The Real Challenge
by Véronique Willems (SMEunited)
Only a year ago, the Social Summit was held in Göteborg to proclaim the European Pillar of Social Rights (EPSR), in the presence of the European social partners. A policy framework reminding of the ‘Community Charter of the Fundamental Social Rights of Workers’ of 1989, which defined the framework for the years to come. Since then, we built up an impressive social acquis with numerous directives, regulations, etc. setting out minimum standards for working conditions, paving the way for a level playing field for workers and enterprises, and preventing a race to the bottom.
Now, the world of work is changing. It is time for reflection on the way forward. We need to ask ourselves: which challenges do we have on the labour market? How are they best tackled? And very important: which roles do the national and European level have? This time around, more legislation is not necessarily better legislation.
In their contribution, Luc Cortebeeck and Chris Serroyen warn for unrealistic expectations of Europe, even wondering what the term ‘social Europe’ means. They point to the need for a balance between economic, social, and ecologic objectives. However, after a promising start, they continue to depict the Pillar as merely a selling talk and call for new rights, linking the establishment of such rights to the recovery of trust in politics.
According to SMEunited, this is the wrong way to approach what Europe could and should do to address challenges stemming from our quickly changing environment, and it is also the wrong way to define how trust in politics is gained.
The EPSR is an important set of principles. A tool which can guide the way social policies are designed. It expresses the foundations of the social welfare state that we have built in the core of Europe, which created a level of social protection unmatched in the world. Now, we need to adapt to the new world of work, not by making the Pillar a “working agenda” for the EU, as the authors claim, but by using it as a compass for addressing issues at the appropriate level.
The future of work
Digitalisation, globalisation, greening of the economy and demographic developments are having a tremendous impact on the world of work. The rise of new business models (e.g. platform work and emerging sectors, raises questions to the organisation of our labour markets as we know them. SMEunited’s first priority is making sure that our SMEs are ready to adapt.
The impact of these technological and societal developments is felt strongly by SMEs. Global value chains are changing, the social protection systems to which employers and employees contribute are under pressure, and increasing skills shortages are a main obstacle for growth of Europe’s SMEs. It is therefore crucial that the transitions in the economy are managed well, so that SMEs can connect to the digital highway. Employing 67% of the workforce, this is a crucial step in keeping Europe ‘social’.
In the SME scenario for the future of work, the aim is to ensure that everyone can operate with confidence and certainty in the modern economy. SMEunited has made several proposals for shaping the future of the European economy and labour market. We advocate a strong focus on creating the right conditions for self-employed across Europe, giving also a particular role to entrepreneurship education and ensuring everyone understands the risks and opportunities. Entrepreneurship and transitions between job statuses should be facilitated. Additionally more efforts are needed to up- and re-skill people to maintain employability.
In the modern economy, SMEs need a level playing field, meaning respect for existing legislation and equal access to tools, data, and information, in cities and rural areas alike, in order to rise the tide across Europe and not only in cities. Therefore we cannot look at social policies alone. At least equally important is, for instance, creating fairness in B2B relations, ensuring that self-employed working with and on (online) platforms have clear information on their rights and obligations in their BSB relationship. A self-employed should not be offered a wage, as was the case in a real-life ad from a delivery platform. Aside from transparency on conditions, a self-employed offering products on or services to a platform, should not face unilateral changes in the terms and conditions. Such practices undermine the level playing field for SMEs in the digital era.
What we need is a constructive approach from all sides to grasp the opportunities and tackle the challenges deriving from the impact of the digital transformation on the world of work.
A decent level of social protection is also essential. Social protection systems are under pressure, and we need to anticipate to keep them sustainable. Representing self-employed and entrepreneurs across Europe, SMEunited strongly supports that everyone has basic levels of social protection. Member States should ensure that the right offer is available with a good balance between contributions and benefits, so that self-employed are able to subscribe to higher levels of social protection, if desired. The level of social protection should never be a threshold for entrepreneurship, which will become more important in a time where people change rapidly between jobs and types of activity.
However, a common mistake, also made by Cortebeeck and Serroyen, is thinking that ‘Social Europe’ automatically relates to social legislation at the European level, for example to tackle the rise of (solo) self-employment. We need more self-employment, not less. We need to safeguard principles of protection, but not by making our labour market more rigid. A changing labour market requires a degree of flexibility, and describing everything that is not a 40h/week, open-ended contract as ‘atypical’ is no longer appropriate. Moreover, policy initiatives at the EU level should look more at the ‘absorption capacity’ of companies to implement legislation. It should not harm the work organisation of small businesses, which is a matter of employers and workers working closely together. Overregulation needs to be avoided.
Unfortunately, several of the legislative files on the table in Europe follow the logic of more legislation, creating many additional burdens for employers. This is the case, for example, with the revised Written Statement directive (WSD), or the proposal for a Directive on Work-life Balance. The intentions may be right, but they miss the point on facilitating job creation, participation on the labour market, and avoiding excessive burdens.
With regard to the revision of the WSD, it would have been better if we had addressed it ourselves as social partners, to make this important piece of legislation future-proof in a changing labour market. The Directive handles the information in the relation between the employer and the employee and is therefore at the core of social dialogue. This is in fact why employers offered to negotiate, but trade unions refused and chose to rely on the Commission and Parliament for better outcomes. When Cortebeeck and Serroyen write that European employers refused any form of social dialogue, they better check their notes again.
In terms of ‘social Europe’, the most crucial is that Europe offers room to shape the welfare state at the national level in a credible way, and facilitates Member States in exploring policy options. In fact, the EU has the right mechanisms in place for that, with the European Semester as an effective tool to address social and economic imbalances. In contrast with the statement of Cortebeeck and Serroyen, ‘Social Europe’ was not put on hold in recent years, even if the crisis asked a lot from many people. The main deficit was with the economic and social governance, not with a lack of European rights. The Pillar of Social Rights and many social indicators being mainstreamed in the European Semesters’ messages to the Member States, has re-balanced the economic with the social dimension in an adequate way. Moreover, it places the responsibility for those policies where it primarily belongs: with national politicians.
‘Hearts and minds’
After a few decades which saw many uncertainties rising for businesses as well as individuals, it is important that our political leaders now develop concrete ideas to tackle the main challenges of this moment in order to provide a positive perspective. Our social cohesion is under threat if no one is able to reconcile the different groups in society. In times where everything is being fragmented, we need to repeat the importance of building bridges between different interests in society, and to have a permanent and constructive dialogue with social partners at the core.
The real challenge to ‘win the hearts and minds’ of people, and create confidence about the future, is therefore to develop new perspectives, dots on the horizon, real ideas to reunite the digital transformation with a level playing field to provide growth across the board. This goes beyond the question at which level such ideas are developed. The current political climate does not allow for bold statements about where Europe does or does not deliver in the social field. We don’t need the creation of more illusions, we need solutions that work for all.