For this reason there are some initiatives to help them back to working life or to school and training. For instance, the Tartu Rahvaülikool, a free education movement,


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offers free training to improve learning skills, study sessions on Labour Law, career planning and art therapy. This is tailored for those young people aged 17 to 35 who have completed only their basic education or less. There are similar programmes at the higher education level for students, who withdrew from their studies during the economic boom because it was easier to go to work and earn money. The goal of such programmes is to bring back young people into education, re-starting from their interrupted studies to obtain the desired qualification. For example, the Tallinn University of Technology has a programme called “VÕTA” (APEL = Accreditation of Prior and Experience-based Learning), which takes into account the prior learning and professional work experience of a person if he/she wishes to continue unfinished studies or fulfil admission requirements.6

Industrial relations Weak dialogue and a failure to represent young workers Labour relations and employment policy in Estonia are under the authority of the Ministry of Social Affairs. The relations between employer and employee are regulated by the Employment Contracting Act, which stipulates the main rights and obligations of both sides. In terms of decent work and industrial relations, the act places an obligation on employers to inform workers about the safety rules, working conditions, the conditions of valid collective agreements and other relevant information. However, the Act doesn’t cover dialogue, consultation or involvement of the workers, which are the subject of collective industrial relations. The most important Acts regulating industrial relations are: The Trade Unions Act, stipulating the main rights of the unions, main principles of the organisation, and relations between social partners. For example, information and consultation rights, the conclusion collective agreements, the inspection of working conditions at the workplace and submission of proposals for draft legislation. The Trade Union Act also places some important obligations on employers. If trade unions propose to start negotiations on relevant issues, the employer has to accept. The Collective Agreements Act, regulating negotiations (bipartite and tripartite; national and local level) and dialogue on employment conditions and policy issues. The tripartite negotiations between the Estonian Trade Union Confederation, Estonian Employers Confederation and the Government are regular and take place every year. The main topics of the negotiations are: the labour market, social security, work environment and vocational education.

6 Tallinn Unversity of Tehnology http://www.ttu.ee/apel


“Professor Raul Eamets, Head of the Institute of Economics (University of Tartu) has described the situation of industrial relations as follows: “collective industrial relations have a minor relative importance in Estonian labour market” and admits, that the most important role is held by the State: “It intervenes at the legislative, administrative and jurisdictional level. … In the administrative sphere, the government makes a direct contribution to the collective regulation of working conditions. It is also responsible for inspections (Labour Inspectorate), contributions to the resolution of collective disputes, and a range of administrative duties”

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Tripartite dialogue also takes place in other forms. The social partners are represented in supervisory boards of most of the important labour market and social security institutions (Estonian ILO Council, Social and Economic Council, Estonian Unemployment Insurance Fund, Estonian Health Insurance Fund, etc) and involved in relevant working groups. Despite these measures, industrial relations are not very effective. Tripartite social dialogue and industrial relations at the national level have made important achievements but also failed on some issues. For instance, at the local level, social dialogue is virtually absent. Professor Raul Eamets, Head of the Institute of Economics (University of Tartu) has described the situation of industrial relations as follows: “collective industrial relations have a minor relative importance in Estonian labour market” and admits, that the most important role is held by the State: “It intervenes at the legislative, administrative and jurisdictional level. … In the administrative sphere, the government makes a direct contribution to the collective regulation of working conditions. It is also responsible for inspections (Labour Inspectorate), contributions to the resolution of collective disputes, and a range of administrative duties“7. Further, trade unions are relatively weak and represent only a small part of the workers. One of the main reasons is the financial situation of the unions. For this reason they prioritise representation of their members and do not always defend the interest of all workers. As the chairman of the Estonian Transport and Road Workers Trade Union Mr Peep Peterson admitted they do not defend the interests of young workers as much they should. According to data from Statistics of Estonia (Eesti Statistikaamet) almost no workers in the 15-24 age group belong to trade unions and they don’t feel that the unions are representing their interests well. This aspect was also mirrored in the interviews. When JMK asked Liina (23) who represents her in the employment relationship, she answered: “It has to be me. Nobody else can do it.”

Good practice Learning by doing Labour Law lessons in schools The Labour Inspectorate in cooperation with high schools and vocational schools organises lectures for pupils. The aim of these lectures is to show through practical examples the risks inherent in the working life, the rights and obligations of the workers, different labour law principles and different Labour Market institutions. In the year 2011, 1,412 pupils participated. The Labour Inspectorate plans to widen the target group and to involve basic schools.

Cooperation of social partners in developing vocational training 7 “Decent Work Country Report – Estonia“, Raul Eamets (2008). Page 61, 64

The quality of vocational training is a common concern for all the social partners. Cooperation in developing vocational training standards and curriculum takes place at different levels.


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One good example of effective industrial relations is the creation and work of Kutsekoda (Estonian Qualifications Authority) which develops the vocational qualifications system and links the education system with the labour market. All the most important Labour Market institutions are involved in the work of Kutsekoda. Further, social partners contribute to the development of vocational education by participating in the supervisory boards of the vocational training schools. The initiative to develop vocational training as such can also come from social partners. For example, the Estonian Unemployment Insurance Fund discovered that many graduates of the vocational school specialising in IT were registering themselves as unemployed soon after concluding their training. It turned out that these courses were not particularly useful as their skills were not matching the needs of IT-companies. As a consequence the vocational schools and employers were brought together by the Unemployment Insurance Fund to increase the efficiency of training and improve the curriculum.

Special programmes for risk groups Young people without qualifications, the long-term unemployed, and young people who live in the rural areas and who don’t have the mobility to go to school or work may need individualised help. Non-Governmental Organisations and some vocational schools endeavour to help such risk groups join the labour market. For example, a project called “Unemployed youngsters to vocational school” was initiated by one vocational training school and was implemented together with local governments and different NGOs. This project targets young people in the 16-29 age group, who have only basic education or less. The aim is to give them vocational skills, and also give different services to help overcome obstacles to learning or working. They get case management, career counselling, financial support and even childcare in the same school where they learn.

Modern communication channels Young people use actively modern communication tools – e-mail, social media, text messaging. The Estonian Unemployment Insurance Fund has opened a Facebook page and self-service system in their homepage www.tootukassa.ee. Also the information system of Estonian Unemployment Insurance Fund can automatically send e-mails with information about vacancies to many users, so the job-searchers have easy access to correct and fresh information. These possibilities are an advantage for young people, because most of them have good access to the internet.


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About the project “Making Industrial Relations work for Decent Work” is a one-year project which looks to intensify the cooperation and mutual learning of relevant actors - employers, unions, NGOs, think tanks and workers – to identify the role as well as the tools and models needed for effective industrial relations, with the ultimate aim of combating precarious employment and realising decent working conditions and quality jobs for all. This briefing, coordinated by SOLIDAR, was produced by SOLIDAR member Johannes Mihkelson Centre (JMK) in Estonia. www.jmk.ee

Conclusions Social partners failing the young Social partners are considering young people as a risk group in the labour market. Yet youngsters do not feel represented by them. Industrial relations’ practises focus mainly on increasing the quality of vocational training rather than the quality of jobs as such, but try to prepare young people for working life in other ways, for instance with lectures about Labour Law. Decent work for young workers does not feature on the political agenda of the trade unions or the employers. The participation and involvement of young workers in industrial relations’ practises is low. To a certain extent, it can be asserted that social partners try to address young workers’ problems without involving young people themselves. Young people recognise that practical training is one of the best methods for learning skills and integration in the labour market. Yet practical training is not always safe. As our interviews showed, it can lead to illegal work and the exploitation of inexperienced young people.

All “Making Industrial Relations work for Decent Work” pilot studies are available on www.solidar.org SOLIDAR is a European network of 56 NGOs active in over 90 countries working to advance social justice in Europe and worldwide. SOLIDAR voices the concerns of its member organisations to the EU and international institutions across the policy sectors social affairs, international cooperation and lifelong learning.

Recommendations • Continue the development of vocational training in cooperation with the social partners.

Vocational schools and basic schools should pay more attention to introducing a basic knowledge of labour law. Pupils need a thorough knowledge of what decent working conditions are, to understand what quality jobs mean and to advocate for their rights. • Social partners should consider developing and financing special training programmes,

which try to solve what the labour market views as the shortcomings of the education system. For example, short training courses on how to deal with job-interviews, thereby improving the youngsters’ self-expression. • Trade unions should take responsibility and defend young workers’ interests. For

Author: Heiki Järveveer (JMK) Responsible editor: Conny Reuter Editor: Sara Hammerton Project Coordinators: Adeline Otto and Francesco Zoia Bolzonello Publication Coordinator: Abigail Goundry Printed on recycled paper ©SOLIDAR March 2012

example the Estonian trade union confederation should hire youth experts to increase know-how about the specificity of young workers and youngsters entering working life. These people can support the tripartite social dialogue on youth issues, participate in other forms of industrial relations, and have a counselling role. • Industrial relations’ stakeholders need to use modern communication channels to

inform young people about different aspects of working life (working skills descriptions, available training programmes, trade union activities, good and bad examples of working relations, etc.).The labour market institutions (especially the Labour Inspectorate and Trade Unions) should think about web-based guidance/counselling systems to give reliable information about crucial topics of working life. • Raise awareness among society about the wages and working conditions of young

workers. All social partners should recognise that, in the view of an ageing population, the current younger generation will probably work longer: for this reason their health and well-being has to be preserved. In other words, the social partners and the State have to guarantee decent work for a decent life.

This publication has been produced with the assistance of the European Union. The content of this publication is the sole responsibility of SOLIDAR and can in no way be taken to reflect the views of the European Union. Supported by DG Employment, Social Affairs and Inclusion.

decent work decent life


SOLIDAR Briefing 43: Young workers and the quest for decent work