Opinion of the Economic and Social Committee on the 'Proposal for guidelines for Member States' employment policies 2000'
Date: 1999-10-20
Institutions: European Economic and Social Committee
Subjects: EU employment policy, business activity, competitiveness, fight against unemployment, gender equality, innovation

20.12.1999

EN

Official Journal of the European Communities

C 368/31

Opinion of the Economic and Social Committee on the ‘Proposal for guidelines for Member
States’ employment policies 2000’

(1999/C 368/12)

On 6 October 1999, the Council decided to consult the Economic and Social Committee, under
Article 128 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the
Committee’s work on the subject, adopted its opinion on 30 September 1999. The rapporteur was
Mr Lustenhouwer.

At its 367th plenary session (meeting of 20 October) the Economic and Social Committee adopted the
following opinion by 78 votes to one, with one abstention.

1.

Introduction

The Economic and Social Committee has noted with
1.1.
great
interest the Commission’s draft employment policy
guidelines for 2000. The Committee is pleased that it can now
state its views on this issue via a formal referral from the
Council, as is now required following the entry into force of
the Amsterdam Treaty. The Committee considers this as key
recognition of its role in formulating a European employment
policy.

The Commission proposals are in response to the call made
by the Cologne European Council of 3 and 4 June 1999. They
reflect the Commission’s intention to press ahead with the
strategy established under the Luxembourg process.

1.2.
The Committee recognises that these draft guidelines
must, for the first time, be considered against the backdrop of
the European employment pact adopted by the Cologne
European Council. This pact directly links employment policy
(Luxembourg) with the coordination of economic policy
(Cologne process) and the strategy designed to boost capacity
for innovation and to enhance the markets in goods, services
and capital (Cardiff process).

In adopting this overall approach — the ultimate aim
1.3.
of which is a lasting cut in unemployment in the EU — the
Council had broadly met the Committee’s wishes in this field.

In point of fact, the Committee Opinion on the implemen-
the employment policy guidelines for 1999 (1)
tation of
highlighted the need for a comprehensive, overall strategy of
this kind. The Committee felt — and still feels — that such an
overall approach must forge links between macroeconomic
policy and other policy areas with an impact on employment.

The Committee notes, for example, the desirability of linking
employment policy with industrial health and safety policy.
Indeed, an effective strategy on health and safety at work
boosts employability and improves the quality of work.

therefore pleased that

The Committee is
this coherent
approach has already been reflected in the Council Recommen-
dation of 12 July 1999 on the broad guidelines of
the
economic policies of the Member States and of the Community
(under Article 99(2) of the EC Treaty) (2). This paper focuses
economic policy entirely on the twin priority of strong,
sustainable growth and employment.

1.4.
Now that Council has translated this approach into a
European pact, the Committee too will consider these draft
guidelines as one component of a more extensive whole.
Accordingly, the Committee will also address developments
within the Cologne and Cardiff processes and work out a
coherent stance for submission to the special European Council
in Portugal in spring 2000, where the progress made in the
three processes mentioned above will be discussed.

In the meantime, however, data supplied by the Member States
may be used to carry out an initial assessment of the efficiency
and quality of action taken. The Committee is aware that, with
upcoming EU enlargement, it will be particularly difficult, but
all the more essential to involve the applicant countries as
quickly as possible in (the discussion of) this employment
strategy and to set up exchanges of experience wherever ‘best
practices’ might be emulated.

2. Overall assessment

2.1.
The Committee notes that the Commission proposals
retain the main features of the current employment policy
guidelines. The ESC endorses this continuity. The employment
strategy does, after all, require Member States to adapt in ways

(1) OJ C 209, 22.7.1999.

(2) OJ L 217, 17.8.1999.

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that take time and are not particularly amenable to radical
annual adjustments. The Committee nevertheless feels that an
effort should be made to incorporate into the employment
guidelines more targets which are verifiable in terms of time
and/or quantity. The Committee is also aware that
the
experience gained still gives only a limited picture of the
measurable effects of
the current approach. Adjustments
should therefore only be possible where there is a more
quantifiable impact on the objectives in mind. The special
European Council in Portugal may possibly conduct an initial
midterm review. As the Commission Recommendation for
Council Recommendations on the implementation of Member
States’ employment policies also indicates, improvements in
statistics will be needed in the short term, particularly at
national level.

it

is important

The Committee also feels that

2.2.
to
maintain the four pillars set out in the guidelines and to press
ahead with them in a coherent and balanced way, particularly
with regard to those Member States which, according to the
draft joint employment report published at the same time as
the draft guidelines, are still trailing behind on a number of
fronts with regard to actual implementation. In that sense, the
current proposals also act as a reminder to drive the point
home.

3. The four pillars

3.1.

Improving employability

3.1.1.
Clearly, the Committee supports pressing ahead with
work done under this pillar. Every Member State will have to
continue working on a precautionary, pro-active approach
designed to prevent people becoming unemployed. Although
economic prospects appear brighter than they did a year ago,
there must be no question of complacency in regard to the
situation on the jobs front, particularly for young people and
the long-term unemployed. This is all the more important
since reports from various Member States indicate that efforts
to reach the quantifiable targets have as yet met with only
limited success. The adjustments involved in this section of the
guidelines in particular are a long-haul undertaking requiring
more time. This requires the expansion of job-centre services
and more general labour-market education and training ser-
vices, as well as sufficient funding to achieve the targets.
Indeed, a pro-active labour market policy is often possible
only as part of an adapted tax and social security system.
Unfortunately, the lack of adequate convergence among the
Member States in these key areas still makes it difficult for any
European labour market policy to have maximum impact. It
takes time to make adjustments of this kind, and these take
several years to work through. Although at EU level and in
certain Member States, good progress has been made on some
fronts, such as life-long learning/training, where each Member
State can accommodate its own specific circumstances, action

still has to be stepped up in a whole range of other areas. At
this point, the Committee would reiterate the importance of
promoting vocational training, for example, through appren-
ticeship schemes (sandwich courses). For some groups of
young people in particular, learning through work may be an
attractive way to acquire training and boost their employa-
bility. In order to gauge the impact of action taken in this field,
Member States will have to do more — as the Commission
now proposes — to provide data on how many jobless young
people have actually found work. Explicit indicators must be
used to determine whether training, assistance with job search
and other pro-active policy measures genuinely deliver on
employment. Ultimately, it is results — not a Member State’s
assurances — which count when it comes to framing future
action. It must also be remembered in this regard that, in
addition to training activities provided, those involved also
have a certain degree of individual responsibility to help
maintain and expand their own employability through a broad
readiness to get actively involved in the retraining and further
training opportunities on offer.

3.1.2.
The Committee feels that it is wrong to take any
satisfaction from a marginal drop in unemployment. Unem-
ployment is not the only issue involved in this approach. In
the long run, labour force participation will be a much greater
cause for concern as demographic changes raise potentially
serious questions about the funding of old age pensions by a
shrinking work force. As the Council notes in its above-
mentioned recommendation on broad economic policy guide-
lines (see footnote 2): ‘At about 61 % in 1998, the employment
rate in the European Union as a whole is low, both in historical
and international comparative terms. Achieving a significantly
higher employment rate and lower unemployment rate over
the medium term would be beneficial for improving living
standards significantly, facilitating the sustainability of public
finances and ensuring a cohesive society.’

In addition,

3.1.3.
If we fail to increase labour force participation, the
social and economic unacceptability of unemployment today
could well undermine the very foundations of society in the
future.
the emphasis which the Commission
guidelines (particularly guideline 4) currently put on the need
to keep older people in the labour market for as long as
possible would seem in the short term to be at odds with
efforts to get more long-term unemployed young people into
work. In policy terms, a balance will have to be struck which
does not trigger an artificial conflict between younger and
older people. A detailed discussion is thus needed on all issues
surrounding work and working time in the course of a
person’s professional career (including questions of voluntary
demotion, voluntary part-time retirement and mentoring
arrangements) in conjunction with a more modern approach
to work organisation.

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The Committee is pleased that the Commission takes the
evolving information society into account under this pillar. As
part of the transition from school to work, schemes will have
leavers’ IT skills with
to be developed to dovetail school
corporate requirements and practices. A high level of training
can help achieve this objective, provided that schools and
other educational establishments have the same facilities
(computers, internet connections and databases) as those used
in business. Member States’ education systems will have to
adapt accordingly and the requisite investments will have to
be made to ensure that first-time job seekers are not already at
a disadvantage when it comes to working with information
and communication technologies of this kind.

The Committee would reiterate the importance it
3.1.4.
attaches to combatting and preventing social exclusion; this is
also reflected in guideline 9. The Committee has the strong
impression that,
in the Member States, specific action to
translate this aspect of the guidelines into practice has remained
to provide equal
is extremely important
very limited.
opportunities for disadvantaged sections of society (people
with disabilities, ethnic minorities and other groups) and to
integrate promotion of equal opportunities into all policy
areas; this is also the case as regards mainstreaming of equal
opportunities policy for women (see point 3.4).

It

not, in itself, a reliable indicator of policy success. The aim is
to increase the number of innovative small businesses and to
prevent people being forced into self-employment because the
normal labour market is unable to offer them the opportunity
or prospect of paid work. Entrepreneurship must be fostered
from this angle and must not be confined to traditional
market-based (and thus profit-driven) corporate activities.
Entrepreneurship remains underdeveloped in the social econ-
omy. Some caring tasks (for children, the elderly and the
disabled) which are under pressure from curbs on public
expenditure — could thrive on new types of operation. Thus,
the Committee feels that the Commission is right to stress the
importance of this type of company for local development. In
business management terms, professional entrepreneurship
often remains underdeveloped in companies such as these and
requires very specific support. The Committee also believes
that it is essential to ensure the equal treatment of more
conventional companies in this respect so as to prevent any
distortion in competition. (3) In this context, a cut in VAT on
these services would also be a potentially good way to make
them more affordable for the target group. The Committee
would ask the Member States to bear this in mind when
compiling the lists of services they would like to benefit from
reduced VAT rates(4).

3.2. Developing entrepreneurship

In practically all Member States and within the EU and its
institutions (1), independent entrepreneurship is seen by public
authorities as a key economic driving force which not only
contributes to GNP, but is also a genuine locomotive for job
creation. Indeed, small companies are often labour-intensive
and create proportionally more jobs than large, more capital-
intensive enterprises. Once again, this bears out the importance
of the recommendation to reduce the fiscal pressure on labour
— something which has still been achieved in only a few
Member States. As the majority of Member States’ national
action plans (NAPs) show, business training schemes primarily
involve providing guidance and information, and fostering an
entrepreneurial spirit among young people and in schools;
only a limited amount of attention is given to specific
adjustment of laws and regulations. Much remains to be done,
however, to eliminate unnecessary red tape and formalities,
not least in arrangements for starting up and expanding
businesses; this will be of particular benefit to microenterprises.
That said, the Committee endorses the findings of a recent
study carried out by the European Trade Union Institute (2)
that a straightforward rise in the number of SMEs in the EU is

3.3. Encouraging adaptability of businesses and their employees

3.3.1.
In conjunction with innovation, discussed in
point 4.1 below, this pillar is essential to European companies.
It involves — as far as possible — lining up a diverse range of
issues (attitudes and assumptions, cultural acceptance, statu-
tory framework and worker and company interests) so that
each dovetails with the others. A delicate balance between
security and dynamism is the key feature of these complex
issues. It is thus right that the social partners should be given
a key role in operations under this pillar (1).

3.3.2.
As the Committee pointed out in its Opinion on the
Commission Green Paper: partnership for a new organisation
of work (5): ‘In a global economy, Europe’s competitiveness
will depend on the extent to which it manages to boost its
ability to innovate, and find more “intelligent” solutions to the
organisation of work and technology. The aim must be
to optimise the relationship between technology and work
organisation, and the use of human resources. Hierarchical

(1) OJ C 219, 30.7.1999.
(2) Entrepreneurship in the European employment strategy, European

Trade Union Institute (ETUI), Brussels, 1999.

(3) OJ C 209, 22.7.1999.
(4) See also Ecofin Council conclusions, 12 July 1999.
(5) OJ C 73, 9.3.1998.

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forms of corporate organisation and traditional Tayloristic
methods of organising work do not always meet the demands
of a flexible organisation of production and services which can
immediately adapt to changed market requirements. They
must be replaced by new formulas for production and work
organisation, in which human potential can fully develop as
the prerequisite for the ability to innovate.’

3.3.3.
These new forms of work organisation are hallmar-
ked by cooperative labour structures geared to participation
and highly-skilled, varied jobs. A survey of companies in ten
European countries carried out by the Dublin-based European
Foundation for the Improvement of Living and Working
Conditions showed that direct employee participation had
boosted production in 72 % of the companies polled and led
to quality improvements in 96 % of cases. Job satisfaction also
improved, with about one third of companies recording a
reduction in sick leave and absenteeism (1).

3.3.4.
These results show that new approaches to work
organisation based on cooperation and employee participation
can help boost productivity and competitiveness and improve
working conditions. This is why, the ESC Opinion on the
Commission Green Paper also expressed the view that the
social partners could be encouraged ‘to engage in in-depth
talks’. These talks must be held at company level with the aim
of initiating specific projects to modernise work organisation.
The experience and outcome of company projects such as
these may be incorporated into the debate on new forms of
work organisation at sectoral
in order to consider
whether — in line with the call made to the social partners in
the employment policy guidelines sectoral level — agreement
is possible on the issue. The ESC feels that the clarifications
put forward by the Commission in this guideline adequately
define the range of issues to be discussed and where possible
agreed upon. Particularly important among these are basic and
further training, which must take account of the new demands
created by the evolution of information technology and new
forms of work organisation.

level,

In this context the EU Commission could play a
3.3.5.
supporting role by promoting the exchange of experience
about good examples of new forms of work organisation, e.g.
by staging conferences.

3.4. Strengthening the policies for equal opportunities

3.4.1.
In a range of opinions, the Committee has pointed
to the fact that women still have a disadvantaged position in
society. The inclusion of equal opportunities as a priority issue
thus endorsed in the Committee opinion on the
was

(1) Cf. The EPOC research group: new forms of work organisation.

Can Europe realise its potential? Dublin 1998.

Commission’s first draft regulations for 1998 (2). The Com-
mittee is pleased that, at EU level, the Commission has taken
steps to implement the task set out in the Amsterdam Treaty,
i.e. to eliminate inequalities between men and women and to
foster equal opportunities in all spheres of EU activity.

still absolutely essential

The Commission’s extremely readable 1998 annual
3.4.2.
report on equal opportunities for women and men (3) notes
that mainstreaming (i.e. the inclusion of equal opportunities in
all EU policy areas), backed up by specific measures, is now
being applied in practice at EU level. The Committee considers
that Member States should take much more forceful action so
that genuine progress can at last be made on equal employment
opportunities for women. The Committee would stress that it
is
to press ahead with these
measures (4). We also welcome the pledge given by the
commissioner-designate for this policy at the European Parlia-
ment hearing on 31 August to pave the way for an adequately
funded fifth equal opportunities action programme. Moreover,
without tangible results, Member States’ credibility is seriously
challenged, particularly since some of them have not even met
their treaty obligations to transpose the Directive on parental
leave into national law (5). The Committee feels that the social
partners must also play their part at every level in areas such
as getting women into or back into work or fostering access
to (continuing) training which is compatible with family and
work responsibilities; regrettably, despite demonstrable efforts
by a number of Member States, inadequate childcare provision
remains an issue.

4. New factors spanning several guidelines

4.1.

Innovation

4.1.1.
One of the key features of these draft guidelines is
the emphasis on innovation. The Committee stresses that
innovation must not be understood only in the strictly
technical sense of the word. Innovation must also come into
play in the context of social processes, wherever labour
markets are not operating as well as they should. This may
mean a new division of responsibilities between the competent
public authorities and the social partners, designed to involve
the latter more closely in all measures taken, for instance, to
combat unemployment. At local
‘best
practices’ may be used to ensure the success of an innovative,
modern, pro-active labour market policy.

in particular,

level

(2) OJ C, 21.1.1998, point 2.8.
(3) European Commission, Equal opportunities for women and men
in the European Union, 1998 annual report, Brussels, March
1999.

(4) For instance, in the fifteen EU Member States, the labour force
participation rate for women is only a mere 50 %, with six
Member States even falling below this EU average.
(5) 1998 equal opportunities annual report, page 25.

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4.1.2.
Innovation in the technical sense (involving both
products and production processes) will have to be the point
of departure for both EU and national employment policies in
order to boost know-how in the European manufacturing and
service industries. This is the only way to secure more added
value which will enable European businesses to confront
global competition on a level playing field. The special
European Council in Portugal in March 2000 — which will
focus on the issue ‘Towards a Europe of innovation and
knowledge’ — will have to give particular impetus to this
process.

In this context attention will also have to be paid above all to
the disadvantaged position of women, in terms both of access
to training and involvement in scientific research.

The Committee welcomes the decisions taken by the
4.1.3.
Cologne European Council to channel more resources via the
European Investment Bank into the European Technology
Facility and risk capital funding of state-of-the-art technologies
in SMEs. The Committee also expects greater willingness on
the part of the EIB itself to adopt a more adventurous attitude
so that these resources go precisely to those companies which,
because of the high risks involved, are unable to access
the requisite funding for their investments elsewhere. A
forthcoming EIB annual report should consider this issue more
fully.

4.1.4.
In addition to the equal opportunities pillar men-
tioned above, the Committee also expects Member States to
incorporate innovation in broad terms into their NAPs in
‘developing entrepreneurship’ and
respect of
‘encouraging adaptability’.

the pillars

4.2. Emphasising the importance of the service sector

A recent study carried out on the Commission’s behalf
indicated that Europe has considerable untapped potential for
job creation in the service sector. Developments in the USA
and Japan show that a high proportion of jobs lost in the
traditional manufacturing industry have been offset by a sharp
increase in service sector employment. The Committee feels

Brussels, 20 October 1999.

that, across all pillars of employment policy, Member States
should take every opportunity to develop the service sector in
promising, knowledge-intensive markets. Furthermore,
the
service sector is marked by a great diversity of enterprises,
including many that are extremely labour-intensive. Such
enterprises are generally small and are found above all in
the consumer sector (including retail and consumer craft
industries). From an employment angle, therefore, it is essential
to retain these companies and promote their continued
prospects. This will be essential, not only from an economic
angle, but also to improve the labour market position of
women who are traditionally well represented in the service
sector.

5. Conclusions

The Committee considers that for too long, inadequate
5.1.
attention has been paid to involving local players (particularly
local-level social partners). The guidelines undoubtedly lean
towards a certain top-down approach.

As the representative of civil society organisations and
5.2.
associations, the Committee speaks for many players within
our society. As in the case in point, however, policy implemen-
tation takes place at local level. This is indeed where it has to
happen — close to the people and working together with
them. This is the only way to highlight the process of European
integration and cooperation and to allow people to learn
from each other’s experiences. Only then can the top-down
approach be supplemented by input from the bottom up
which combines requirements, demands and also successes to
make for better, more effective policy adjustments in the
future.

5.3.
The Committee would therefore issue a broad appeal
to the Commission, the Member States, local authorities and
the social partners to make the package of employment policy
guidelines a reality at local level. The Committee provides a
platform for exchanging local experiences of this kind.

The ESC undoubtedly adds value to the debate. The
5.4.
desired outcome can only be achieved by the interplay of all
those involved (organisations and institutions).

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI