# EUR-Lex - 52012SC0097 - EN

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# 52012SC0097

**COMMISSION STAFF WORKING DOCUMENT Open, dynamic and inclusive labour markets /* SWD/2012/0097 final */**

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COMMISSION STAFF WORKING DOCUMENT

Open, dynamic and inclusive labour markets

Accompanying the document

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS

Towards a job-rich recovery

TABLE OF CONTENTS

1........... Introduction.................................................................................................................... 1

2........... The flexicurity framework: the
EU common principles and the four components................ 2

3........... Main approaches to flexicurity......................................................................................... 3

4........... Implementing flexicurity................................................................................................... 4

5........... Delivery of flexicurity by
component during the crisis...................................................... 10

6........... Performance of flexicurity
during the crisis..................................................................... 16

7........... Concluding observations............................................................................................... 21

This paper is organised as follows: after an introduction, section 2 quickly
presents the different pillars of flexicurity providing both security and
flexibility, section 3 outlines five country groups which share commonalities
in their flexicurity approaches. Section 4 provides examples of recent labour
market measures showing how flexicurity is anchored in national policy making,
and how social partners are involved. To what extent flexicurity measures have
been continued in the period 2008 – 2010 is discussed in section 5, with
observations on labour market performance in section 6. Concluding comments in
the final section of this document support the chapeau communication of the
Employment Package.

Disclaimer: This document is a European Commission staff working
document for information purposes. It does not represent an official position
of the Commission on this issue, nor does it anticipate such a position.

1.           Introduction

Since the mid-2000s, flexicurity has been
developed and refined as a policy concept through common work between the
European Commission, the Member States, social partners and academic experts.[1] The Commission has defined
flexicurity as “an integrated policy strategy to enhance both flexibility
and security within the labour market”.[2]
The concept was developed as a comprehensive response to the challenges faced
by European labour markets and societies in a context of globalisation and
technological and demographic change

The flexicurity approach has provided a framework supporting the implementation
of the European Employment Strategy under both the Lisbon and the Europe 2020
Strategies. The flexicurity framework was conceived in a time of relatively
favourable economic conditions. The crisis and its negative employment and
social impacts have heightened existing concerns and spurred criticisms of the
flexicurity concept, especially from the side of the trade unions and in some
academic circles. Apprehension from trade unions stems from their feeling that
in times of crisis all balance has been lost as the term flexicurity has been
used when only labour market flexibility has been increased, while the crisis
has increased the need for employment and income security. Questions are also
raised whether such a policy approach is still viable in a context of fiscal
tightening: how is it possible to finance the security aspects of flexicurity?
How is it possible to cope with rising demand for income support and ALMP
measures? What is the role of activation measures (either train or work first)
in a period of low labour demand? What is the role of social dialogue in
implementing flexicurity?

It is therefore important to show the added
value of the concept in a tangible form, while adapting it to the changing
socio-economic context characterised inter alia by higher unemployment
and tighter budgetary constraints. Furthermore, the crisis has highlighted the
urgent need to pursue labour market reforms, without reducing the scope for
consensus and trust between social partners - a key principle for successful
flexicurity policies.

In 2010 the Commission's communication An Agenda
for new skills and jobs[3]
considered that the EU common principles of flexicurity remained valid but that
a comprehensive debate on strengthening the four components of flexicurity was
needed to consolidate the consensus towards a new momentum in the first half of
2012. In November 2011 a Stakeholder Conference on Flexicurity was organised by
the Commission bringing together representatives of Member States, social
partners and European institutions. Furthermore, several surveys and studies,
some of them still on-going, allow an informed assessment to be made of the
implementation of flexicurity and how it could further evolve to support job
creation and reduce poverty.

The purpose of this Staff Working Document
is to review the implementation of flexicurity and its integration in national
policies; identify concrete examples of how flexicurity policies and measures
have helped weather the crisis and in what ways for the concept of flexicurity
can be further useful in supporting the modernisation of European labour markets.

2.           The
flexicurity framework: the EU common principles and the four components

In 2007, the Commission issued a
Communication ‘Towards Common Principles of Flexicurity’, which aimed to raise
awareness in the Member States of the benefits of introducing flexicurity
arrangements for those in work and those out of work. It did so by outlining
four inter-related components of flexicurity, which comprise:

· 
Flexible and reliable contractual
arrangements. The idea is to help ‘outsiders’, who
are employed on short-term or irregular contracts or are unemployed (many of
whom are women, young people and migrants) to find work and to move into stable
contractual arrangements. Modern work organisation should promote work
satisfaction and at the same time make enterprises more competitive.
Flexicurity is also to help ‘insiders’, who are permanent employees with open-ended
contracts, prepare themselves for job changes ahead of time in the case of
redundancy due to economic change.

· 
Comprehensive lifelong learning (LLL) strategies.
Lifelong learning is about ensuring that EU
citizens have the opportunity to have a high quality initial education, that
they complete at least their secondary education, that they develop a broad
range of key skills and that they acquire new skills and upgrade existing
skills throughout their working lives. It is also about ensuring that
enterprises invest more in human capital and allow employees to develop their
skills, as well as the recognition of all types of learning; formal, informal or
non-formal.

· 
Effective active labour market policies
(ALMPs). Active labour market policies help
unemployed people back to work through job placement services and labour market
programmes such as training and job creation. By implementing ALMPs such as an
efficient job search support and good work incentives, jobseekers can be
encouraged to find new employment. Job search courses and job clubs have been
shown to be among the most effective measures to help the unemployed find a
job.

· 
Modern social security systems. It is important for EU governments to provide adequate unemployment
benefits to act as a safety net when people are changing jobs and to offer
healthcare benefits in case they fall ill as well as pensions for when they
retire. Childcare is another important area as it helps people to combine work
and private life and thus keep them in the labour market. Maternity and
parental leave should also facilitate transitions and reconciliation between
working and family life.

There are eight Common Principles
which provide a general framework and guidance for the implementation of
integrated flexicurity strategies in the Member States.

According to these principles, flexicurity
is a means to create more and better jobs, modernise labour markets and promote
good work through new forms of flexibility and security. It involves the
combination of the above mentioned four components. It has to be tailored to
the specific circumstances of each Member State and progress should be
monitored. It should promote open, responsive and inclusive labour markets in
which transitions pay. Both internal (within enterprises) as well as external
flexicurity are equaly important and should be promoted. Flexicurity should
support gender equality, notably by allowing reconciliation between work and
family (flexible working time arrangements, smooth transitions, etc.). It
requires broad-based dialogue among all stakeholders and social partners should
be involved in the design and implementation of flexicurity policies. Finally,
it requires a cost-effective allocation of resources compatible with sound and
financially sustainable public budgets.

Since 2007 the Common Principles including
the four components have been the framework underpinning the labour market
policies in the EU Member States, leading to a number of countries developing
integrated flexicurity approaches. Under the Europe 2020 strategy, the 2010
Employment Guidelines, agreed by the Member States and adopted by the Council,
urged Member States to integrate and apply the flexicurity principles in their
labour market policies and recommended that measures to enhance flexibility and
security should be both balanced and mutually reinforcing.[4] The 2011 Annual Growth Survey
(AGS) identified balancing security and flexibility as one of the priority
measures to mobilise labour markets and create job opportunities.[5] More recently, the 2012 AGS
reiterated that the implementation of balanced flexicurity policies can help
workers to move successfully between jobs and labour market situations.[6]

3.           Main
approaches to flexicurity

The third common principle acknowledges
that there is no one size fits-all approach to flexicurity, since they should
be tailored to the specific circumstances of each Member State. The 27 Member
States are characterised by very different modalities and combinations of
flexibility and security elements, reflecting the diversity of European
employment regimes. However, Member States may be classified into clusters
based on a number of commonalities. Taking account of the existing literature,
in 2006 the Commission identified, according to prevailing combinations of
policies and/or institutions, five different flexicurity approaches within the
European Union:[7]

· 
The Anglo-Saxon system, covering the UK and Ireland, features a high degree
of flexibility, relatively low security and low taxation. These countries have
looser employment protection legislation, making it easier for enterprises to
restructure in the face of changing economic circumstances. Countries in this
grouping spend intermediate-to-low amounts on labour market policies aimed at
helping the unemployed back to work. Cash transfers are primarily oriented to
benefits linked to regular employment. The model is characterised by weak
unions, moderate to high rates of unemployment and comparatively high
disparities in wages.

· 
The Continental system, covering Austria, Germany, France, Luxembourg and Belgium,
is characterised by intermediate-to-low flexibility, intermediate-to-high
security and intermediate-to-high taxation. These countries rely extensively on
insurance-based benefits and have stricter employment protection legislation.
Although union membership is in decline in most countries, the unions remain
strong and are regularly included in processes of decision-making and
implementation. These countries tend to have higher levels of long-term
unemployment than the Anglo-Saxon countries but, thanks to higher levels of
redistribution via taxes and transfers, they have lower numbers of people in or
at risk of poverty.

· 
The Nordic system,
comprising Denmark, Netherlands, Sweden and Finland,
is characterised by high security, intermediate-to-high flexibility and
intermediate-to-high taxation. These countries have Europe’s highest levels of
social protection expenditure and universal welfare provision. The strictness
of employment protection legislation tends to be low, but accompanied by extensive
active labour market policies and generous social assistance. They see
comparatively high levels of employment, low long-term unemployment rates, high
job turnover and a much higher sense of security among the population than in
other European countries. Social partners tend to play an important role in
decision-making.

· 
The Mediterranean system, covering Spain, Italy, Portugal, Greece,
Cyprus and Malta, features low flexibility, relatively low security, and no
clear pattern of taxation. These countries generally have strict employment
protection legislation for workers on open-ended contracts, while a growing
number of people with part-time and/or fixed-term contracts (especially women,
ethnic minorities and the young) enjoy very little if any employment security
at all. The social protection expenditure of these countries tends to be
concentrated on old-age pensions, with low coverage of unemployment benefits.
Countries in this system reveal high levels of unemployment and a wider
incidence of poverty and social exclusion.

· 
The Eastern European system, covering the Baltic States, Poland, Hungary, Czech Republic,
Slovakia, Slovenia, Romania and Bulgaria are characterised by low
levels of employment security, intermediate-to-high flexibility and
intermediate-to-high taxation. With lower levels of employment protection
legislation than the Mediterranean system, the provision of social assistance
in these countries is also weaker. The countries in this system tend to have
high long-term unemployment rates, with unemployment particularly high among young
and older workers.

These clusters – relying on a modelisation
- present a simplification of the variety of the EU labour markets and
empirical evidence supports them less than when they were identified.[8] They can nevertheless be
helpful in analysing further the implementation of flexicurity during the
recent years and what concrete measures have been developed to help weather the
crisis.

4.           Implementing
flexicurity

One of the criticisms addressed to
flexicurity has been that it is a complex concept, too abstract and that is
subject to a certain ambiguity. It is therefore important to identify tangible
ways in which flexicurity has taken form.

Several studies[9], some of them still on-going,
have identified a large number of concrete labour market policy measures considered
flexicurity practices. The research of EUROFOUND identifies more than 230
public and social partner based instruments, a high share of which were either
initiated or amended in the course of the crisis, pointing to the validity of
flexicurity in times of economic hardship. Some initiatives were innovative and
creative. However, more information is still needed regarding the effectiveness
of the measures.

Each of those policy measures or
instruments can provide various forms of security and various forms of
flexibility. Striking the right balance between flexibility and security
dimensions determines the perception that stakeholders have of the
implementation of flexicurity. Measures combining external flexibility and
employment security seem to be most prevalent. In general, measures combining
these flexicurity dimensions include those that aim at replacing traditional
job protection by measures enhancing the employability of outsiders of the
labour market while easing hiring and lay-off procedures and costs for the
employers, backed up by active labour market policies. This back-up tends to be
government programmes to help unemployed find a fixed term or permanent job by
(temporarily) offering subsidies to employers or reducing their social security
contributions, while ensuring compliance with state aid rules.

In a second big group of measures, external
flexibility is combined with job security. These measures often contain
elements to facilitate hiring and laying off, which is combined with incentives
for employees to maintain their existing jobs. Most of these measures are
related to new regulations on types of employment contracts in terms of their
duration. Prominent examples are legal regulations obliging companies to
provide workers with an open ended contract after repeated use of fixed-term
contracts or after a certain period of time has elapsed (see box for examples
combining various forms of security and flexibility).

Various forms of
flexibility and security

External flexibility and job security

Measures combining external flexibility and job
security are often aimed at preventing abuse arising from the use of successive
fixed-term contracts, for example by requiring objective reasons justifying the
renewal of such contracts, maximum duration or maximum number of repeats (see
also the Council directive on fixed term work).[10] In the Netherlands this
has been made operational by labour laws dictating a maximum of either three
fixed-term contracts or three years of use. After this has elapsed the
fixed-term labour contract will by law be considered as open-ended with the
according degree of employment protection.[11]

Labour pool companies make possible the combination of external flexibility
with specific job security in several Member States including Germany, France,
Belgium, The Netherlands, Sweden or Finland. The commonality of these measures
is that a pool organisation composed of several employers usually from the same
activity branch and/or located in the same area is voluntarily formed. This
pool hires workers, trains them and sends them to the companies during their period
of activity peaks. Throughout this cycle, workers keep on being employed and
paid by the pool company as such, guaranteeing them a permanent income, even in
times of inactivity. In most of the examples, such initiatives are partly or
fully subsidised by the national or regional administration. In Belgium,
the employees in the pool are entitled to indefinite contracts offered by the
pool organisation. In some cases, however, the pool is used only as a platform
for exchange of information and good practices and for short-term employee
mobility.

External flexibility and employment security

Creating a secure framework for labour
market transitions can help workers by providing employment security while
delivering flexibility to firms. To this end, in 2011 France introduced
regulation called career security contract (CSP) which offers workers, who
lose their jobs in economic redundancies, 80% of previous wages. This
protection holds for a period of up to maximum one year. Participating in this
CSP, which is voluntary to the employee, means laid off workers will need to
enlist in an intensified 'return to work' programme. Workers will have to
accept the first job offer made to them. Actual take-up rates of the new CSP so
far have been low as workers feared that needing to accept any first job offer
could mean moving across the country.

At a regional level, the Austrian Work Placement
Foundations (Implacement Arbeitsstiftung) have proven to be good examples
to remedy structural problems in the labour market. There are currently 45
placement foundations in Austria. These foundations target fast growing sectors
where there is relatively little labour supply and aim to match the
enterprises’ personnel needs with unemployed people, trained and qualified in
accordance with their specific needs. They offer training and a comprehensive
service package including career guidance, job search, and work experience
programmes that can last up to three years (four in case of jobseekers that are
above 50 years of age). The participating companies report their demand to the
local public employment office which looks for suitable candidates from the
pool of registered unemployed candidates. During the training, the participants
receive financial support amounting to the unemployment benefit from the public
employment service. As a final step, the trainees are employed in the company.

Overall, work placement foundations provide firms with
the skilled labour that they are seeking, specifically trained for their needs.
During the training period, the company does not have any wage or related costs
and saves costs for training and HR administration. In return, employers give
job-seekers the opportunity to gain qualifications that hold out the promise of
employment at the end of the training process. Work foundations promote greater
occupational, remunerative and regional mobility. This is also a good example
where a support measure can be implemented without tremendous cost burden for
one single stakeholder as several stakeholders share the financial burden of
the measure.

In Spain the labour market reform approved in
September 2010, inspired by the reforms in the severance pay reforms in
Austria, has foreseen the creation of a worker's capital fund that will
enter into force in 2012. Instead of paying the total amount of severance pay
at dismissal, employers would pay regularly an amount equal to a certain number
of day's wages per year into this fund. The employee may benefit from this fund
in the event of dismissal, geographical mobility, for training purposes, or in
the case of retirement. The money is kept in the worker's account in the case
that the worker changes employer voluntarily. As a transitional arrangement,
until the creation of the Capital Fund, part of the severance payment of
dismissal of permanent contracts (eight days per year of service) will be
funded through recourse to the government Fondo de Garantía Salarial, FOGASA,
created in 1985.

External flexibility and income security

In Estonia, the first policy document to tie
together the four major elements of flexicurity was the explanatory note to the
new Employment Contracts Act (in 2008). As the unemployment insurance
came into force in 2002 and labour market services were reformed in 2006, the
2008 act dealt mostly with individual labour relations. The original act i.e.
the one accepted by social partners, addressed also the security of workers
during unemployment with a more generous unemployment insurance benefits system
but these changes were cancelled as a crisis measure. In addition, the Act also
increased the opportunities for lifelong learning.

Internal flexibility and job (and income) security

In Germany, Working time accounts were widely exploited by German companies
between summer 2008 and autumn 2009 to combat the adverse impact of the
economic crisis and may have
been an alternative to the use of short-time work in the adjustment process
during the 2008-2009 recession. If employees work fewer hours than their
contractual obligation, working time accounts ensure that this debt will be
balanced later; in this case, firms give a credit to their employees (full
salary), and they receive a compensation once demand improves (in the form of
labour). It is estimated that about one third of the companies in Germany with
more than 20 employees have used working time accounts to maintain employment
levels during the crisis. In 2009, the reduction in working hours that was due
to working-time accounts was about half of the size of the reduction that was
due to short-time work. About half of the firms that used short-time work also
used working time accounts, whereas it is estimated that one in ten firms that
used working time accounts also made use of short-time work. The use of working
time accounts provides for the adaptation of labour to production needs. Its
use is previous to the possibility of using short-time work. In case of
working-time accounts, the State doesn't pay any compensation. As well as the introduction of short-time
working, the use of flexible working time accounts is said to be one reason why
adverse effects on employment were avoided at both the company and the
macroeconomic level.

In Italy the Solidary Contract (Contratto di Solidarietà),
modified in 2009, made use of company-level arrangements based on the principle
of solidarity among current employees who reduce, all at the same extent, their working hours in order
to avoid dismissals or to allow the recruitment of new employees. The
company-level agreement grants a reduction of working hours (maximum 60%),
corresponding to an equal reduction in wage. This income loss is compensated by
public employment services. In 2009, the government increased the annual amount
paid into the fund for job-security agreements to € 40 million. Consequently,
for the period of 2009-2011, the wage supplement has been raised to 80% of the
wage reduction. The job security agreements can last for an initial period of
maximum 24 months, which can be extended for 24 further months (36 months for
Southern Italy). At the end of the maximum period, a new job-security agreement
for the same units can be agreed following an at least 12 months production
resume period. The agreements create a win-win-win situation for employees,
employers and unemployed. As the reduction in pay of employees is not reflected
in their social security contributions (this difference is also financed by the
national government), incumbent employees enjoy reduced working times with
minimal income loss while new jobs are created for the unemployed. Employers
deciding to use job security agreements benefit from a reduction of the amount
of social security contributions to be paid for the workers using the scheme.
One drawback of the scheme is reported to be the complexity of related
procedures.

Social partners have found ways in collective
bargaining to support both flexibility and security at the same time. In Germany,
sectoral employers have the power to oppose increases in minimum wages if they
can argue increased levels would be harming employment in their sectors; in
specific cases they can opt out of the bargaining agreement which has been
reached collectively and which still holds in other dimensions. Operating this
way, firms or sectors have the flexibility to better follow labour productivity
developments in their wages, avoiding employment threatening 'gaps' between
wages and productivity. The way it is organised, employment in these firms is
protected.

Functional flexibility and employment security

Skillnets in Ireland funds and facilitates training through 60 networks of
private sector companies, in a range of sectors and regions. Each network
delivers training that is relevant to both member company and specific industry
needs (see www.skillnets.ie). This is an
example where lifelong learning and human capital accumulation is used to
ensure employment security. Skillnets
is a state funded, enterprise-led support body dedicated to the promotion and
facilitation of training and upskilling as key elements in sustaining Ireland's
competitiveness. The organization supports and funds networks of enterprises to
engage in training under the Training Networks Program (TNP). These networks,
now referred to as 'Skillnets', are led and managed by the enterprises
themselves to design, manage and deliver specific training programs across a
broad range of industry and service sectors nationwide. Since 1999, Skillnets
has facilitated over 60,000 Irish enterprises, in over 350 networks to improve
the range, scope and quality of training and allowed over 275,000 employees to
upskill and meet their work related training needs.

94% of companies funded by Skillnets are classified as
SMEs. In a 2010 survey with member companies, more than four out of five
companies (82%) agreed that Skillnets training helped them to fill skill gaps
whilst 68% agreed that it improved productivity. A high proportion of
companies reported that Skillnets training helped to achieve market
developments such as enhancements to products and services (70%). 84% agreed
that Skillnets training represents good value for money and 89% agreed that
they would recommend to other companies to join a Skillnet network.

Though most of the measures have been taken
by governments, social partners have also themselves taken initiatives or
have been involved in the government actions. In fact, one of the important aspects highlighted in the initial Commission
Communication on flexicurity, and re-iterated subsequently, is the importance
of the involvement of social partner organisations in giving shape to flexicurity
policies and their implementation.

In the first phase of the crisis, the
contribution of the social partners to implement internal flexicurity was
considerable. The short time work arrangements and collective bargaining
opening clauses, are some direct examples (see also section 5). These efforts
have cushioned the shock of the recession, controlled wage costs thus protected
the competitiveness of firms and as a consequence avoided a steeper decline in
employment. The involvement of all relevant
stakeholders in the design and implementation of flexicurity policies can be
seen as an important precondition for reforms leading to a win-win situation
delivering both security and flexibility. However, those involved should not
allow the current short term focus, induced by the economic crisis, to eclipse
the long term view needed to observe and steer the process of structural
reforms in the flexicurity approach.

The findings of the project implemented by
the European cross-industry social partners between 2010/2011 on the Implementation
of the Flexicurity Concept in the EU[12]
concludes that the level of social partners' involvement has depended very much
on existing traditions of social dialogue and social partner involvement and
cultures of labour relations. As a result, the integration of social partners
in the decision making process and shaping reforms ranges from strong to weak.

Flexicurity
measures initiated by social partners

In Finland, in response to the recent economic
crisis, Tripartite Flexicurity Committees (Kolmikantainen
joustoturva-työryhmä) have been formed at a sectoral or company level, which
can be considered as a pioneering measure that is explicitly labelled as
flexicurity. These working groups try to identify the needs for amendments in
the existing labour market support system and potential new tools necessary to
cope with the economic crisis and changing working environment. In doing so, a
relatively strong emphasis is put on the need to address these challenges in
the flexicurity spirit (ETUC, BusinessEurope, UEAPME and CEEP, 2011).

Recently, social partners in Spain reached an
Agreement for employment and collective bargaining for the years 2012-2014 that
has been able to improve the internal flexibility in terms of working-time,
functional flexibility and to link wages to the situation and results of firms,
and in particular productivity. This much improves long term employment
security for workers because viability of firms is ensured by preventing
wage-productivity gaps which could eventually lead to bankruptcies and
termination of business activities.

The Employers’ Associations for the Bavarian
Metalworking and Electrical Industries and IG Metal in Germany initiated
an action programme called Employment Bridge Bavaria (Beschäftigungsbrücke
Bayern) to ensure employability and vocational training for young
skilled workers and engineers. Young skilled workers and engineers are hired
therefore by a special company which posts these people to other companies.
Hereby, the targeted young people are encouraged to opt for a technical
training. The programme, expected to last until 2012, is funded by the regional
government of Bavaria and involved social partners together (Source: ETUC,
Business Europe, UEAPME and CEEP, 2011).

Central to flexicurity policies is their
integrated nature; all parties relevant to labour market functioning do, or at
least should, take part in agreeing and implementing policies, but also many
thematic policy areas are included, ranging from labour law to unemployment
benefits and training. This integrated nature means that views from all
stakeholders on all topics should be included in policy reforms. This implies
that economy-wide agreements can take a long time to materialize but if and
when achieved, substantial economy-wide gains can be generated. Certainly the
added pressure of the current economic crisis has diverted focus away from
structured approaches to more ad-hoc measures vis-à-vis labour market outcomes.
The text box below reports on a number of Member States showing a comprehensive
approach to flexicurity.

In order to help Member States, at EU level, a common language has been developed, in terms of flexicurity
pillars (ALMP, lifelong learning, contractual arrangements and modern social
security), common goals have been articulated concerning improving labour
market functioning and fighting segmentation and common instruments have been
identified in terms of various types of securities and flexibilities.

Comprehensive
flexicurity strategies

Denmark demonstrated in the 1990s how an integrated policy approach can lead
to favorable labour market outcomes. In the fifteen years leading up to 2008
Denmark reduced its unemployment rate by almost three quarters – from 9 to 2.5%
– adding considerably to employment security. Of course, part of this was due
to positive macro economic trends which helped job creation and reduced
unemployment but active labour market policies (ALMPs) and the benefits system
saw clear reforms. Furthermore, wage bargaining and income taxation were
reformed in support of job creation. Benefits were made more difficult to
access through stricter eligibility criteria while benefits themselves were
shorted in time and job-seeking requirements were installed taking away passive
elements which had been present in the system. ALMPs changed their focus to
more human capital investments.

In Estonia,
different opinions emerged linked to the coherence between the four components
of flexicurity: government representatives argued that all components are taken
into account in the policy making process and that the connections between them
are thoroughly analysed whereas the social partner perspective was that the
four components of flexicurity have been dealt with rather separately and that
this is a serious shortcoming. In 2008, the explanatory note to the new
Employment Contracts act tied together the four major flexicurity elements.

In Poland, on-going reforms refer to all four
components of flexicurity. Reforms were taken first in the areas of lifelong
learning and effective active labour market policies, subsequently complemented
with measures relating to flexible and reliable contractual arrangements and
modern social security systems. The 2009 report on the implementation of the
NRP discusses significant issues related to the implementation of an integrated
model of flexicurity.

In Austria, flexicurity is seen as an
overarching strategy. This is exemplified by the fact that some measures
alternately appear as related to different flexicurity components in the 2011 NRP
; for example the training guarantees can be listed as a lifelong learning or
active labour market policy measure and the social security coverage for
self-employed and freelancers is mentioned under contractual arrangements and
social security measures. It is in the areas of lifelong learning and social
security modernisation that there has been the greatest renewed policy emphasis
as a result of the EU flexicurity strategy. Although efforts and expenditure
may have focused (particularly in the crisis years) on ALMP measures, there is
arguably greater policy stability in this area, whereas responses to the policy
challenges in the field of LLL and social security took longer to develop, and
are in some cases (e.g. the lifelong learning strategy) not yet finalised and
in need of further work. Flexicurity considerations feature highly in
collective bargaining and because of the strong interlinkages of social
partners in policy making the focus here has been rather similar.

Since mid-2010, also Spain has performed a
considerable reform effort, aimed at reducing labour market segmentation and
increasing flexibility at company level, improving the functioning of active
labour market policies, enhancing the adjustment of
wages to local conditions. Major steps include the reform of employment
protection legislation passed in June 2010, the overhaul of active labour
market policies in February 2011, the reform of collective bargaining system
with a view to de-centralise wage setting in June 2011, and the pension reform
passed in July 2011 to extend the statutory retirement age and increase
the contribution period. Most recently, on 10 February 2012, the Spanish
government presented to Parliament new labour market measures which include
changes to employment protection legislation, the collective bargaining system,
internal flexibility, job incentives and labour market intermediation services.
The Social partners have also reached a wage moderation agreement until 2014
that includes agreed ways to implement internal flexibility.

In the context of its adjustment programme, Portugal
is passing a major reform package, agreed with all the employers' organisations
and only one of the trade unions, touching upon the employment protection
legislation, working time arrangements and the wage-setting system. A draft law will also thoroughly
revise the unemployment insurance system, while action on streamlining and
strengthening active labour market policies and education policies is
taking place with a view to speeding up transition to employment, and
facilitateing job matching.

5.           Delivery
of flexicurity by component during the crisis

Flexible and
reliable contractual arrangements

One of the more cited outcomes of the
crisis in policy terms has been the key role played by internal flexibility
instruments to help weather the crisis. A good number of them have tried to
achieve increased income security and job security.

The short time work arrangements (STWAs)
are the clearest and best documented instrument used to support labour demand
and protecting jobs. In one way or another 20
Member States made use of these arrangements where government subsidies were
given to either firm or worker to compensate for loss of income resulting from
a temporary reduction in working time in response to crisis-induced reductions
in output, all of this intended to maintain existing job relations and skills.
Some of these arrangements were phased out in 2011 because of the need for more
austerity in public finances. Specifically considering crisis induced measures,
it is found that many of these include job security.

Evaluation studies from OECD[13]
and those initiated by the European Commission[14]
show that as a result many jobs were saved. Estimates range around a million
jobs saved. Possible downsides to using these STWAs are the fiscal costs
(although these have to be considered against unemployment and social benefits
saved) and the presumption that the reductions in firm output are temporary
after which they will resume their pre-crisis levels. In this sense using STWAs
could obstruct necessary changes to the economy's production structure that may
prove necessary in the longer term. Properly targeting this measure, thereby
avoiding jobs get subsidised which would have survived anyway even without
subsidies (avoiding deadweight losses), is another challenge in designing these
arrangements. Some experts have also pointed to the fact that STWA have
coexisted with external flexibility for non-permanent forms of work and that it
has made visible the dualism of the labour market.

These problems can be minimised by including a number of criteria for a public
contribution to STWA: firms being required to prove the economic necessity of
using STWAs; firm-level social partners having to agree to the use of these
arrangements; provisions that the cost of absorbing the productivity loss
should be shared roughly equally by workers, firms and government; temporary
character of fiscal support for the use of STWAs; subsidies should be paid back
by the firm if after use workers still get dismissed; and finally, the time not
worked should be used for training activities.

Successful experiences with the use of working-time accounts, e.g. in
Germany, show that there is a possibility to use firm-based instruments that
help foster flexibility in the use of labour, helping firms to be more
competitive, and at the same time being an instrument of resilience and job
security in terms of temporal dampening of demand. These experiences are now
being also introduced in other Member States (e.g. Portugal).

However, the crisis has also increased concerns about growing labour market
segmentation resulting from the rise in the use of (involuntary) fixed term
employment and successive fixed-term contracts in some Member States, which
– rather than acting as a stepping stone – can trap workers for many years in
precarious employment. This leads not only to low job security, reduced access
to training and reduced opportunities for career advancement and wage progression,
but also has an impact on wider opportunities, for example access to a
mortgage, saving for a pension or making long-term decisions about family
formation.

One of the major reasons for segmentation is the inadequate dovetailing of
regulations of the various contractual forms: disparities in employment
protection rights for permanent and fixed term contracts have been identified
as a, if not the, key source of segmentation. During the crisis, a number of
Member States started reviewing their labour laws to reduce protection for
permanent contracts with a view to making hiring more attractive. The latter
has been particularly the case in some countries of the Mediterranean and
Eastern European groups.

Reducing labour
market segmentation - Single open ended contract

The economic crisis has put into spotlight the issue
of labour market segmentation. Job losses were concentrated to a large extent
on workers with fixed term contracts. As one round of fixed term contracts was
finished, it was followed for many workers by unemployment rather than another
fixed term contract.

In 2011 the Commission proposed to address the issue
through the introduction at Member State level of a “single open ended
contract” to encourage employers to hire workers on a more permanent basis. No
specific contract examples have been proposed but only a general direction.
Ideally, a single open ended contract would provide flexibility to employers
while preventing segmentation. All workers would be protected by such a
contract against lay-off at will, by forms of legal and/or monetary protection
– clarity about this protection would be available from day one of the
contract. Furthermore, these protection rights would build up continuously with
job tenure until a maximum, and there would be no ex-ante time limits specified
in the contract.

The issue has been debated at length in some Member
States though as such it has not been adopted in any. However the debate has
succeeded in focusing attention on the problem and has triggered at debate on
the ways to improve the design of contractual arrangements to address the
segmentation problem.

Active labour
market policies

Active labour market policies are a key
component of flexicurity in facilitating transitions from an unemployment
situation towards a job. The crisis has challenged the use of ALMPs because of
the severe increase in the numbers unemployed and the decrease in labour demand
may cast doubts on the effectiveness of measures. Furthermore, the limits in
the availability of funds due to fiscal consolidation have raised an additional
challenge just when the demand for such funds has risen with increased numbers
of unemployed.

Overall, spending on ALMPs as a proportion of GDP has increased across the EU
as a result of greater use of existing schemes as well as newly introduced
active labour market policies. An analysis of this indicator for the five
flexicurity clusters shows the Nordic and Continental clusters devoted the
highest proportion of GDP to ALMP, with an average 0.8% and 0.7% of GDP spent
on these measures respectively. These are the two flexicurity clusters with
spending above the EU average (0.6%). In 2009 the other three flexicurity
clusters (the Eastern European, Southern, and Anglo Saxon clusters) each spent substantially
less with an average of 0.3% of GDP on ALMP measures. A major source for ALMP
funding during the crisis has been the European Social Fund, which for
some Member States provided a significant contribution to limited national
budget allocations, in particular for training measures, including in the
context of short-time work arrangements.

Before the crisis, between 2005 and 2008,
expenditure on ALMP remained rather stable for the EU, as well as among the
Continental and Eastern European clusters. The Nordic cluster experienced a
decline in expenditure between 2006 and 2008 (consistent with falling rates of
unemployment). Such a decline was also evidenced in the Anglo-Saxon and
Southern clusters between 2005 and 2006. All clusters experienced a rise in
ALMP expenditure between 2008 and 2009 as a result of the economic crisis and
subsequent rises in unemployment. The lowest rates of increase during this
period can be found in Anglo-Saxon and Southern clusters which traditionally
place less emphasis on ALMP spending. Figure 1 illustrates these findings.

Figure 1. Spending on active labour market
policies (as % of GDP)

Source:
Eurostat

Within ALMPs, the trend has been towards a
stronger use of hiring subsidies. There has also been a strengthening of the
conditionality of unemployment benefits to the participation in ALMPs. In some
cases, even some income-support benefits provided after the exhaustion of
unemployment benefits now require some kind of participation in activation
measures.

Modern social security systems

The
modernisation of social security systems is of particular relevance to the
flexicurity agenda. One obvious link is that improvements or expansions in
social insurance systems (for example to extend unemployment benefit durations)
can serve to balance potential liberalisation in contractual arrangements by
providing greater income security during transitions.

Social
insurance systems can be adapted to the economic cycle to build up greater
reserves to provide additional income support in times of higher unemployment
(and therefore more difficult transitions). Beyond that, passive measures
including income support have an important role to play as automatic
stabilisers during recession, but if badly designed, can also affect incentives
to work and go against the notion of “making work pay” (especially if
coinciding with high tax wedge on low-paid labour).

Between 2005 and 2009 the Continental and
Nordic clusters were responsible for the highest proportions of GDP spent on
such measures (each spending 1.5% of GDP by 2009, compared to an EU average of
1.4% - see figure 2). The Anglo-Saxon cluster also reached this figure by 2009,
following a rapid increase from a low level since 2008 (largely as a result of
the crisis and rising unemployment). In common with most other flexicurity
clusters, the Continental and Nordic clusters saw a consistent reduction in the
proportion of GDP spent in these areas between 2005 and 2008, followed by a
significant increase in 2009. This is consistent with declining rates of unemployment
(and indeed declining early retirement) during these earlier years and
increases in unemployment following the crisis, necessitating higher income
maintenance payments. Figure 2 summarises the figures which reflect
developments in numbers of income support users as well as crisis induced
support schemes.

Figure 2. Expenditure on income support and
early retirement (as % GDP)

Source:
Eurostat

Increasing conditionality of unemployment
and other benefits is intended to make the unemployed and inactive groups more
pro-active in their efforts to seek work or retrain, with sanctions applied in
case of non-compliance. However, whether such effects are achieved depends on
there being adequate provision of effective active labour market measures and
training opportunities to support those who cannot find work and, ultimately, on
adequate demand in the labour market to give people a chance of finding work
after participating in ALMP measures. However, ALMP budgets have mostly not grown
to reflect the increase in the number of unemployed. Moreover, conditionality
also risks that the most vulnerable groups, who need the most support, are
de-motivated and put off trying to find work and fall back to inactivity. There
needs to be flexibility in the approach, individualised support for those that
need it, and adequate fall-back systems to avoid long-term exclusion.

Although some groups do very well out of
atypical employment arrangements (e.g. successful entrepreneurs,
high-skilled freelance workers, etc.), many people who are
self-employed, in part-time or fixed term contracts continue to be
inadequately covered by social protection as well as often being rewarded
unfavourably (levels of pay, holiday rights, etc.) compared to people in
full-time permanent contracts doing the same or similar jobs.

The Hartz reforms undertaken during the 2000s in
Germany were an example of strengthening benefit conditionality. At the core of
the Hartz reforms was the introduction of a so-called 'mutual
responsibilities approach in social security'. This meant the social security system would be aimed
more at stimulating a return to work (more employment security) while income
security continued to be available. In this approach, on the one hand PES organisations provide
unemployment benefits when needed combined with increased frequencies of
face-to-face contact, strengthened follow-up and generally becoming more
accountable for their results, while on the other hand, jobseekers receiving benefits need to show clear job-search efforts, which are monitored, and sanctions may be used for
non-compliance. Furthermore, benefit durations were made time-limited and
conditionality was introduced linking training and job search effort more
directly to receiving benefits. Evaluations show that jobseekers found jobs
quicker and PES offices delivered more targeted and efficient services at the
same or lower costs.

Lifelong
learning

In addition to a good macro economic
situation, employment security is to a large extent generated by ensuring continued
human capital accumulation throughout workers' careers. Relying only on initial
education undergone before the beginning of one's working life is insufficient
in modern European economies with constantly changing technological production
processes. Whether education and training activities are of a nature specific
to the firm or sector influences firm incentives to make the required
investments. Some of the short time work arrangements have used training
participation as a criterion. Typically, this sort of training activities has
been firm-specific.

The economic crisis seems to not have had a
major impact on education and training participation rates among employed
persons (see figure 3). During the 2008-2010 period, worker participation in
training or education per flexicurity country group have remained more or less
constant (Anglo-Saxon, Mediterranean and Central European) or continued to grow
(Nordic). In the Continental group an increase in participation has been
registered in 2009, most likely related to the participation in short time work
arrangements which contained training requirements. Again, the ESF proved to be
an important funding instrument in the Member States for such activities.

Considering levels, clearly workers in the
Nordic, and to a somewhat lesser degree the Anglo-Saxon group, obtain a
considerable portion of their employment security from high levels of human
capital accumulation through education and training participation. For the
other country groups, employment security via education and training seems to
play a lesser role.

Figure 3. Participation in education and
training among employed persons

Source:
Eurostat

6.           Performance
of flexicurity during the crisis

Flexicurity was intended to help create
more and better jobs. It is therefore important to see how the various
flexicurity regimes have weathered the crisis and how flexicurity policies have
helped in terms of better labour market outcomes, such as employment,
unemployment, segmentation, income protection and polarisation. This section
discusses these themes in turn.

From an aggregated perspective the crisis
has had a varied impact on Member States' labour markets. The various country
groups replicate also this disparity in the way the crisis has manifested
itself in terms of employment, unemployment and segmentation.

If we examine unemployment, between
April 2008 and December 2011, the EU-level unemployment rate increased by 4 pp
to a historic high of 9.9%. Considering the big drop in GDP and general
economic activity, this rise in unemployment is moderate compared to other
parts of the developed world; the US for example witnessed a stronger initial
increase in unemployment even though GDP reductions were similar to those in
the EU.

Figure 4. Unemployment impact of crisis
various over countries

Within the EU, looking at the flexicurity
country groups, some patterns emerge in the labour market performance over the
crisis period. The countries in the Nordic and Continental countries groups
have seen smaller unemployment increases, while Central/Eastern Europe
witnessed EU-average levels of unemployment growth during the crisis and the Mediterranean
countries experienced large (PT) to very large unemployment increases (EL, ES),
see Figure 4. There are some exceptions to the above pattern with DK and the
Baltic states with unemployment growth above their respective country group average,
and IT below.

Another important aspect is how
unemployment is turning into long-term unemployment. Previous to the crisis
there was a general trend towards the reduction of long-term unemployment
rates. This trend has been generally reversed, but it can be noted that the
increase has been particularly steep in the case of the Anglo-Saxon cluster and
that Nordic and Continental countries have seen a slower increase in the
long-term unemployment rate than the other groups of countries. This would
appear to show that they are still more successful in supporting transitions
back to the labour market.

Figure 5. Long-term unemployment rates (2001-2010)

Source:
Eurostat

The crisis has triggered a reduction in the
EU employment rate from 2007-2010 of 2.9 pp. After the crisis period
2008–2010 the Nordic and Continental groups show the highest employment rates.
The higher unemployment rates in DK pushed Nordic employment rates down but
they are still at the highest level compared to other groups in the EU. The
Continental group is the only group which managed to increase its employment
rates over this period.

Figure 6. Employment rates for flexicurity
clusters (age group 15-64 years old)

Source:
Eurostat

Analysing labour market segmentation
is difficult as it can not be observed directly. The numbers of workers in
fixed term contracts in some cases can provide a useful but often only partial
insight into the issue, since a fixed term contract is not necessarily an
unfavourable contract for every worker. He or she may switch easily to a
permanent contract after a fixed term contract, using it as a stepping stone,
or it may well match his or her preferences. Still, labour market segmentation
can be caused by repetitive use or over-use of fixed term contracts, so that it
causes scarring effects, repeated unemployment spells between contract periods
and a generally unbalanced development of work and private life. Using involuntary
fixed term as an indicator work does provide a better insight regarding
segmentation and over-use of fixed term contracts as people are increasingly
likely to want to work in a permanent job, especially after they have done a series
of fixed-term contracts leaving them to experience the downside of repeated
fixed-term contract use.

Southern and Eastern European clusters are
characterised by high levels of involuntary fixed term workers (between 70-80%,
see figure 7), suggesting segmented labour markets. Workers are trying but not
finding access to permanent employment. Nordic and Continental countries
have lower levels of workers with involuntary fixed term contracts and these
two groups showed an improvement since 2009.

Figure 7. Proportion of those in fixed term
employment that ‘could not find permanent job’

Source:
Eurostat

When we look at income protection,
mainly delivered through unemployment benefits, we see that the crisis has put
social security schemes under stress, and has revealed strong variation across
the EU in their capacity to provide adequate income support (i.e. acting as
automatic stabilizers) and to cover the new unemployed.

Table 1 below illustrates for selected
countries the extent to which gross disposable incomes of households (GDHI) have
been sustained in the first and second phases of the crisis. It shows that it
is mainly in the Continental and the Nordic countries, and the Czech Republic
that incomes were well sustained during both periods, despite important initial
economic shocks – as indicated by severe drops in GDP. Elsewhere the picture is
mixed. In some countries (UK, Spain, Portugal), automatic stabilizers played
their smoothing role in the first phase running 2007-2009, but this effect was
not continued in the period 2009-2011.

Table 1. Economic shocks and effects on gross disposable
household incomes, selected countries

|| || 2007-9 || 2009-11

|| || GDP || GDHI || GDP || GDHI

Anglo-Saxon || United Kingdom || -5,4 || 1,9 || 2,4 || -1,1

Continental || Austria || -2,5 || -0,5 || 5,3 || -0,8

Germany || -4,1 || 0,4 || 6,7 || 1,6

France || -2,8 || 1,7 || 3,1 || 1,3

Belgium || -1,9 || 5,2 || 4,5 || 0,1

Nordic || Denmark || -6,3 || -0,8 || 3,0 || 5,9

Netherlands || -1,8 || -0,6 || 3,5 || -1,0

Finland || -7,3 || 3,9 || 6,8 || 1,1

Sweden || -5,8 || 5,1 || 9,8 || 5,1

Mediterranean || Spain || -2,9 || 5,1 || 0,7 || -6,2

Greece || -3,4 || -2,7 || -8,8 || -12,4

Italy || -6,1 || -2,5 || 2,1 || -1,0

Portugal || -2,5 || 4,9 || -0,5 || -3,5

Eastern and Central European || Estonia || -17,4 || -6,2 || 10,4 || -1,9

Latvia || -20,4 || -15,5 || 4,1 || -3,3

Hungary || -6,0 || -5,6 || 2,7 || :

Slovenia || -4,7 || 2,2 || 2,4 || -0,3

Czech Republic || -1,7 || 3,5 || 4,6 || 0,9

Poland || 6,8 || 8,1 || 8,1 || 5,8

Figures represent
percentage change in given periods. Source: National Accounts

Furthermore, the crisis revealed strong
variations in the capacity of unemployment benefit schemes to absorb the shock
and to allow for adjustments in terms of benefit duration and conditionality.
In some countries, tight conditionality combined with short durations had the
effect of pushing people from unemployment benefits towards social assistance
schemes as employment opportunities contracted. In other countries, recent data
indicates that there is an increasing gap between the number of unemployed and
the number of benefit recipients (over all types of schemes), indicating that
an increasing number of people are not covered at all.

A final dimension worth considering in
performance of flexicurity is the effects the crisis has had on the jobs
structure. Jobs are structured in terms of occupations, like managers, machine
operators and crafts workers, and in terms of economic sectors, like financial
services, construction or manufacturing. Jobs, or occupation and sector pairs,
have shown a clear pattern of polarisation over the economic crisis;
jobs in the middle earnings quintiles have been terminated very clearly while
jobs both in the lowest highest quintiles have seen no changes or even growth,
see figure 8.

At country level, it seems Mediterranean
countries including CY, ES, EL and PT show stronger patterns of polarisation,
while Nordic (SE, FI, NL) and Continental groups (AT, BE, DE, LU) show less
polarisation and more upgrading in job structures, i.e. job growth in higher
earnings quintiles and job losses in lower quintiles.[15]

Figure 8. Changes in numbers of jobs by
wage quintiles, 2008Q2 – 2010Q2, in thousands

7.           Concluding
observations

The experience
of recent years has confirmed flexicurity as a framework and a tool to
understand and implement employment policy-making and to identify good and bad
practices. It continues to be a useful concept within the employment agenda,
supporting Europe's effort to build open, dynamic and inclusive labour markets.
The following points stand out:

(1) 
Labour market segmentation remains a serious concern and the wide variety of the employment
impacts from similar declines in economic activity shows that segmentation
matters. Employment losses were far more serious in more segmented labour
markets and also largely concentrated on the young which tended to have the
greatest share of fixed term contracts.

(2) 
There is evidence that countries that
reformed their systems - for example by shifting the emphasis from
protection in the job to improving unemployment insurance - offered better
employment protection and facilitated labour market adjustment. Similarly,
those countries that allowed workers at the lower end to combine income support
with the taking up of jobs - notably if efforts were made to facilitate further
positive transitions to avoid that people were stuck in low productivity job –
saw better outcomes.

(3) 
During the crisis, internal flexibility (or
internal flexicurity) - through the use of short time work arrangements,
working time accounts, use of temporary opt-out clauses, as well as other forms
of managing labour market adjustment through investment in training of employed
workers - has proved itself to be just as important as external flexibility.

(4) 
Countries with the best experience before,
during, and successfully exiting the crisis, are indeed those that balance
flexibility in adjustment to the crisis related shocks and structural change
with employment security measures. Among those are Member States in the
Nordic and Continental groups. However the Nordic group has seen rapidly
rising unemployment and rather jobless recoveries and the Continental group
rather divergent experiences, possibly so extensive that they no longer really
form a coherent cluster.

(5) 
Flexicurity is both about structural reforms
and social investments. What is important at this
juncture is to agree on the need to undertake and implement the labour market
reforms that can help put back Europe on the path to recovery and growth. In
some cases the favourable impacts of reforms may take several years to see
their full impacts and implications. The reforms in
unemployment benefits show the importance of doing it as part of implementing an
integrated policy package; a comprehensive approach delivers stronger labour
market results than individual measures would.

(6) 
Discussions with Member States and the November
Stakeholder conference have provided important inputs when considering the
future for flexicurity. Through the work of the Employment Committee a common
body of concepts, in terms of flexicurity pillars (ALMP, lifelong learning,
contractual arrangements and modern social security) and common principles has
been developed, feeding into the implementation of the Europe 2020 strategy

(7) 
The current analysis shows that there is a high
number of measures which include multi-stakeholder cooperation and which are
characterised by an explicit definition of the flexibility and security
dimensions - leading to an agreed upon and accepted combination of the two.
Furthermore, the new perspective on the benefits of internal flexibility
instruments places a renewed onus on a reinforced social dialogue at all
levels, including firm level, that contributes to the design,
implementation and monitoring of flexicurity.

(8) 
The concept of flexicurity translates into
concrete policies and practices. Ongoing initiatives in the field can be
described with their expected effectiveness in terms of jobs and income security,
and not necessarily at great (public) costs. Central to these examples is a
renewed balance between various forms of flexibility combined with appropriate
forms of security. Because not all can be delivered by national stakeholders, some
flexicurity measures and mutual risk management can be generated by new
partnerships between local governments, social partners, networks of firms
(notably SME's) and communities.

[1]               An expert group on Flexicurity was set up by the
Commission to elaborate proposals.

[2]               Add reference to 2007 flexicurity communication

[3]               COM(2010)682 final

[4]               Guideline 7 urges Member States to integrate the
flexicurity principles endorsed by the European Council into their labour
market policies and apply them; the Guideline also makes explicit reference to
the four components of flexicurity

[5]               COM(2011) 11 final

[6]               COM(2011) 815 final

[7]               Employment in Europe 2006, Chapter 2 'Flexibility and
security in the EU labour market', DG Employment, European Commission

[8]               There is an extensive literature trying to map
different flexicurity models, most of which have drawn comparable conclusions,
though the number of clusters and their composition may vary. The clusters were
defined mainly on the basis of commonalities in labour market rules,
institutions and practices, rather than on the basis of labour market outcomes,
which have been in some cases different for different countries within the same
cluster. Also, in some cases, the nature or intensity of reforms undertaken
since 2006 by different countries within the same clusters has differed (as
also illustrated by country examples throughout this document) and the cluster
analysis does not aim to be a perfect substitute for a country-by-country
analysis.

[9]               Measuring the impact of flexicurity policies on
the EU labour market, Final Report, June 2011, by Institute for Advanced
Studies Vienna; Social Partners and flexicurity in contemporary labour
markets, Synthesis report, May 2011, by E. Voss, A. Dornelas, A.Wild
and A. Kwiatkiewicz. Evaluation of the first phase of flexicurity
(2007-2010): Interim Report, by GHK, 10 February 2012; The second phase
of flexicurity: an analysis of practices and policies in the Member States
(forthcoming), October 2011, by EUROFOUND

[10]             Council Directive 1999/70/EC concerning the framework
agreement on fixed-term work concluded by ETUC, UNICE and CEEP.

[11]             The Commission is currently evaluating the functioning
of the Council Directive on fixed-term work.

[12]             For more information see http://www.erc-online.eu/content/default.asp?PageID=514

[13]             OECD, Hijzen and Venn, 'The role of short time work
schemes during the 2008-9 recession', OECD Working paper 115, 2011

[14]             Research voor Beleid Panteia, 'Short time working
arrangements during the crisis and lessons to learn', draft version December
2011

[15]             http://ec.europa.eu/social/main.jsp?catId=113&langId=en&pubId=6176&type=2&furtherPubs=yes