The Role of Flexicurity in Europeís Future

Emmanuel Jahan, Employment and Social Affairs Representative for the Air France-KLM Group, examines the role of flexicurity as a socio-economic model for the future. He will be addressing delegates from across Europe at the high-level conference, Employment Week 2007, taking place in Brussels from 5-6 June 2007.

Flexicurity is a macroeconomic concept used at national and European levels. It is totally or partly implemented in a few member states but remains only a model, maybe a theory for many other member states.

This paper focuses on the main role of enterprises that make up the network of national and transnational economic powers. Institutions, administrations and regions play a key role in reducing unemployment and facilitating job seeking but they have not been set up to create value.

1. A socio-economic model based on trust
Flexicurity is a macro socio-economic model which aims towards flexibility combined with job security to cope with restructurings in the context of Globalization. It should involve rights attached to the person and not to the occupied job.

This short definition actually leads to complex processes and all of them are based on the trust invested by employees and employers in the management of jobs at each level (undertaking - local / regional - national - European - global).

Thus, the level of the undertaking could be seen as the first step to change the way people think and to reach a macroeconomic flexicurity which includes numerous players and stakeholders. But a one size fits all member States is unrealistic: national cultures have a say in the matter too.

Is an enterprise a relevant social model for flexicurity?
In Europe, enterprises are a major part of the occidental society. Porosity exists between the European way of life and the demands of workers in the scope of firms. Everyone needs more individual freedom linked to an adapted flexibility, more responsibilities but also more job security. This trend should be taken into account by the employers through their employment infrastructure (including social times such as parental leave, voluntary part time, etc.).

This idealistic picture does not overshadow a reality where the insiders (full-time and / or long-term work contracts) and the outsiders (part-time, short-term work contracts, temporary workers, etc.) create labour segmentations. Firms gather these typologies of workers in their own organisations related to the member Statesí labour markets.

Flexicurity is obviously a macro socio-economic system that should exclude a micro socio-economic approach but the role of enterprises should contribute to a move away from a labour market based on one job for life to an inclusive labour market that aims at a job for you. This principle could be implemented in some companies by covering workers with a corporate floor of rights (taking into account the fringe benefits) in compliance with the labour laws.

But this corporate floor of rights cannot replace neither a consolidation of the national and European fundamental rights to reach a national flexicurity nor a solidarity extended to many fields beyond the scope of the enterprise (bank loan, accommodation rent, nurseries, etc) to enforce an inclusive labour market. A formal - or informal education, health and safety are such rights, shared between states, regions and social partners.

In this context, a large-size enterprise should provide a balanced response to individual requests and entrepreneursí needs.

To sum up, the enterprises cannot take full responsibility of the national or transnational social systems. They must design, produce and sell first. But some of them could prepare workers for the flexicurity process in the framework of the European and global labour market.

Which way to restore trust?
Nowadays, for transnational groups or large-sized firms, geographical or occupational mobility with the relevant guaranties are often only the focus for a few select managers. This view strengthens a Human Resources policy in two ways: one for the top management and another one for other workers. Mobility and flexibility for other workers are often the last policy to achieve a restructuring instead of an accepted continuous social policy.

However, large-sized firms or groups could be seen as a micro and autonomous socio-economic system whereby flexibility and security could work together. To achieve such a system and to get a counterpart of flexibility, an internal social policy should anticipate and accompany restructuring in order to develop employment, ensure careers, wages, training, occupational and geographical mobility.

These enterprises should be innovative to promote their own mobility and flexibility with a work - life balance approach based on the following items:

- Anticipation for major restructuring

- Training to maintain employability with guaranties for wages and a career

- Permanent restructuring to face global competition

- Subsidies for geographical mobility

- Encouragement for individual projects, occupational and geographical mobilities

- Facing the ageing workforce because the full retirement age is now later

- Fostering new national policies to ensure longer careers by adapting working time, the working conditions and consequently the wages

- Etc

In some countries, atypical work contracts need to be secured to reach a full acceptance by the workers. This should involve more flexibility for other work contracts in order to make the corporate social body more coherent. Thus the companyís workforce segmentation should be reduced . Such a policy goes through agreements with social partners.

Cultural questions need to be highlighted for transnational groups. But they should be considered not only between a company and its subsidiaries but also between younger workers and older workers, especially in the context of training needs. Thus, some older workers do not accept to be trained (ex: new technologies) through fear of failing or losing authority faced with younger workers.

2. The distrust of the workers in the Mediterranean and continental social models

For the Mediterranean and continental labour models, flexibility is usually linked by the workers to an unsecured job. This is enforced for global, multinational or transnational enterprises.

Job insecurity is not only related to unemployment but also to poor working conditions and to geographical or occupational mobility.

In these social models, workers are usually provided with either a life-long/ full time job by one or few enterprises or used as flexible manpower with interim, non-voluntary, part- time or short-term employment contracts.

The outsiders are subjected to flexibility and lack of job security. They often form a small part of the personnel of the large-sized firms and do not represent a social counter-power.

The insiders carry out their duties in a scope restricted to the one of their own company or group. The workplace is considered as their world in spite of its unsteadiness. Moreover, social negotiations and HR policies are mainly focused to employment and wages inside the undertaking.

In this environment, the company is already a guaranty of employment for the insider worker and the word flexicurity is only understood as flexibility.

This feeling is sometimes enforced by the use of sub-contractors whose role remains strategic for enterprises not only to regulate costs but to also share human resources with other companies for particular jobs. Sub-contractors are targeted to be more productive by focusing on low qualified jobs or conversely high qualified jobs.

Even if abuses exist (and they must be condemned), it is easier to link jobs from sub-contractors to uncertainty than to understand their role in the industrial processes or services. They are in accordance with the need of the undertakings to increase activities (and consequently the jobs for both). It must be remembered that SMEs make up a significant proportion of employers.

How to reach internal or external flexicurity?
A floor of rights is a realistic forecast to achieve such a goal. How to lay down this floor of rights at the national and European levels? The question is open. However, it seems that elements already exist but they need to be put in convergence and coordinated:

- Portability of rights for the pensions

- Portability of rights for training and life long learning

- Acquisition of rights in case of unemployment (active policy) or mobility between two enterprises

- Fundamental rights for all work contracts by fostering a convergence of the national and European rights.

- Etc

3. The Barriers of the flexibility for firms

Flexibility at European Union level
Flexibility is claimed by enterprises but they must overcome many barriers or obstacles for cross-border mobility:

- No convergence for European labour rights to enforce transnational mobility of the workers in respect of a fair competition.

- Uncertainty for the legality of the agreements between social partners.

- Complex administrative procedures for a worker to settle in another member state.

- The portability of pensions is not yet a reality.

- Retirement ages vary from one country to another. Member states are competent but enterprises are also concerned especially in the case of early retirement schemes, posted workers and particular retirement systems.

- Which rights are applicable in case of a dispute for transnational mobility (national labour laws or the Rome convention?).

- Training to ease restructuring is a main issue but access to European funds is too complex.

Flexibility at national and regional levels
The role of the national collective bargaining system is fundamental. Social dialogue is a means to succeed but the main role has to be delegated at an enterprise level to better assess the needs of employment and restructuring.

Better flexibility at national and local levels involves:

- A decrease in the numerous and various work contracts in a few member states that involve a loss of legibility, especially for young people.

- A reform of the national labour laws to input the principles of flexicurity and to take into account the need of permanent restructurings.

- An enforced role for social partners with better procedures for information and consultation in a few countries. Sometimes, there are contradictions between the work councilís roles at European and national levels or local and national levels.

- An improvement in training and education with more efficient links between universities / schools and enterprises.

Flexibility at corporate level
Although flexicurity in a firm is often a new concept, it is actually increasingly implemented without being named as such. Restructuring has to be led with pragmatism.

To face globalization and its reorganizations, enterprises need more flexibility to secure their own economic activities and employment. In addition to the items mentioned in this paper, the following issues should be part of a social agenda:

- How to draw up employment strategy to promote a life - work balance via agreements between social partners?

- How to secure if necessary, some atypical work contracts?

4. Conclusions
Large-sized firms have a role to play to make flexicurity a reality in some countries. They need legal tools, dialogue and secured agreements with social partners and the help of Member States, regions and European and national institutions.