COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT
Date: 2013-12-04
Institutions: European Commission
Subjects: fight against unemployment, first job, job mobility, market access, professional experience, student mobility, traineeship, working conditions, youth employment, youth unemployment













EUR-Lex - 52013SC0495 - EN











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52013SC0495

COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT /* SWD/2013/0495 final */









Table
of Contents
1............ Introduction. 4
2............ Definitions and regulatory context 7
2.1......... Types of traineeships. 7
2.2......... Current regulatory framework. 8
3............ Consultations and stakeholders’ views about the main
problems affecting traineeships. 10
4............ Problem Definition. 13
4.1......... Quality problems. 13
4.2......... How common are quality problems?. 14
4.3......... Consequences of quality problems. 15
4.4......... Problem drivers. 19
5............ Legal basis and subsidiarity. 21
6............ Policy Objectives. 23
7............ Policy coherence and contribution to Europe 2020
objectives. 23
8............ Policy options. 24
9............ Analysis of impacts. 26
9.1......... Option 0 – Baseline. 26
9.2......... Option 1 – Information website. 28
9.3......... Option 2 – Voluntary Quality Label 29
9.4......... Option 3 – ‘Council Recommendation on a Quality Framework for
Traineeships. 31
9.4.1...... Option 3a – Council Recommendation on a Quality Framework for
Traineeships 'basic' 31
9.4.2...... Option 3b – Council Recommendation on a Quality Framework for
Traineeships with enhanced transparency. 38
9.5......... Option 4 – Directive on a Quality Framework for Traineeships. 41
9.6......... Summary and comparison of options. 43
10.......... Monitoring and evaluation. 44
11.......... References. 46
12.......... ANNEXES. 49
12.1....... Examples of Member States’ Initiatives to Enhance Trainee Protection in
the Open Market 49
12.2....... Differences between Traineeships and Apprenticeships. 50
12.3....... Regulatory Framework. 51
12.4....... Main concerns identified by the Traineeship study. 52
12.5....... Quality of traineeships and labour market outcomes: an econometric
analysis of the data of the Eurobarometer survey. 53
12.6....... Results of the European Youth Forum survey. 62
12.7....... SMEs Test Results. 63
12.8....... Case studies - the benefits and costs of providing quality traineeships. 71
12.9....... Motivations for supplying and applying for traineeships. 72
12.10..... Economics of traineeships. 75
12.11..... Geography of quality. 83
12.12..... A voluntary approach to Quality Labels for Traineeships. 84
12.13..... Summary tables per each option. 85
 Executive Summary Sheet 
 Impact assessment accompanying the document Proposal for a Council Recommendation on a Quality Framework for Traineeships 
 A. Need for action 
 Why? What is the problem being addressed? 
 Traineeships can effectively enhance young people's employability through providing a stepping stone to the labour market. Nevertheless, despite their benefits, concerns about the effectiveness and quality of traineeships in general, and open-market traineeships in particular, have been increasingly recognized by a wide range of stakeholders including European Institutions. These concerns, and especially low learning content and substandard working conditions have been confirmed by a recent Eurobarometer survey. Low or no pay, as well as the low share of transnational traineeships are further problems indicated both by stakeholders and surveys. While these are not in the direct focus of the initiative, certain options may have an indirect impact on them. 
 What is this initiative expected to achieve? 
 The initiative aims to  (1) Increase the share of quality traineeships;  (2) Discourage abusive practices while keeping the compliance costs for traineeship providers limited;  (3) Enhance information on and facilitate access to transnational traineeships. 
 What is the value added of action at the EU level? 
 Currently there very diverging regulatory frameworks in Member States regarding traineeships. A common understanding of what a traineeship is and what minimum standards should apply to them will help shape Member States’ policies and regulatory approaches. In this way, the EU could concretely support Member States in implementing the Europe 2020 employment guideline nr 8, in particular ‘enacting schemes to help young people and in particular those not in employment, education or training find initial employment, job experience, or further education and training opportunities, including apprenticeships, and should intervene rapidly when young people become unemployed.’ In the framework of the European Semester process, the Commission should provide guidance to Member States for efficient implementation of their commitments related to youth employment. Quick and effective implementation of CSR recommendations on youth employment requires concrete and specific guidance on quality traineeships. Furthermore, the QFT would address one key obstacle for cross border mobility, lack of information, in an area of great regulatory fragmentation. The QFT is essential for the extension of EURES to traineeships, as requested by the European Council conclusions of 28/29 June 2012. This is to prevent the risk that support through EURES is provided to substandard traineeships that will not help smooth education to work transitions. The Recommendation would also help to underpin the support provided by ERASMUS+. The Quality Framework is an important reference point for determining a good quality offer of traineeships under the Council Recommendation on Establishing a Youth Guarantee. 
 B. Solutions 
 What legislative and non-legislative policy options have been considered? Is there a preferred choice or not? Why? 
 There are four policy options to consider: Option 0) No new Commission initiative (baseline) Option 1) Information website about traineeship conditions and legal framework in Member States. This non-regulatory approach could increase the availability of general and specific information about traineeships in all Member States. Option 2) Quality Label. Could be based on agreed quality principles or minimum quality guidelines for traineeships (same as in option 3a). Traineeship providers could take up the label voluntarily. Option 3) Proposal for a Council Recommendation on a QFT. Two sub-options: 3a) QFT basic: traineeships should be based on a written traineeship agreement that specifies educational objectives, working conditions, rights and obligations and a reasonable duration of the traineeship. Remuneration and/or compensation and social protection would not be compulsory, but the agreement should specify whether they are provided, and if so, what can the trainee expect. 3b) QFT+Transparency: further to QFT basic traineeship providers would have to clarify remuneration and/or compensation and social protection coverage already in the vacancy notice; and in the case of unpaid traineeships they would have to disclose information at the conclusion of the traineeship agreement about the number of trainees and the share of those who were recruited by the same traineeship provider after their traineeship within the 3 previous years. Option 4) Proposal for a Directive on a QFT+Transparency: same content as option 3b.   The most balanced option, in terms of proportionality and effectiveness seems to be 3b) (Council Recommendation on a QFT+Transparency). 
 Who supports which option? 
 The public consultation as well as the social partner consultations show that trade unions and youth organisations tend to support a legally binding proposal (Directive or at least a Council Recommendation).  Employers, businesses and some MS prefer non-binding guidelines (label or at most Council Recommendation). Our analysis shows that the acceptance of a Council Recommendation seems to be the highest. Content wise, the elements included in the QFT are supported by most stakeholders. This was also confirmed by an SME survey conducted in 2013, which showed that the overwhelming majority of SMEs could implement the quality elements proposed by the Commission without difficulty. 
 C. Impacts of the preferred option 
 What are the benefits of the preferred option (if any, otherwise main ones)? 
 A Council Recommendation on a QFT+Transparency can be adopted quickly, has very low compliance costs for quality traineeships and discourages unscrupulous practices through market mechanisms. It is expected to have tangible effects and is expected to stimulate higher level of quality of traineeships through better learning content and working conditions. Acceptability for publication of remuneration conditions in the vacancy notice is high (90% of SMEs responded positively in SME test). Acceptance for the transparency requirement on hiring policies may be lower; nevertheless, its compliance costs are negligible. 
 What are the costs of the preferred option? 
 Only marginal costs mainly linked to ensuring a mentor and to the conclusion of a written traineeship agreement, the latter being a one-off cost. These costs could be reduced by elaborating and making available simple and concise model traineeship agreements, 
 How will businesses, SMEs and micro-enterprises be affected? 
 There will be only marginal compliance costs related to the working time of the mentor as well as of the HR officer responsible for the conclusion of the traineeship agreement. This is already an existing practice at the majority of traineeship providers. SMEs expressed a 90% acceptance to these measures in a recent SME test. 
 Will there be significant impacts on national budgets and administrations? 
 No budgetary impacts. National public authorities will be in charge of the implementation of the QFT. 
 Will there be other significant impacts? 
 None. 
 D. Follow up 
 When will the policy be reviewed? 
 A policy review could possibly take place after 2016, when a follow-up Eurobarometer and an ad-hoc module on young people within the Eurostat Labour Force Survey will provide data on implementation. 
1.           Introduction
Over the last two decades traineeships, also known as internships or
'stages', have become a standard feature in our labour markets and increasingly
represent the main entry point into the labour market for young people[1]. There is wide consensus on the fact that a traineeship represents
a useful experience, complementing traditional classroom instruction with
important practical skills, and can facilitate access to employment. However,
there are growing concerns that a significant share of traineeships does not
provide a meaningful learning experience, takes place under substandard working
conditions, and in effect does not constitute a real traineeships but simply a
low-cost replacement for regular jobs. 
To act upon these concerns
and following calls by the European Parliament[2]
and the European Council[3],
the Commission last year launched consultations with the wider public and with
Social Partners and announced that it would present a Quality Framework for
Traineeships (QFT) by the end of 2012[4].

The Impact Assessment aims
to identify and analyse which policy options can lead to a higher share of
quality traineeships, notably by providing standards that can be utilised as
best practice and by discouraging the offer of substandard traineeships. 
This Impact Assessment
builds upon the Analytical Document presented by the Commission in December
2012 in the context of a Social Partner consultation on traineeships[5].
It adds several new elements, such as previously unavailable data on the number
and quality of traineeships, and presents new evidence assessing the impact of
quality problems on the future employment prospects of the affected trainees.
It also puts forward proposals for a Quality Framework for Traineeships that
includes the elements identified as most apt to enhance trainees’
employability. Finally, the Impact Assessment includes new proposals on
transparency that are meant to strengthen the possibility for young people to
distinguish quality traineeships from substandard ones before they begin,
helping them to make a better choice.
2.           Definitions and regulatory context
2.1         Types
of traineeships
Traineeships are generally
understood as a limited period of work practice spent at business, public
bodies or non-profit institutions either by students or by young people having
recently completed their education, in order to gain practical work experience
ahead of taking up regular employment[6].
They generally last a few weeks to a few months, and are usually not considered
to constitute employment contracts, as their main aim is to provide a training
experience, not a paid work opportunity. Traineeships must not be confused with
apprenticeships, which are generally much longer, lead to formal academic
qualification and are more regulated. Annex 0 gives more detail on the
differences between the two. 
One may distinguish five
major – partly overlapping - types of traineeships:[7] 
1.     
Traineeships forming an optional or compulsory
part of academic and/or vocational curricula (i.e. traineeships during
education);
2.     
Traineeships which form part of mandatory
professional training (e.g. law, medicine, teaching, architecture, accounting,
etc.);
3.     
Traineeships as part of active labour market
policies;
4.     
Traineeships agreed between trainee and a traineeship
provider (business, non-profit or government) without the involvement of a
third party, generally conducted after completion of studies and/or as part of
a job search, known as ‘post-studies’ or ‘open-market’ traineeships[8];
5.     
Transnational traineeships, which may include
types 1, 2 and 4, but for the purpose of the Impact Assessment are considered
as a separate group.
This impact assessment will
focus on types 4 and 5. This choice is due to three considerations. Firstly,
the Traineeship study has identified open market traineeships and transnational
traineeships as those where the concerns over their quality are strongest.
Secondly, in the case of types 1, 2 and 3, national and regional institutions
are closer to the problem and are better placed to take corrective action if
necessary. Finally, Type 5 traineeships are of particular relevance in the EU
context owing to the policy issues raised by the differences in the regulatory
framework currently existing among Member States[9].
2.2.        Current regulatory framework
The regulatory framework
in general and the strictness of the regulation in particular varies widely
both amongst the different types of traineeships and across Member States (see Table 1). At one end, France regulates all
types of traineeships by law, while in countries such as the Bulgaria or the UK
there is no specific legal definition for trainees[10]. In six
Member States (CY, IE, LT, LU, LV, UK), no legal definition of traineeships
exists[11].
Less than half of the Member States have provisions on the duration,
remuneration or social protection coverage. 
Table 1 Key differences in regulatory framework
 Issue || Yes || No || Legal situation uncertain 
 Legal definition of traineeships || AT, BE, BG, CZ, DE, DK, EE, EL, ES, FI, FR, HU, IT, MT, NL, PL, RO, SE, SI, SK || CY, IE, LT, LU, LV, UK || PT 
 Legal provisions on duration   || BE, BG, DE, EE, EL, ES, FI, FR, HU, IT, LU, MT, PT, RO, SI, SK, UK || AT, CY, CZ, DK, LV, NL, SE || IE, LT, PL 
 Legal provisions on remuneration || EL, ES, FR, HU, IE, LT, MT, PT, RO, SE, SI, SK || AT, BG, CY, CZ, DK, FI, IT*, LU, LV, NL, UK || BE, DE, EE, PL 
 Legal provisions on social security protection || AT, BE, BG, CY, EL, FR, LT, RO, SE || CZ, DE, DK, EE, ES, IE, IT, LU, LV, MT, NL, PT || FI, HU, PL, SI, SK, UK 
 Absence of legal and administrative barriers for trainees from other EU MS || DK, IT, MT, SE, SI || BE, DE, EL, ES, FR, IE, LU, LV, NL, PL, RO || AT, BG, CY, CZ, EE, FI, HU, LT, PT, SK, UK 
 Traineeship contract offered as a common practice || AT, BE, BG, DE, DK, EE, EL, ES, FI, FR, IE, IT, LT, LV, MT, NL, PT, SI, UK || CY, LU, PL || CZ, HU, RO, SE, SK 
Source:
Traineeship study, European Commission (2012a) * Note: In Italy guidelines on
traineeship were published after the Traineeship study was completed, that
include legal provisions on remuneration. They are not included in the table.
In many countries the
training objective and the fact that traineeships are not considered to
constitute 'work' result in the freeing of traineeships from minimum wage
requirements, sometimes with an explicit stipulation of a minimum compensation
and a (usually much) lower level of protection than for regular employees.  
In practice, the
distinction between training activities and work can be difficult as the
hands-on nature of on-the-job training makes it hard to distinguish from work
itself. Given the lower cost of trainees the stricter regulatory approaches
therefore typically list criteria to differentiate what trainees and regular
employees can do. If a trainee then carries out tasks not meant for a
traineeship, the results can be a fine, or the application of the employment
status to the traineeship, with consequences such as the need to pay minimum
wage.
An example of a strict
regulatory approach: the US 
On traineeships, the U.S.
follows a much more stringent regulatory approach than most EU Member States.
Unpaid traineeships are allowed only under very restrictive rules aiming at
ensuring a clear distinction from regular employment and a tight link to
training purposes. For example, it is required that the training is similar to
that which would be given in a vocational school; that the employer derives no
immediate advantage from the activities of the trainees and that on occasion
the employer’s operations may actually be impeded; if these and other
conditions (so-called six-point test) are not respected, the trainee is
considered an employee and entitled to minimum wage (Edwards, Hertel-Fernandez,
2010). In practice, however, these guidelines are hobbled by legal and
technical issues making their application far from straightforward; partly for
this reason they have not been extensively enforced until recently (Curiale,
2010).
Similarities with
legislation in EU Member States
In Europe, the regulatory
picture is fragmented and differs between countries and types of traineeships,
but the criteria to delimit admissible training activities and regular job
content appear to be less elaborate and detailed, if at all present. In France
legislation dictates that “traineeships cannot be concluded to replace an
employee in case of absence, of suspension of his contract, or to execute a
regular task corresponding to a permanent job, to address a temporary work peak
in the enterprise, to fill a seasonal job[12].
Spanish legislation distinguishes between post-studies traineeships, the pràcticas
no laborales, which do not have employment status, and the contrado de
trabajo en pràcticas which does; in the case of the pràcticas no laborales,
the regulation prevents trainees to be utilised to ‘contribute a productive
value’ to the traineeship provider, which is allowed for the contrado de
trabajo en pràcticas. Such distinctions has been criticised as difficult to
enforce and opening the door to abuse (Todoli, 2013, p. 6-9). The delimitation
issue appears to be a challenge in many jurisdictions (see for example
Langille, 2012 for Canada).
3.           Consultations
and stakeholders’ views about the main problems
affecting traineeships
Public
consultation 
The Commission has
consulted a wide range of stakeholders about which issues require policy action
and the ways in which the EU could most usefully intervene. The results of
these consultations were extensively reported upon in last year’s Analytical
Document[13]
. 
Some of the main concerns
expressed in the 2012 public consultations were on the appropriateness of EU
intervention in this domain and the form that the intervention should take.
Trade unions, as well as NGOs, youth organisations, educational institutions
and most individual respondents generally supported a Commission initiative;
some of them called upon the Commission to consider issuing a legally binding
framework at EU-level. Employers' organisations, chambers of commerce and
industry often adopted a more sceptical stance. Employer organisations and
Member States often referred to the need to keep the framework sufficiently
flexible to take into account the diversity of national practices. Traineeships
should not be burdened with heavy legal or administrative procedures. Calls for
strengthening regulation in this area at EU level have been renewed recently,
following the death of a trainee in an investment bank in London, reportedly due
to excessive overtime work (Les Echos, 23 Aug. 2013). 
Scope of policy action
Opinions about the scope
of a possible initiative were varied. Many educational institutions preferred
to keep the scope limited to traineeships that are part of study curricula/programmes;
while other respondents including most employers suggested limiting the
framework to 'open market' traineeships. 
On the elements to be
included in a QFT, most respondents agreed with the Commission's analysis and
definition (traineeship contract, clear objectives and content, limited
duration, adequate social security/remuneration etc.). Businesses and
employers' organisations mostly argued that remuneration and social protection
issues do not fall under EU competence; however, the European Roundtable of
Industrialists (ERT) stated that in most cases trainees should be remunerated
and highlighted the importance of the Traineeship agreement as a tool to
clarify mutual obligations, including company confidentiality policies, the use
of company (intellectual) property, and so on. 
Consultation with
Social Partners
Following the publication
of the Analytical Document, EU Social Partners answered the first- and
second-stage consultations confirming the positions already expressed in the
public consultation. At the Social Dialogue Committee meeting of 23 October
2012 employer's organisations expressed their readiness to start discussions on
traineeships as part of the EU social partner autonomous negotiations on a
Framework of Action on Youth Employment. However, the European Trade Union
Confederation at that stage considered that the discussions on the Framework
were not the appropriate place for negotiations under Article 154 TFEU.
The 2nd stage
consultation of the social partners was launched as part of the Commission's
Youth Employment Package of December 2012. In their replies, EU social partners
informed the Commission that they did not intend to launch negotiations on a
possible agreement under Article 154 TFEU; therefore the Commission decided to
go ahead with its own initiative, taking into account the views expressed in
the consultation. 
On 11 June 2013 ETUC,
BUSINESSEUROPE, UEAPME and CEEP presented their Framework of Actions on Youth
Employment (FoA), resulting from social dialogue negotiations taking note of
the Commission’s intention to propose a Council Recommendation on the European
Quality Framework on Traineeships. Social partners envisage taking further
joint actions towards the Council and the European Parliament based on an
upcoming Commission proposal for a Council Recommendation on a European QFT.
Small and medium
enterprises (SMEs) – SME test
Following a consultation
of SMEs through UEAPME in 2012, between March and June 2013 an SME test was
conducted to inquire about the quality of traineeships provided by SMEs (from
an employer perspective), as well as on the compliance costs of potential QFT
measures. In total, 914 SMEs replied to the survey.  The SME test showed that
the majority of SMEs questioned (71.9%) saw offering traineeships as a way to
select and train future employees, and as such the test highlighted the
importance of traineeships to create jobs in such businesses (see Box 1 for the
results).
Box 1 Quantifying
the factors driving the supply of traineeships
The Commission ran a
survey among European SMEs between March and June 2013. SMEs were asked about
their practices offering traineeships, their motivation to do so, the quality
elements they ensure to their trainees and the compliance costs of these
quality elements (as well as of quality elements that a potential Quality
Framework for Traineeships could contain). As for their motivation for offering
traineeships, 71.9% of a total of 914 SMEs reported they wish to train
potential future employees; 35.4% underlined that trainees bring new ideas to
the enterprise; 31.6% mentioned that it is part of their Corporate Social ­Responsibility
policy to contribute to the education of high skilled staff. 12.8% said that
offering traineeships helps them to build a corporate image. As for the cost
savings, 10.8% replied that trainees provide a cheap and flexible workforce for
the organisation (Source: European Commission, 2013).
These results are in
line with previously available evidence from the UK. In a 2011 survey of 218 top, senior and middle level
managers in the UK, 52% said that the main reason for taking on interns was to
identify new talent for the organisation, while 17% said it was to get work
done more cheaply. A 95% share of them believed that interns were useful to the
organisation
Source: Commission
services, 2013
Eurobarometer survey on
traineeships
In May 2013 a
Eurobarometer survey was conducted in the EU27 and Croatia to quantify concerns
about the quality of traineeships. This was the first-ever EU-wide
representative survey on the topic. Its results are detailed in Box 2.  Some of the most interesting results
include confirmation of how widespread phenomenon traineeships are: 46% of the
18 – 35 year olds surveyed had completed at least one. For three traineeships
one was deemed unsatisfactory, either in terms of working conditions or
learning content in line with results of previous more partial surveys.
Further targeted
consultations with policy experts and other stakeholders
On 5-6 June 2013 the
European Commission organised the conference 'Advice on apprenticeship and
traineeship schemes'. Two workshops discussed the policy challenges on
traineeships and quality assurance. The outcomes provided useful input to this
Impact Assessment. Furthermore, a Trainee Forum was organised in February 2013
to discuss with trainees (mainly, but not exclusively from EU Institutions) the
problems related to traineeships and possible solutions. 
Consultations within
the European Commission
DG Employment, chef de
file for this initiative, has had a long-standing regular cooperation with
DG Education and Culture on traineeships. Further to the EMPL-EAC cooperation,
DG EMPL set up an Impact Assessment Steering Group with the involvement of SG,
SJ and DGs EAC, ECFIN, ENTR, HOME, INFSO/CNECT, MARKT and RTD. This IASG has
met 5 times in the past year.
Recommendations from
the Commission Impact Assessment Board (IAB)
The Impact
Assessment was submitted to the IAB in September 2013. In its first opinion of
4 October the IAB requested mainly to better clarify the problem to be
addressed and to better reflect the existing regulatory and voluntary
initiatives. 
In its second
opinion of 15 November 2013 the IAB made further requests to improve the
problem definition, clarify the EU need to act, better explain how the options
address the problems and better substantiate the impacts. Both opinions
resulted in additions and redrafting of the Impact Assessment.
4.           Problem Definition
4.1.        Quality problems
The public consultation as
well as the Traineeship study has listed a range of problems currently
affecting traineeships in the EU. Two groups of problems in particular stand
out as both being of key importance: one is the insufficient learning content
and the second is the unsatisfactory working conditions. 
1) The learning content
problem refers to complaints that instead of receiving meaningful training,
trainees are just put to work being asked to do menial tasks. This runs against
the purpose of traineeships which is to learn. However this is not only an
ethical issue – if too many traineeships provide insignificant learning,
traineeships may acquire a bad reputation, undermining their effectiveness even
of quality traineeships in easing young persons’ transitions from school to
employment. 
2) The working
conditions issue instead refers to complaints such as long working hours,
lack of coverage for health and safety or occupational risks, lack of clarity
on the applicable legal regimes, equal treatment, and so on. Bad working
conditions undermine motivation and may create an unfair competitive advantage.
In the remainder of the
analysis, we define as substandard traineeships those that are
unsatisfactory with respect to either learning content or working conditions. 
In addition to the
previous two problems, stakeholders highlighted the issue that a large share of
traineeships are unpaid or, if paid, offer a compensation that does not allow
trainees to cover basic living costs. This creates an equal access problem[14].
Furthermore, the fact that more and more traineeships are unpaid could create a
tendency in the labour market for employers to replace paid workers with
trainees. Indeed, the UK Low Pay Commission writes in its 2013 report about
"widespread non-payment of the minimum for positions that appear to be
work". The issue of pay or compensation as such will not be addressed at
EU level due to subsidiarity reasons. Yet, more transparency would allow more
efficient functioning of the labour market. 
No scarcity in domestic
traineeships, but transnational traineeships are
rare
While no official
statistics on traineeships exist, there does not seem to be a scarcity of
traineeships.. Traineeships have become very common: the Eurobarometer survey
indicates that a 46% share of youths have done traineeships, almost double the
share of apprenticeships or student jobs.In addition, the average number of
traineeships completed was 2.5 per person, which is scarcely compatible with
the idea of a traineeship shortage. In addition, while the absence of
statistics makes it impossible to prove, experts concur on the existence of a
worldwide trend towards more traineeships; a growth has been notably observed
in France[15],
Italy (for which data are available - see Figure 1) and in the US (Perlin
2011)). The reason why traineeships are spreading is likely to be linked at
least partly with the fact that the majority of them are unpaid, or paid
little, and thus represent a relatively affordable investment for traineeship
providers even in times of crisis.
However, there is a low
number of transnational traineeships. The Eurobarometer survey found
that only 9% of traineeships were transnational, despite very high student
mobility rates, e.g. in the Erasmus programme. This appears to be an important
missed opportunity in terms of reducing youth unemployment through mobility:
currently, many vacancies cannot be filled on the local job market, and
transnational traineeships could be a key facilitator for taking up employment
in another EU Member State. 
4.2.        How
common are quality problems?
The next step in the
analysis was to identify the scope and frequency of quality problems.
This is not an easy task, given that no statistical office collects data on
traineeships, and, with the exception of Italy, the available survey data are
very scarce. To address this difficulty, a Eurobarometer survey was
commissioned. The survey was conducted in such a way to give a representative
picture of the traineeship experience in the EU in the recent years. Thirteen
thousand people in all EU Member States and Croatia were asked about their
traineeship experience.
Comparing the results
with earlier surveys
The Eurobarometer survey,
on account of its methodological solidity, its pan-European geographical
coverage and its representativeness is a better basis then earlier surveys; it
is also very recent (May 2013). Its results are detailed in Box 2. A comparison
of the Eurobarometer results with other previous surveys however shows quite
similar results; if anything the Eurobarometer gives a somewhat more positive
picture, possibly due in part to answering biases (see Table 3 and Annex 12.6)[16].
The questions in the
Eurobarometer survey were selected to shed light on the elements that the
Traineeship study had identified as being key for the quality of the
traineeship. Special care was taken to formulate the questions to make them
comparable across sectors and countries and avoid very general and purely
subjective answers about satisfaction with the traineeship. Rather, the survey
asked specific questions about the traineeship experience, such as
whether a written contract was signed, whether a mentor had been assigned to
the trainee, whether the trainee learned things that were useful professionally,
whether the traineeship was paid and so on. The questionnaire was designed to
be comparable with earlier surveys to cross-check results. 
The answers made it
possible to quantify how often the key quality elements identified by the
Traineeship study were present. In line with more partial surveys done earlier,
it found that while the majority of traineeships is of sufficient quality, a
significant minority is not. In particular, 18%[17] of
traineeships were reported to have an insufficient learning content, while in
one case in four the working conditions (excluding pay) were found to be not
comparable to those of regular employees in terms of working hours, leave
rules, etc. Overall, 30% of traineeships were found to be substandard, i.e.
deficient in terms of either learning content or working conditions. Often, the
traineeships were found to be deficient in both aspects[18] (see Box 1).
It is also important to note that this figure covers all types of traineeships
(including traineeships as part of the study) and therefore might underestimate
the phenomenon.  
4.3.        Consequences
of quality problems
The next step in the
analysis was to evaluate what were the practical consequences of this lack of
quality. The aim was not so much to assess the impact on the well-being or
motivation of the trainee, but rather to check whether substandard traineeships
led to worse employment prospects. 
The econometric analysis
contained in Annex 12.5 and based on the Eurobarometer results found a
significant, in some cases highly significant link between the quality of the
traineeships, and the employment outcome. In other words, those that had
done a substandard traineeship were significantly less likely to find a job
afterwards. 
Conversely, quality
traineeships do not only clearly translate into a higher chance of being
offered a work contract by the same organisation, but are also associated with
lower risks of being unemployed later.
How traineeship quality
was measured
For the purposes of the
econometric analysis, traineeship quality was defined as the absence or
presence of the quality elements identified in the Traineeship study (e.g.
written agreement, presence of a mentor, comparable working conditions, etc).
This allowed testing the relevance of these quality elements in terms of the
employment outcome. 
The link between
quality and hiring perspectives
The econometric analysis
in annex 12.5 confirmed the correlation, already highlighted in last year’s
Analytical Document, between quality and the intention to hire. It turns out
that there is a clear link between working conditions and the probability of
being offered a work contract at the end of the traineeship. Another example is
that those who do not sign a traineeship agreement have only half the
probability of being offered a work contract at the end of the traineeship.
Several others of the quality elements identified by the traineeship study were
found to correlate with the probability to find employment; this not only
confirms the importance of quality in general, but also validates the relevance
of the specific quality elements identified by the Traineeship study.
The best quality
traineeships are typically offered by traineeship providers aiming to hire
personnel. A high share of traineeship providers uses traineeships to prospect
for potential employees – for example, this applies to almost three in four
SMEs (71,9% according to the survey). The aim of creating a long-term working
relationship with the best of their trainees explains why organisations wanting
to hire put in more effort, on average, in training them properly and in
providing adequate working conditions. It also explains the strong correlation
between quality and compensation: the latter signals that the traineeship
provider is willing to 'go the extra mile', and indeed, lack of
remuneration/compensation is indeed associated with a significantly lower
probability of being hired by the same organisation (see table 2). However, the
Eurobarometer results also show that while paid traineeships are clearly better
quality, it is not true that an unpaid traineeship need be substandard:
trainees often reported their experience with an unpaid traineeship as positive
and useful. For this reason, this impact assessment does not consider the
compensation issue as determinant for quality, as done for example by
Todini (2013). 
Overall, the econometric
analysis found that those who think their traineeship was helpful were only 60%
as likely to be unemployed than those who disagree to such a statement. Another
important result is that quality traineeships translate into a higher chance of
being offered a work contract by the same organisation.
Another significant
results underlining the importance of the quality elements identified by the
Traineeship study is for instance that those who do not sign a traineeship
agreement have only half the probability of being offered a work contract.
Furthermore, lack of remuneration/compensation is associated with a
significantly lower probability of being hired by the same organisation. Finally,
there is a clear link between working conditions and the probability of being
offered a work contract at the end of the traineeship.
.Table 2
Traineeships: compensation and quality indicators
 % share of traineeships satisfying the following quality element || Paid traineeships || Unpaid traineeships 
 Employment offered at end of traineeship || 42 || 20 
 Written agreement || 77 || 52 
 Health / accident insurance || 76 || 64 
 Traineeship (partly) in other country || 13 || 8 
Opportunity costs
The methodology used in
the econometric analysis quantifies the employment impact but does not take
into account the other opportunity costs from substandard traineeships. While
trainees may ultimately be able to find a job, spending time on a substandard
traineeship delays the entry into the labour market, undermines motivation,
and, in the typical case of unpaid substandard traineeships, cause a running
down of savings which could be used to acquire human capital. Given the
Eurobarometer result showing the 36% of trainees do three or more traineeships,
these costs can be significant[19].
Box 2 Main
results of the Eurobarometer survey on traineeships quality
 The survey on traineeships quality was conducted In May 2013 in all EU Member States and Croatia: 12921 people in the age group 18-35 were interviewed on their personal traineeship experience. The survey found that 46% of the 18-35 year old population had had at least one traineeship. Respondents had on average undergone 2.5 traineeships; of these 1.7 traineeships took place after the studies. A 24% share of respondents had their last traineeship after finishing their studies (the majority of these traineeships are open market traineeships, i.e. no other party is involved apart from the trainee and the traineeship provider). The typical traineeship lasts one to three months (this is the case for 37% of all traineeships); only 15% of traineeships lasts longer than 6 months. Those that had done more than one traineeship were asked about the last traineeship and then to a randomly chosen previous one. This was done to test the assumption that the last traineeship undertaken is usually better quality than previous ones, which was indeed fully confirmed. As a result two datasets are available; generally this Impact Assessment reports the result for the randomly chosen traineeship, felt to better represent average quality, however in some cases data are available only for the last traineeship. Data confirm the validity of the concerns about the quality of traineeships, although they also show that the  majority of traineeships is either of good or acceptable quality. Quality was measured through questions on the learning content (e.g. whether the trainee gained useful experience, whether a mentor was foreseen, etc), and on working conditions. Questions on pay/social protection were also included; however it is important to note that pay is excluded from the operational definition on quality, which relates only to satisfactory learning content and working conditions. A 30% share of traineeships was found to be unsatisfactory either with regards to working conditions or learning content (improving slightly to 25% for the last traineeship). As could be expected, low quality in working conditions is positively correlated with a poor learning quality. More than one third (35%) of the trainees have not signed any traineeship contract, confirming fully the concerns about lack of awareness of working conditions. As for the learning content, 18% report not to have gained useful knowledge in professional terms. About one in ten trainees (11% for the random traineeship, 9% for the last) could not turn to a mentor for any guidance. A 23% share felt that working conditions (equipment, working hours, workload…) were inferior to those of regular employees. While three in four trainees (76% for the random traineeship) were covered by social protection, the main concern put forward was confirmed to be pay/compensation: only 32% of trainees received compensation (40% for the last traineeship) and only 41% of those that were paid were able to cover their living costs. Thus, about four in five trainees had to finance their traineeship on their own, in whole or in part. Trainees were also asked whether the traineeship vacancy notice made the level of compensation clear, with only 42% replying positively. As expected, repeated traineeships also proved to be a major issue: almost one in four trainees (23%) were offered to renew or extend the traineeship at its end. This is a particularly doubtful practice since in such cases there is a strong suspicion that these traineeships simply replace jobs. However, 27% were offered a work contract after the end of the traineeship confirming the positive role that a traineeship can play in finding a job. On the other hand, 28% found that their last traineeship did not help them to find a job.  One in three trainees (34%) did not receive any certificate at the end of the traineeship. Adding up those who were offered to renew the traineeship and those who got a job, we find that half of the TPs were satisfied enough to keep the trainee. Finally, the survey confirms the low rate of transnational traineeships: only 10% of the traineeships took place abroad. Among those who have not had the opportunity to go on a traineeship abroad but would have liked to, 38% indicated that lack of information was the main problem; while 48% referred to lack of resources. Based on survey results, the low rate of transnational traineeships has a direct impact on mobility: amongst those who have had a traineeship abroad, their language knowledge was improved in a very large proportion (79%) and in a large majority the traineeship made them consider working abroad (69%). Source: Eurobarometer, European Commission, 2013 
Table 3 Overview of quality indicators for
traineeships from different sources
 Indicator || Value || Source(s) || Year || County 
 Learning content                                                                                                                                                                                                            
 Mentor' s performance: good or excellent || 88% || Eurobarometer || 2013 || EU-wide 
 Mentor' s performance: less than satisfactory or not satisfactory || 11% || Eurobarometer || 2013 || EU-wide 
 Traineeship useful professionally || 71% || Eurobarometer || 2013 || EU-wide 
 Traineeship not useful professionally || 18% || Eurobarometer || 2013 || EU-wide 
 Mentor' s performance: good or excellent || 55% || EYF Survey, p.19 || 2011 || EU-wide 
 Mentor' s performance: less than satisfactory or not satisfactory || 18% || EYF Survey, p.19 || 2011 || EU-wide 
 Relevance to respondents' field of study: good or excellent || 55% || EYF Survey, p.19 || 2011 || EU-wide 
 Relevance to respondents' field of study: not satisfactory || 6% || EYF Survey, p.19 || 2011 || EU-wide 
 Beneficial in terms of extending experience and practical knowledge || 83% || Fuchs / Ebert || 2008 || DE 
 Good mentoring || 81% || Fuchs / Ebert || 2008 || DE 
 Useful in terms of learning outcomes || 70% || Briedis / Minks || 2005 || DE 
 Duties/tasks at a good level || 67% || Briedis / Minks || 2005 || DE 
 The traineeship content was good || 64% || Kravietz || 2006 || DE 
 Usefulness for professional development || 57% || Kravietz || 2006 || DE 
 Usefulness for professional orientation || 66% || Kravietz || 2006 || DE 
 Good mentoring || 61% || Kravietz || 2006 || DE 
 The tasks contributed to learning || 88% || OPALA survey || 2010 || FI 
 Counselling / support during the traineeship was sufficient || 81% ||  OPALA survey || 2010 || FI 
 Compensation                                                                          
 Traineeship was paid || 40% || Eurobarometer || 2013 || EU-wide 
 Compensation covered living expenses || 18% || Eurobarometer || 2013 || EU-wide 
 Traineeship was paid || 51% || EYF Survey, p. 15 || 2011 || EU-wide 
 Compensation covered living expenses || 25% || EYF Survey, p. 15 || 2011 || EU-wide 
 Working conditions 
 Working conditions worse than that of employees' (except for pay) || 23% || Eurobarometer || 2013 || EU-wide 
 Feeling of being exploited || 61% || Fuchs / Ebert || 2008 || DE 
 Traineeship plans lacking / not followed / not useful || 62% || Briedis / Minks || 2005 || DE 
 General level of satisfaction ||   ||   ||   ||   
 Trainees completely satisfied with their internship || 25% || Internocracy || 2010 || UK 
 Traineeships felt to be poor quality || 30-40% || Traineeship study, p.831 || 2012 || UK 
 Comparison mandatory vs. open-market traineeships 
 VET students satisfied/very satisfied || 88% || Traineeship study, p.151 || 2012 || AT 
 University applied sciences graduates "at least satisfied" || 80% || Traineeship study, p.151 || 2012 || AT 
 General University graduates "at least satisfied" || 70% || Traineeship study, p.151 || 2012 || AT 
 Young graduates "at least satisfied" || 52% || Traineeship study, p.151 || 2012 || AT 
Source:
compiled by Commission services; see References section for details.
4.4.        Problem drivers
There are several causes
for the existence of the ascertained high share of substandard traineeships. These
relate both to the supply side and to the demand side. We examine them in turn.
Finally, we discuss why the market fails to address the problem.
Problem drivers acting
on the supply side
On the supply side, two
different situations may arise: the traineeship provider may offer substandard
traineeships because it does not know how to ensure quality (unintentional
low quality) or, alternatively, the supply of substandard traineeships may
be intentional and due to a conscious profit maximization strategy. The problem
drivers differ depending on the case.
Causes of unintentional provision of substandard traineeships
It is important to note
that, apart from a certain share of highly regulated traineeships, there are
currently no quality standards or guidelines in general or common use and traineeship
providers are typically not required to follow or implement any.
Some organisations may be
well intentioned to offer a quality traineeship but simply be unaware of the
requirements for a traineeship to be a successful learning experience. The
Traineeship study has underlined that successful traineeships are usually
characterised by a definition of learning objectives, a clear plan of how to
attain them, and the availability of good mentoring. 
A share of traineeship
providers is likely to be unaware of these needs.  The SME test results show
consistently that many SMEs do not include the quality elements identified by
the Traineeship study, yet a strong majority of them declare that they would
not find it problematic to implement them. This refers for instance to elements
such as signing a written traineeship agreement (71.8% ensure while 95% have
nothing against) or to provide mentoring (60.7% against 93%) or a letter of
reference (50% against 95.2%).
It is impossible to
measure exactly the share of unintentional substandard traineeships, but
on the basis of the SME test results, we might quantify it tentatively at
between 20% and 35% of those traineeships that are insufficient in learning
content[20]
[21].

Causes of intentional provision of substandard traineeships
As underlined by Todini
(2013), Langille (2012) and many others, traineeship providers often have a
financial incentive to utilise traineeships improperly to carry out at a lower
cost tasks that should be executed by regular paid employees. This incentive
appears particularly strong considering the high share of trainees that do not
receive any compensation at all; the high availability of trainees allows
certain tasks to be carried out at almost no cost on a permanent basis.  
Not surprisingly, to
prevent this misuse of traineeship and the attendant distortions, many
countries have legislation prohibiting the use of trainees to replace permanent
employees. As mentioned in section 2.2, however, this prohibition is however
very difficult to enforce owing to the difficulty of testing it, the scarce
resources of labour inspection offices, and the lack of incentives both for
trainees to put forward complaints and for labour inspection to enforce
aggressively (see, amongst others Todoli (2013) for a documentation of several
cases in which trainees were used to replace employees).
Problem drivers acting
on the demand side 
Given the limited interest
in entering a substandard traineeship, and the fact that they are typically
unpaid, the main reason that candidates apply for them is lack of transparency
(information asymmetry). It seems safe to assume that trainees would
normally avoid substandard traineeships in favour of good quality ones, which
offer a much better payoff in terms of chances for employment. 
However, the quality of
the traineeship is difficult to assess before it starts, and when the
traineeship is started, the trainee has neither the possibility nor the
incentive to complain. If trainees hope to be hired later or fear blacklisting,
they will be very reluctant to lodge complaints or litigate. Even in the USA,
where the institution of ‘punitive damages’ and the right to minimum wages can
constitute powerful incentives to legal action, litigation is very rare and
until now has not proven a deterrent for abuse (see Curiale 2010).
As a result, it is easy
for a traineeship provider to under deliver on the quality of the traineeship,
i.e. on the learning content or on the general conditions of work or on both,
creating a market failure. 
Asymmetric
information and lack of incentives for complaints create room for market
failure
It
is the combined effect of asymmetric information and the lack of incentives for
trainees to put forward complaints[22]
that prevent the market from pricing and discouraging substandard traineeships.
For reasons explained in detail in annex 0, asymmetric information is a much
bigger problem in traineeships than in regular employment contracts. Thus, the
traineeships market is characterised by a long-term equilibrium in which a
majority of quality providers of traineeships coexist with a 20% -25% share of
substandard traineeships providers. 
One may consider the
question whether young people would apply for a substandard traineeship if they
knew about it before starting. This appears unlikely given the modest payoff
from a substandard traineeship and the fact that the majority of traineeships
are good quality – meaning that finding a good traineeship is not an impossible
task. The main reason therefore appears to be quite simply lack of information
on their trainee's part on what they can concretely expect from that
traineeship (see Box 3). 
Finally, one should
mention that the current deep recession aggravates the above problems leading
to a further decline in traineeship quality. The impact of the labour market
situation on the traineeship market is outlined in Section 9.1.
Box 3 A low learning
content traineeship
 A traineeship experience abroad is important, but in my case it’s been a wasted opportunity” says G.C., who did a traineeship as a fourth year law student. “I applied for a five-month traineeship organised by my university at a law firm in London, in the department for international property purchases. There were almost exclusively lawyers from my country there. My role was essentially making photocopies. My working time was the same as for the colleagues, I tried to be proactive but de facto I just did secretarial work like handling email and archiving documents. I was not the only one in that situation; in the firm there were other two boys whose judgement was equally negative. My impression was that they were just looking for people to put to work for free; they were continuously looking for trainees, certainly not with training purposes. Source: abridged from Repubblica degli Stagisti, E. Della Ratta, 8 March 2010 
5.           Legal basis and
subsidiarity
Legal basis
Currently there
is no European legislation specifically directed at traineeships. The legal bases for this initiative are Articles 153, 166 and 292
TFEU. According to Article 292 TFEU, the Council can adopt recommendations on
the basis of a Commission proposal in the areas of EU competence. 
According to Article 153
TFEU, the Union shall support and complement Member States' activities in the
field of, inter alia, working conditions, social security and social protection
of workers, and also the integration of persons excluded from the labour market
and the combating of social exclusion. 
In this respect it should
be noted that the definition of workers is wider than that of employees and is
usually interpreted extensively. Furthermore, under current conditions a large
proportion of trainees may be considered to be at risk of exclusion from the
labour market. This article therefore applies to traineeships. This is
corroborated by the circumstance that Occupational Safety and Health
legislation considers trainees and apprentices as covered by the scope of the
Directives based on the framework Directive of 1989[23], whose basis is Art 153 TFEU.
Since Article 153 TFEU
applies only to workers and, therefore, only to traineeships which are
remunerated, Article 166 TFEU is added as additional legal basis. According to
Article 166 TFEU, the Union shall implement a vocational training policy which
shall support and supplement the action of the Member States, while fully
respecting the responsibility of the Member States for the content and
organisation of vocational training. Depending on whether the traineeship is
remunerated or not, Article 153 or 166 TFEU apply respectively to ensure equal
treatment.
The provisions of Article
153 TFEU do not apply to pay, by virtue of Article 153 para. 5 TFEU. However,
the latter provision does not stand in the way of addressing problems regarding
transparency of pay, by recommending that the written traineeship agreement
clarifies whether or not remuneration would be applicable.
Subsidiarity 
In the case of
traineeships, the differences between national labour market institutions do
not seem to play a major role, as the nature of the complaints and concerns is
very similar everywhere, and quality problems in traineeships are frequent even
in the Member States with a more favourable labour market situation. The
Traineeship study found that only in five Member States was there no presence
of questionable practices (see Annex 12.1 and the Traineeship study, p. 94). 
An EU-wide solution
presents several advantages: 
1)      The quality guidelines adopted or proposed by different bodies in
different countries look quite similar. Differences reflect mainly remuneration
and the presence of certain compulsory or binding elements, such as limitations
of successive traineeships, which are usually absent from voluntary charters
(see Table 5). This suggests
that there is no great need for adaptation of quality standards to local
conditions.
2)      Secondly, an EU wide-solution would have benefits in terms of
trainees’ mobility. Young people would find it easier to accept a traineeship
in another country if the existence of standard practices or rules gave them a
clear understanding of what they can expect. 
3)     
Thirdly, experience shows that, owing to
coordination problems, the definition of internationally accepted quality
standards can be faster if supranational institutions adopt a coordinating and
supporting role. 
Member States could
independently adopt measures to improve the quality of traineeships, in
practice, however, they have repeatedly called upon the Commission to adopt a
QFT (see among others the Conclusions of three recent
European Councils: December 2012, February 2013 and June 2013). 
The reason why the European
Council has repeatedly asked for the Commission to put forward a proposal for
the QFT seems likely to be linked to the current fragmentation of regulation
and the absence of quality criteria in general use, which can be taken ‘off the
shelf’. Given the situation of diverging regulatory frameworks, it helps to
have a common understanding of what a traineeship is and of its minimum
standards. In addition, several Member States do not have a long experience in
regulating traineeships: as demonstrated by the Traineeship study, in many
cases they are still largely unregulated. Therefore, a QFT can help shape
Member States’ policies and regulatory approaches. In this way, the EU could
concretely support Member States in implementing the Europe 2020 employment
guideline nr 8, in particular ‘enacting schemes to young people and in
particular those not in employment, education or training find initial
employment, job experience or further education and training opportunities,
including apprenticeships, and should intervene rapidly when young people
become unemployed.’. 
A Europe-wide QFT would
also help address the low number of transnational traineeships. It would help address
one key obstacle for cross border mobility, lack of information, in an area of
great regulatory fragmentation, and the Recommendation would help to underpin
the support provided by ERASMUS+.
Finally, the QFT is
essential for the extension of EURES to traineeships, as requested by the
European Council conclusions of 28/29 June 2012[24]. EURES
should support trainee mobility through quality traineeships. Substandard
traineeships will not help smooth education to work transitions.
Similarly, quality
requirements for traineeships are needed to ensure the effectiveness of
traineeships offered in the context of the Youth Guarantee (see Council
Recommendation of 22 April 2013). The Council
Recommendation refers to a 'good quality' offer
of traineeships – therefore a QFT can be an important reference point for ensuring this.
6.           Policy Objectives
The general objectives
of an initiative in this domain are the following: 
 (1) Improve the quality
of traineeships, in order to increase the contribution of traineeships to
successful education-to-work transitions
 (2) Reduce mismatches in
the European labour market by promoting the development of transnational
traineeships
In order to meet these
general objectives, the following specific objectives have been chosen:
(1)                   
 Increase the share of quality traineeships;
(2)                   
 Discourage abusive practices while keeping the
compliance costs for  traineeship providers (TPs) limited;
(3)                   
 Enhance information on and facilitate access to
transnational traineeships. 
The operational
objectives are: 
 (1) Provide a framework /
standards / guidelines that Member States, Social Partners, TPs or other
entities can use as a reference for actions to foster the development of
quality traineeships and facilitate trans-national traineeships;
 (2) Ensure the effective
take-up of this framework / these standards or guidelines in EU policy
instruments, the European Semester process, the Youth Employment Initiative
(YEI), and other EU financial programmes. 
7.           Policy
coherence and contribution to Europe 2020 objectives
In 2010 the Europe 2020
flagship initiative 'Youth on the Move' announced that the Commission would
propose a quality framework for traineeships including the transnational
dimension, the role of the social partners and corporate social responsibility
aspects. 
In light of the further
deterioration of youth access to the labour market, the Commission launched the
’Youth Opportunities Initiative’ in December 2011. The Youth Opportunities
Initiative also confirmed earlier commitments to present a quality framework
for traineeships in 2012. Traineeships were included in the 2012 Employment
Package; quality traineeships are also an integral part of the Youth Guarantee
concept and therefore their development is a prominent objective of the 2013
Youth Employment Initiative. 
Within the 2013 European
Semester, 16 Member States were addressed a Country Specific Recommendation
(CSR) on "enhancing access to lifelong learning, upgrading the skills and
competences of the workforce and increasing the labour market relevance of
education and training systems, VET". Typically, the CSR recommend
increasing the availability of work-based learning, whether apprenticeships or
work placements in companies. Guidelines on traineeships appear particularly
useful for countries with little experience or tradition of working in
partnership with business. A QFT would help the Commission to monitor progress
on the above recommendations and suggest further action to MS where needed.
Actions to improve
traineeship quality also relate to the recognition of qualifications, and in
particular cross-border ones. This is of particular importance for the
regulated professions but might concern other professions as well[25].

Developing a QFT also
contributes to the Commission's endeavour to lift obstacles to the full
enjoyment by citizens of their EU rights, and notably their right to free
movement. 
Finally, a QFT can allow
the Commission to work together with the Member States towards the inclusion of
traineeships in EURES, as requested by the European Council conclusions of
28/29 June 2012[26].
8.           Policy options
The peculiar challenge in
regulating traineeships is the difficulty of enforcing legislation, as
highlighted most clearly by the examples of the United States, where, despite
the existence of restrictive rules, internships often suffer from abuse (see
section 0). In the EU, literature puts forward a similar experience in
Spain (see Todoli, 2013).The existence of abuse in an environment with
generally effective institutions and law enforcement depends on the general
unwillingness by interns to launch complaints against employers. Hence,
strategies based mainly on repression do not appear effective in this context. Therefore, the policy approach
followed here is not to attempt stimulating ex-post complaints by
dissatisfied trainees; rather, the objective is to increase the transparency of
the traineeship market ex ante, so as to address the key problem
drivers, i.e. lack of information and/or asymmetric information. This will make
it easier for traineeship candidates to screen the offered quality before they
make a commitment with a traineeship provider. 
Four options that are in
line with this approach have been identified and are listed in Table 4 alongside
the ‘no change’ or ‘baseline’ option 0. Their expected impacts and the
possibility and usefulness of combining them will be assessed in Section 9.
Given lack of data, the analysis of impacts is largely qualitative.
Table 4 Overview of Options
 Option number || Name || Type || Short description 
 0 || Baseline || - || No policy change 
 1 || Information Website || Information || Creation of an information website for trainees with all regulations and types of traineeships per MS 
 2 || Voluntary Quality Label || Information || Quality label for traineeships on a completely voluntary basis 
 3a || Council Recommendation on a Quality Framework for Traineeships ‘basic’ (QFT 'basic') || Guideline || A Traineeship Agreement would have to be signed between the trainee and the TP. The agreement would have to include information on objectives, learning content and monitoring, duration, remuneration or cost compensation, and social security coverage. 
 3b || Council Recommendation on a QFT with enhanced transparency (QFT + Transparency) || Guideline || The same as 3a + Information on pay/ compensation in vacancy notice + transparency requirements on hiring policy for unpaid traineeships 
 4 || Directive on a QFT + enhanced transparency || Regulation || The same as 3b but in the form of a Directive 
Option 1: information
website
Option 1 consists of the
creation of an information website containing complete, detailed and regularly
updated information on the rules and regulations applicable to all types of
traineeships, in each Member State. The website, which could possibly set up within the EURES portal, would include links
to the relevant authorities in Member States.
Rationale
This option mainly
addresses one problem on the supply side, that is to say unintentional
provision of substandard traineeships. It also addresses one factor
facilitating abuse, i.e. lack of information on the part of trainees of about
their rights, and could also help organisations unsure about the rules
applicable onto traineeships, particularly if they have never offered a
traineeship position. 
In addition, this option
could facilitate demand for transnational traineeship positions. A properly
designed, user-friendly website would allow easier access to general
information on national legislation of for traineeships. This should have a
positive effect on increasing the availability of candidates for transnational
traineeships. Over time, greater availability of candidates could stimulate
also an increase in interest by TPs particularly those facing, for whatever
reason, difficulty in attracting domestic applicants for certain vacancies, and
therefore have a moderate positive impact on supply.
Option 2: voluntary
quality label
Option 2 consists of
setting up at EU level a Quality Label to certify adherence to certain quality
standards on the part of TP that voluntarily apply for it. This option could be
implemented in various ways, either in a fully decentralised manner (by country
or even by sector) as has happened in the relatively few existing examples (eg
in the UK Code of Best Practices or in Italy’s OK stage by Repubblica degli
Stagisti). 
The criteria for the award
of the quality label could vary quite substantially by country or sector;
alternatively, one may seek to define similar or even identical criteria for
the entire EU. Defining common – or very similar – criteria would be better for
fostering transnational traineeships; on the other hand, allowing criteria to
differ significantly between countries or sectors would allow adapting the
standards to local conditions. 
The quality principles
could be elaborated by relevant national authorities in cooperation with social
partners, specifying minimum standards for the format, learning content, and
working conditions of the traineeship, taking as a starting point the recommendations
of the Traineeship Study (see Box 4). The quality label could also include
commitments on remuneration and social security coverage. By voluntarily
committing to respect the principles, TPs could publicise themselves as ‘fair
to trainees’ or similar. To strengthen the reputational benefit for TPs, the
label should be advertised and managed by a body or stakeholder entity
guaranteeing impartiality. This option would mainly address the problem of
unintentional supply of substandard traineeships. 
Option 3: Council
Recommendation on a Quality Framework for Traineeships
This measure would consist
in a Commission proposal for a Council Recommendation on a Quality Framework
for Traineeships (QFT) to be transposed by Member States in national practice
and/or the national legal system. The Recommendation would ask Member States to
ensure that a written and signed Traineeship Agreement is made compulsory,
which is currently not the case in many Member States. The Agreement should
include a series of elements that have been shown to increase the quality of
the traineeship experience.
Two sub-options are
proposed: in option 3a, the Council Recommendation would only consist of
quality guidelines to be included in the Traineeship Agreement (listed in Box
4). In option 3b, the content of the QFT is strengthened by including
additional transparency requirements that allow young people applying for
traineeships to make a more informed choice.
Option 4: Directive on
a Quality Framework for Traineeships
Content-wise, this option
would be the same as Option 3b, i.e. presentation by the Commission of a
proposal for a Quality Framework for Traineeships with transparency
requirements, but in contrast to option 3b, the proposal of the Commission
would take the form of a Directive based on Article 153 2(b) TFEU. So the only
difference between Option 3b and 4 is the choice of the instrument.
The choice of a Directive
as a legal instrument implies that Member States, once it is approved and
enters into force, must transpose it into their legal system because it is,
unlike a Recommendation, a binding instrument. This has important implications
in terms of proportionality and the subsidiarity issue. 
9.           Analysis
of impacts
We assess the
options on the basis of whether they can create disincentives to targeting
intentional substandard providers, while not creating any obstacles to quality
providers. This can be done by addressing the different motives of quality and
substandard traineeships providers. The analysis is mostly qualitative due to
the limited availability of data and the lack of models allowing this type of
simulation.
The
text on each policy option as well as the overview tables in the annex explain
in details the expected impact on supply and demand for both quality and
substandard traineeships and concludes on the effectiveness of each option. 
9.1.        Option 0 – Baseline
Foreseeable business
cycle impact on traineeships
The supply of traineeship
positions depends on broadly similar factors as vacancies for regular jobs. If
firms anticipate greater demands for their production in the coming quarters,
they may start considering the needs to hire new personnel, and this will
stimulate the offer of those traineeship positions that are preliminary lead to
a hiring.  Thus it is likely that the share of quality traineeships (as these
are typically linked to hiring) increases in an upturn and decreases in a
downturn. Given the typical labour market lags and the worsened employment outlook,
the share of quality traineeships is likely to decline in the coming quarters. 
TPs also offer traineeship
positions due to the replacement motive.  Given their lower cost, if
they face a pressure to cut costs, enterprises may attempt to replace regular
workers with trainees. This factor too seems likely to intensify in the coming
quarters. Moreover, other workers and trade unions may be more willing to
tolerate this behaviour by TPs/ businesses if the survival of the firm is at
stake. 
The issue can be framed in
economic terms by discussing whether trainees are, on average, complements
of or substitutes for of regular workers. If they are substitutes, a
higher number of trainees will be associated with a lower number of regular
workers. If they are complements, a higher number of trainees will instead be
associated with a higher number of regular workers. As the number of regular
workers is driven down by the crisis, in the substitution case the number of
traineeship positions would tend to increase with the crisis, while in
the second case their number would fall as the labour market situation
worsens. 
In the absence of
econometric studies that measure the degree of substitutability of trainees
with regular workers it seems reasonable to assume that substitutability of
senior, highly experienced personnel dealing with technically complex issues
with trainees is limited. Conversely, trainees may more easily be substitutes
for simpler or routine tasks. Overall it seems likely that the sharpening of the
crisis leads to greater substitution effects; this should boost the number of
traineeships in the short run. 
Overall, there is no
reason to believe that the quality problems discussed above would become less
frequent in the future as a result of developments in the economy. As mentioned
in Annex 12.6, economic incentives are such that the current equilibrium with a
high share of substandard traineeships is likely to be sustained in the absence
of policy action, with the crisis likely to increase the share of substandard
traineeships. 
Foreseeable impact of
institutional developments on traineeships
Other sections of the
Impact Assessment have illustrated recent institutional developments. Although
concerns about abuse of open-market traineeships are widespread, this has
prompted policy action only in a limited number Member States (France, Italy
and Spain represents the main examples). In general, the modifications put
forward or envisaged by these countries go in the direction of increasing
protection of trainees, e.g. by mandating payment (traineeship guidelines
approved by Italy) or by restricting the ability of traineeship provider to
offer traineeships on the open market (France). However, the content of these
policy actions does not take into account the international dimension of
traineeships[27].
One can speculate that
owing to increasing demands by public opinion, certain Member States might
introduce regulation, and social partners might adopt quality charters at
national or sectorial level; these however would not be coordinated, reflecting
also the lack of universally accepted quality standards, and therefore would
retain the fragmented nature of the current landscape, with its negative
effects on trainee mobility. 
Another possibility is
that given increasing public concern about trainee exploitation, there might be
a greater trend towards adoption of voluntary quality charters by TPs. This is
however unlikely to change the situation perceptibly, mainly due to the fact
that mostly those TPs will adapt to such voluntary charters that offer quality
traineeships anyway (see section 0 for an analysis). 
Overall, looking at
developments on the ground, there seems to be limited movement towards
spontaneous development of global or EU-wide quality standards. While it is
possible that there are further national or international initiatives,
experience shows that these are scarce and – especially voluntary ones –
ineffective (see the low take-up rate of the Italian OK stage label: an order
of magnitude of about1 to 10 000). While the European Quality Charter on
Internships and Apprenticeships could be considered as a relevant international
initiative, as an NGO initiative and with only limited support from employers,
it is currently applied by few businesses only on a completely voluntary basis.
Furthermore, the Charter itself in its Preamble urges EU institutions to ’commit
to establish legal quality frameworks for internships and apprenticeships’.

In addition, the repeated
calls by the European Council for action at EU level have created the
expectation of a forthcoming EU initiative, making it even more unlikely that
Member States or lower government levels, spontaneously develop or launch new
initiatives. As for social partner action, the decision not to negotiate an
autonomous agreement at EU level also indicates a low likelihood of spontaneous
action.  
Therefore we can assume
that in the lack of a widely accepted European initiative the overall share of
substandard traineeships will further increase owing to the effects of the
crisis or at best stay constant. Furthermore, one of the key outcomes of the
stakeholder consultations was the wide support towards a QFT – even business
organisations acknowledged the need for action in this field.
Overall we may conclude
that in the absence of policy action labour market developments would likely
lead to a worsening of the situation for trainees and that institutional
development at MS level, given the track record so far, are unlikely to result
in the problems of traineeships being addressed soon.
9.2.        Option
1 – Information website
Impact
on supply of traineeship positions
As
already described in the previous section, option 1 consists of the creation of
an information website containing complete, detailed and regularly updated
information on the rules and regulations applicable to all types of
traineeships, in each Member State. This option would not increase costs for TPs
– it might even reduce them marginally to the extent that they, too could more
easily access information about this topic. However, organisations that
intentionally offer substandard traineeships to profit from cheap labour are
likely to continue to follow their strategy so long as they find willing
candidates: the experience of countries with rigid traineeship regulations
suggests that greater rights awareness is not going to stimulate complaints by
trainees. As for quality traineeships, there is no reason to expect any impact
on their supply. 
Impact on demand for
traineeship positions
Similar considerations
lead to suggest that the effect on demand for traineeship positions by young
people would be negligible, at least in a domestic context. In the majority of
cases young people will already have access to domestic information resources
to clarify the applicable rules. The complexity of the rules applying to
traineeships may mean that in some cases a new, well-designed information
resource fills a gap, but this is unlikely to play a major role, except for
transnational traineeships, where the role of informal networks is smaller and
there may be linguistic or other barriers. 
Costs
The website could be set
up by and run centrally for the entire EU by the European Commission or another
organisation, to ensure a similar content and layout for each MS, or could be
managed by a network. While there is no compliance cost
for Member States or TPs, there would be some budgetary implications for the
organisation running the website (possibly the European Commission). However,
an information website could be implemented at a cost presumably below € 1
million per year. 
Overall assessment of
effectiveness
This tool partly addresses
the quality problems through providing better information, i.e. the lack of
general information on standards, but does not provide any information on the
quality of specific traineeship positions on offer. Hence, the impact of this
option on traineeship quality is positive but modest, as greater awareness of
rights has been proven to be of limited effectiveness on domestic traineeships.
As regards specifically the problem of insufficient learning content, no real
effect or perhaps a slight positive effect is to be expected.  Similarly, a
slightly positive impact on bad working conditions might be achieved.  It might
have a stronger impact on stimulating transnational traineeships, owing to the
greater difficulty of finding information for foreign countries. Overall, this
seems to be a measure that can usefully complement other solutions, given also
its low cost; but is not effective enough as a stand-alone option.
This option thus
represents no real effectiveness for domestic traineeships but a likely
positive effect on transnational traineeships.  It should help the development
of transnational traineeships but is unlikely to change the balance between
substandard and quality traineeships.          In terms of efficiency, this can
only be seen as a partial solution, but given its low cost, it could be a
useful complement to other options.  It is a fully coherent option.
Further details are provided
in table 9 in Annex 12.13. 
9.3.        Option
2 – Voluntary Quality Label
Impact on supply of substandard and quality traineeship positions
The weak point of this
option is that by definition it has no impact on the supply of intentional
substandard traineeships as TPs/businesses offering them will obviously not
apply for the label. Only if the label – as part of a certification process -
eventually becomes a prerequisite for public financial support to traineeship
programmes, such as the ESF, may it serve as an incentive to upgrade
substandard traineeships, thus increasing the supply of quality traineeships.
TPs offering quality
traineeships should not suffer any meaningful compliance costs as they will
already be applying the principles of the Quality Charter. On the contrary, the
Quality label provides a reputational advantage. For this reason, this option
is likely to have, if anything, a positive impact on the supply of quality
traineeships. The significance of this however depends crucially on the conditions
of the labour market, as the payoff to participating companies is significant
mainly when it is not so easy to attract candidates for traineeships, which is
far from the current situation.
The size of the impact
will obviously crucially depend on the take-up rate by TPs.
Impact on demand for
traineeship positions
Introducing a quality
label where it does not exist is equivalent to segmenting the market. Market
segmentation generally increases overall demand (and would obviously decrease
demand for substandard traineeships). However, for this to happen, segmentation
must be effective, i.e., there should be a reasonable availability of
traineeship positions with the label. It is doubtful that this would be the
case (see overall assessment of effectiveness below). The measure
therefore would increase the availability of candidates for those companies
offering a voluntary quality label but not overall given the expected limited
take-up rate.  
Costs
To minimise costs,
compliance by the TPs to the principles of the Charter would not be monitored
systematically, but ways would need to be found, either at EU or at individual
Member State level, to handle complaints by trainees about companies not
following the code/guidelines. Under this approach, the quality label could be
attributed to all organisations that would commit to it without advance
inspection or screening. A certain number of duly justified complaints could
lead to the withdrawal of the label. Such a light organisation would allow the
label to be managed by the companies concerned, or by a small external office. 
Overall assessment of
effectiveness
Overall, this
non-regulatory approach has the merit of encouraging and guiding TPs by
providing a reference for quality standards while its voluntary nature ensures
that it is bearable for TPs. The strength of this option lies in the advantages
of a voluntary/soft-law solution, i.e. flexibility and lighter-touch
regulation, which minimizes the risk of imposing undue compliance costs to TPs.
It goes some way into providing a positive incentive for adoption, given that
one of the motives for organisations to offer traineeships is improving their
reputation, which could be enhanced by a quality label. The voluntary nature of
the commitment ensures that the compliance burden for TPs would remain
acceptable[28]. This option might also stimulate cross-border traineeships. 
However, a soft-law
solution is typically well suited to cases in which the market is receptive to
the need for regulation, or there are advantages to all participants from
standard-setting, but the setting of standards itself is either highly
technical,  or needs to evolve rapidly or needs to be extensively tailored.
None of this seems to apply to traineeships. Furthermore, the option suffers
from a fundamental weakness, its limited or nil disincentive effect for
substandard traineeships. In terms of the problems of insufficient learning
content, only a slight positive impact can be expected. The bad working
conditions to be found in intentional substandard traineeships are not expected
to be affected.
Overall, the main
disadvantage of this option is the risk that few organisations bother to apply
for the label. The take-up rate for existing examples of quality labels is
currently extremely low: in Italy, a few dozen companies have applied for the
OK stage label, a take-up rate in the order of magnitude of 1 in 10.000. The
situation does not seem to differ elsewhere. Hence this option appears
ineffective.
It could be argued that
this option would be effective to some extent in fostering the
development of transnational traineeships but it is unlikely to change the
balance between substandard and quality traineeships.  In terms of efficiency
this is only a partial solution as the impact is so dependent on the take-up
rate, and very little impact is expected on intentional substandard TPs/businesses. 
The coherence of the option is potentially endangered by the potential
for differences amongst labels which could create inconsistency and obstacles
to mobility.
Further details are
provided in table 10 in Annex 12.13.
9.4.        Option 3 – ‘Council Recommendation on a Quality
Framework for Traineeships 
Implementation
The Council Recommendation
could be adopted on the basis of Articles 153 and 166 TFEU in conjunction with
Article 292 TFEU. The Council recommendation would invite all Member States to
introduce the policy option chosen in their legislation within a certain
deadline; the usual employment policy coordination mechanisms and structures
would then monitor implementation and compliance. Given the fact that several
Member States have received Country-Specific Recommendations (CSRs) on youth
employment issues, the European Semester coordination mechanisms could also be
utilised in this context to monitor progress. Furthermore, the implementation
and monitoring of Youth Guarantee schemes also provide a natural opportunity
for the implementation of a recommendation on a QFT; in the medium term, one
objective could also be to link public funding of traineeships to those that
satisfy the requirements of the QFT. 
The description of the
content, rationale, impact and overall assessment is given separately in the
following for each of the two sub-options 3a and 3b. The advantage of
implementation through a Council Recommendation is that it offers the prospect
of a faster adoption. However, by its nature implementation of the
Recommendation by Member States may be different and could be delayed
considerably in certain Member States; depending on the rate of adoption, this
could undermine considerably the achievement of the objective of providing a
common framework for the EU, which is in turn essential to address low
international mobility of trainees. 
Given the choice of a
Council recommendation, practical implementation and enforcement of both
options would be up to the Member States. Nevertheless, the following sections
contain some comments on the implementation challenges most likely to be met,
on the basis of international experience.
9.4.1.     Option 3a – Council Recommendation on a Quality Framework
for Traineeships 'basic'
Description

This sub-option would
require signature by both parties of a written Traineeship Agreements. The
quality elements to be included in it would be those identified by the
Traineeship Study (p 127 section 9.4), listed in Box 4. They comprise straightforward
requirements such as explicit identification of a mentor, of the main learning
objectives, and basic elements of the working conditions such as duration, the
indication of what compensation, if any, is granted, etc. 
These requirements are
based on the analysis of the Traineeship study, which found that adoption of a
small number of key elements resulted in better quality traineeships. The Traineeship
study further found that these elements were spontaneously adopted by the best traineeship
providers. However a series of factors, including the availability of
candidates for traineeships, but also lack of guidance to help traineeship
providers to spontaneously develop and adopt better approaches to traineeships
in a situation where few guidelines exist, was slowing the spread of good
practices.  
The elements chosen
represent a middle-of-the ground approach compared to those that have been put
forward in a series of recent initiatives (see Table 5) by different types of bodies.
Several of the elements contained in the Commission proposal for a QFT were tested
in the econometric analysis in annex 0 and found to have a significant positive
link with employment outcomes.
The QFT put forward in
this proposal includes a limit on the duration of the traineeship. This is
meant to limit distortions to the labour market, particularly in terms of the
risk of substituting regular jobs with traineeships. As shown in Table 5, this
clause is present in almost all examples of quality frameworks and is typically
an element in legislation on traineeships. This is in line with the
Eurobarometer result that 85% of traineeships last less than 6 month.
Table 5 Comparison between the quality elements
under QFT option 3a and a number of recent initiatives 
 GUIDELINE NAME Issuing Organisation         CRITERIA                      || Loi Cherpion (FR)       Government || European Youth Forum Charter (EU)   Youth Organisation || Carta dei diritti dello stagista(OK Stage) (IT)   Trainee Organisation || EU QFT Project (EU)     EU || Common best practice code for -quality traineeships internships (UK)   60 Professional bodies || Charte des stages de l'enseignement supérieur (FR)   National Employer's Organisation (MEDEF) 
 No open-market traineeships || X ||   ||   ||   ||   || X 
 Mandatory written agreement || X || X ||   || X || X || X 
 Learning quality content ||   || X || X || X || X || X 
 Personal mentor ||   || X || X || X || X || X 
 Proper material and space for working ||   ||   || X ||   ||   ||   
 Limitation of the duration || X || X[29] || X || X || X ||   
 Limitation of successive traineeships || X || X[30] || X ||   ||   ||   
 Limitation of the number of trainees per entity ||   || X || X ||   ||   ||   
 Information about the remuneration/compensation || X || X || X || X || X || X 
 Minimum remuneration/compensation || X || X || X ||   ||   ||   
 Information about social insurance ||   || X ||   || X ||   ||   
 Same rights as employees regarding social and cultural activities || X ||   ||   ||   ||   ||   
Possible
variations
A
possible variation of this option could be constituted by nominating an
ombudsman at national or European level. The ombudsman would intervene on
complaints filed against TPs that do not comply with the QFT. This might
increase pressure on low-quality traineeships. The impact is difficult to
assess, as it would depend on the stringency of the national legal framework,
on the effectiveness and costs of the legal system, on the share of
non-intentional substandard suppliers and probably also on administrative and
corporate culture. 
Rationale
The Traineeship Study has
found that the fact of having to fill a written Traineeship Agreement
stimulated the adoption of best practices by focussing attention on them. The
introduction of a written traineeship agreement which lists the key quality
elements is especially helpful in the case of the unintentional providers
of substandard traineeships. 
The strength of this
approach is that the choice of the Council Recommendation instrument allows
strict respect of the proportionality principle: Member States that have
already introduced in their legislation a sufficient number of safeguards and
quality elements will not need to act. For example, the regulation of
traineeships in France or Italy currently goes beyond the quality elements
identified in the Commission study. Member States shall also be free to assess
whether it is opportune to go beyond the QFT proposed here to encompass also
the issue of minimum remuneration, which the QFT does not touch (largely
because of lack of EU legal competence in the area). The proposal for a Council
Recommendation will detail in the appropriate legal form the quality elements
listed in Box 4. 
The use of the Council
Recommendation with its inherent greater flexibility should not detract from
the need for several Member States to take urgent action. As highlighted in
Section 0, the current regulatory framework is patchy and fragmented, and in
many Member States there is even no need for a signed traineeship agreement.
Furthermore, Eurobarometer data show that substandard traineeships are common in
a large number of Member States. 
Data also show that
particular problematic aspects tend to be endemic in specific countries, which
also renders the use of a Council Recommendation more tailored. For example, a
basic requirement for a quality traineeship is the possibility to turn to a
mentor for assistance and help on how to do the job; but while data show that
this was almost never a problem in Lithuania, a very large share of trainees in
Spain (more than one in five) reported that they could not. Table 8 in Annex 12.11 indeed confirms that
low quality, while common even in countries with generally good training
systems and low youth unemployment, varies quite substantially in extent and in
the nature of the deficiencies reported.
A Council Recommendation
approach is also well suited to monitoring and following up progress on
traineeship quality in the European Semester. It is worth to recalling here
that a large number of countries were addressed Country Specific
Recommendations on youth issues; adopting the QFT guidelines on traineeships
would be a way of making progress on one aspect of the problems. 
Box 4 Key
quality elements identified in the Traineeships Study
 The Traineeship studied surveyed the situation in all EU27 Member States and for all types of traineeships with the aim of pinpointing best practices, starting from the principle that a good quality traineeship should enable the trainee to acquire practical skills geared to the labour market needs and complementary to the trainee’s theoretical studies in order to enhance the trainee's employability. A number of principles can be identified that characterise a good quality traineeship. A fundamental point is the presence of a mandatory traineeship agreement. A good quality traineeship should be based on an agreement between the trainee and the traineeship provider (i.e. company, public agency etc.).  In this respect it is worth noting that the Eurobarometer survey on traineeships of 2013 reports that only 62% of trainees have signed a written agreement[31]. The traineeship agreement should cover the following elements, identified by the study as the most important: •              Objectives, content and monitoring: Traineeships should enable the trainee to acquire practical skills complementary to his or her theoretical studies. The guidelines of the study require that the validity of the educational content is ensured by a personal supervisor or mentor assigned to each trainee by the traineeship provider. The supervisor has to guide the trainee through the assigned tasks, monitor progress, and explain general work processes and techniques. The guidelines also require that the supervisor provides an evaluation of the trainee’s performance in the form of a short final evaluation (of 1 to 2 pages), which may take the form of a letter of reference. •              Duration: Open-market traineeships should generally not last longer than 6 months (this duration, besides being recommended by the traineeship study, is also commonly taken up by Member States in their legislation, such as the most recent initiative on traineeships by the UK,). This recommendation however is not applicable to the mandatory post-graduation professional training of doctors, lawyers, teachers and the like, which exist in most Member States and tend to be both longer and highly regulated[32]. •              Working conditions: the agreements should specify working hours and rights to holidays as well as rules on sick leave; •              Remuneration/cost compensation: If there is a mutual benefit for both the traineeship provider and the trainee in terms of knowledge transfer and learning, unpaid traineeships may be appropriate. Hence, the quality guideline only stipulates that the written stage agreement specifies clearly what, if any, compensation or remuneration is offered. •              Social security provisions: Social insurance provisions applying to the trainee must be clear to all parties involved, in particular as concerns coverage from health insurance and from the insurance against workplace accidents. In most Member States, students are provided with social insurance by the state or their educational institution and are therefore insured against health risks and accidents during their traineeships. However, if the trainee is no longer a student the situation may not be so clear. If the traineeship is covered by an employment contract, employer and employee need to fulfill insurance obligations as stipulated by labour law in the respective country.  If this is not the case, the contractual arrangement should foresee insurance schemes to be paid by the traineeship provider or the trainee.   Source: Traineeship study, p127 
The impact of a Council
Recommendation option will depend on the number of Member States translating it
into their national legislation[33].
Nevertheless, the adoption of a Council recommendation may have a small effect
even in non-adopting countries;  there are at present no generally accepted
guidelines on traineeships, so the existence of an EU quality framework might
stimulate independent and voluntary adoption by TPs, social partners, public
authorities, NGOs.
Impact on supply of
traineeship positions
There are good grounds for
believing that the introduction of a QFT in the format envisaged would not
impact negatively on the supply of quality traineeships. While the existence of
a written contract has obvious benefits for both parties in terms of clarifying
duties and responsibilities on both sides, especially in the case of disputes,
the overall compliance costs of concluding a Traineeship Agreement are very
limited. Setting up the agreement should not
require more than a few hours and the work done could largely be recycled for
future trainees. Furthermore, the adoption of a QFT would result in the
preparation and diffusion of standard Traineeship Agreements which traineeship
providers could adopt off-the-shelf. 
In addition, in France,
the introduction of a mandatory written agreement in 2006 has not had any
negative impact on the number of traineeships, which increased from 600,000 to
1.6 million in 2012.Finally, the SME survey run by the European Commission in
March-June 2013 shows that out of 914 SMEs EU-wide only 5% would consider it
difficult to provide a written traineeship agreement – in spite of the fact
that currently only 72% of the SMEs do this as a usual practice[34]. 
As for the content of the
Agreement, in the same SME survey only 7% responded that ensuring mentoring and
evaluation would cause them difficulty (while 61% already now provide a mentor).
Only 10.7% indicate that it would be difficult for them to clearly define
learning objectives. 
Assuming that larger TPs
have even less difficulties, we conclude that the impact on costs for quality
traineeship is negligible and therefore will not lead to any reduction in their
supply. 
As for substandard-quality
traineeships, we should distinguish between ‘intentional’ and ‘non-intentional’
low quality. If low quality is due to lack of attention on the part of the traineeship
provider, and not to a conscious cost minimisation strategy, this option, by
providing a guideline for quality that is easy to follow, should lead to some
improvement as TPs adapt their work practices. If the low quality is due to a
conscious strategy, enforcement difficulties are likely to mean only a modest
decrease, in line with international experience, depending on how effective is
inspection is by Member States authorities[35].

On the basis of the SME
test results, we might tentatively quantify ‘unintentional substandard’ at
between 20% and 35% of all substandard traineeships[36]. Overall,
therefore, this option would lead to a limited decrease in substandard
traineeships, the majority of which would be transformed into good quality
ones.
Another risk to be
discussed is the fact that the obligation of a written traineeship agreement
leads especially smaller firms to fear litigation. In this respect, while in
the Commission proposal the QFT would be compulsory and would have legal value,
the risk for litigation appears negligible on account of the substantial
disincentives for trainees to bring legal action. Even in the US, with its
stringent legislation and much more favourable incentives for litigation given
minimum wage rules and the possibility of punitive damages, litigation is very
rare (see Curiale, Langille, and Todilo). 
Impact on demand of
traineeship positions
Demand for substandard
traineeship positions might drop slightly as trainees become aware of the
requirements for TPs and screen them for adoption of the QFT. The impact on
intentional substandard providers is however likely to be limited, as they
might adopt the QFT purely pro forma. 
Demand for quality
traineeship positions seems likely to remain broadly unchanged; there might be
a positive effect from quality suppliers advertising better their traineeship
by declaring compliance with QFT, but also a negative substitution effect from
substandard suppliers adopting the QFT pro-forma. A positive effect is likely
with regard to transnational traineeships however, as clarity over the
conditions of work is more important when mobility is concerned. 
Overall assessment of
effectiveness
In assessing the impacts
of this policy option, as well as of the following options 3b and 4, it is
important to stay clear of the fallacy that there is a fixed total number
of traineeships, and that any measure to reduce the incidence of substandard
traineeships implies that some young people will lose an opportunity, even if
not optimal, and will be reduced to staying at home (crowding out hypothesis).
This idea is wrong on three counts:
First of all, the
provision of reasonable and proportionate guidelines may well be welcomed by
businesses as a clarification, as highlighted by the responses in the SME test
and by the Microsoft case. Given that some substandard traineeships are
unintentional, as suggested by the SME test results, we expect that some
substandard traineeships will be transformed into quality ones.
Secondly, it is a standard
prediction of economic theory that clarification of market rules, greater
market transparency, and a reduction of asymmetric information, can lead to an
increase in both supply and demand as the market becomes more efficient and
capable of pricing quality (Akerlof effect). In France, notably, traineeships
increased after regulation was first introduced in 2006. 
Thirdly, the provisions of
the QFT do not aim at prohibiting the provision of any type of traineeship or
imposing heavy standards, but simply at allowing the trainee to make an informed
choice between available possibilities.
This option mainly
addresses the problem of unintentional provision of substandard traineeships.
While in theory its binding nature would also make it relevant for addressing
intentional provision, in practice enforcement difficulties render it
ineffective in that regard.
Theoretically, some
employers might refrain in the future from providing traineeship places,
because they realise that the traineeship places they offered so far were not
of good quality, or because they consider that certain elements of the quality
framework (e.g.specifying learning content, or ensuring effective mentorship)
would result in too high costs. Given the limited implementation costs,
however, this risk appears more theoretical than real, and may well be offset
by an increase of good quality traineeships (as clear conditions on what is
expected in terms of traineeship quality may encourage employers to improve
their offer, as noted in the Traineeship Study). A good example of this is
represented by the joint Microsoft/European Youth Forum initiative on
traineeships[37].
An important question
remains the effectiveness of this option concerning intentional
substandard traineeships, given that enforcement problems are to be expected
based on international experience. Furthermore, regulatory solutions are likely
to work least in Member States with weaker enforcement mechanisms, which may be
exactly those where there is most need. 
It can reasonably be
expected that the incidence of bad working conditions is modestly reduced by
this option, as it raises awareness of rights by trainees, even if enforcement
can be difficult. With regard to insufficient learning content, it is likely
that as this option should stimulate the spread of basic good practices, its
impact is positive.  Most likely is however a positive impact on intra-EU
trainee mobility: depending on the take-up of the QFT by Member States, this
option should address the extreme variety of regulation (including a complete
absence of regulation in some Member States) across the EU, reducing
information barriers to mobility.
Overall, a reasonable
improvement on the quality and transparency of traineeships could be expected
in the medium term from a quality framework endorsed at European and national
level. The QFT is a proportionate EU level action[38] that can
contribute to achieving the intended objectives of increasing the share of
quality traineeships, discouraging abusive practices while keeping the
compliance costs for TPs limited and facilitating access to transnational
traineeships through enhanced information. 
Further details are
provided in table 11 in Annex 12.13.
 Since the content of this option was presented to stakeholders within the public consultation of April-July 2012, information is available about how stakeholders viewed the proposed quality elements. As regards Member States, only a few have officially replied to the consultation. Most of them (FR, AT, CZ, CY, LV) could accept the proposed quality elements (AT suggested not limiting duration to 6 months); while NL did not reject them either, it expressed doubts in more general terms about the need for the initiative. All Member States agreed that a Council Recommendation (LV: non-binding guidelines) would be the best form for the initiative, while FR could also accept a binding legal instrument. We have to note however that FR would focus the initiative on traineeships during tertiary studies (open market traineeships are banned in France). Other stakeholders mostly agreed with the proposed quality elements; however businesses and employers' organisations in particular argued that remuneration and social protection issues may not fall under EU competence and in any case small businesses would have problems applying them. It has to be noted however that the 2012 public consultation document 'recommended' remuneration for post-graduate trainees and it also asked to ensure social protection coverage for unpaid traineeships. This QFT basic option only asks for clarifying these aspects in the contract, but they are not any more compulsory. 
9.4.2.     Option 3b – Council
Recommendation on a Quality Framework for Traineeships with enhanced
transparency
Description 
This option would add to
the QFT as spelled out above in option 3a some transparency requirements. Specifically,
notices advertising open traineeships positions – published in whatever form or
media – would have to indicate whether the traineeship is paid or not and, if
the traineeship is paid, the level of remuneration or compensation (or cost
reimbursement). 
Furthermore, TPs offering unpaid
traineeships would have to disclose, at the moment of the
conclusion of the Traineeship Agreement, information about their recruitment
policies; specifically, they would have to disclose the share of trainees that were
offered a paid work contract after the end of their traineeship[39].
Furthermore, and particularly in those Member States where unpaid traineeships
are not allowed, authorities may want to consider applying these provisions to
the lowest-paid traineeships, depending on the extent of the quality problems
existing in that segment. This information would not replace the
information on the learning content and working conditions, which will also be
given in the Traineeship Agreement, but would complement it giving the trainee
candidates a better information basis, helping them to make a better choice. 
Rationale
This option aims at
improving the functioning of the traineeships market through improving its
transparency. By coupling a QFT, which is effective at guiding traineeship
providers towards the adoption of best practices, with transparency elements
designed to allow the trainee candidate to better assess the quality of the
proposed traineeship before it starts, it addresses both unintentional and
intentional provision of substandard traineeships.
TPs at times lure
prospective candidates with attractive-sounding traineeships, but avoid
revealing information about the financial conditions until late in the
selection, when candidates have already made a substantial effort to get
selected and are in a weak psychological position to negotiate or refuse a
low-paying proposition. This is far from being an unusual practice: the
Eurobarometer survey found that this was actually the most frequent case (46%
vs 42% of cases in which compensation was clearly indicated – see answers to
Question 11.6). Greater transparency will limit the scope for this behaviour. 
The answers to Question
11.6 indicate clearly that this problem is not limited to specific countries:
in only two Member States the share of notices not including clear financial
information is lower than 20%, and lack of transparency is acute even in
countries with a relatively favourable labour market situation (e.g. in Germany
57% of respondents reported unclear information, more than double those who
felt clearly informed[40]).

The rationale for
disclosing how many trainees were hired after the traineeship stems from the
recognition that the economics of traineeships is different from regular
employment. Given that most traineeships are unpaid or paid very little, the
financial incentive is mainly constituted by the better prospect or chance of
being hired in the future (most likely by the same employer). However, as
mentioned earlier, the trainee is almost never in a position to assess the real
chances of being hired, while the employer has an incentive to present hiring
chances as higher than they really are. 
The result is an
equilibrium with lack of transparency. While trainees may know that chances of
being hired are low on average (e.g. in Italy Chamber of Commerce data
show the hiring rate is about 12%, while, for the EU as a whole, the
Eurobarometer indicates that 27% of trainees received a job offer after the end
of their traineeship), this information has little operational value for them
because what counts is hiring chances in their specific TP. This asymmetry of
information is the main avenue exploited by some TPs and constitutes the reason
why substandard traineeships may continue to be offered almost indefinitely.
Thus, this measure targets directly the main structural cause of low quality.
The usefulness of information on hiring policies followed by specific
organisations is illustrated by an example given by a trainee (see Box 6)
Box 5 The benefits
of transparency on hiring policies
 After my studies I was looking for a traineeship that would help me finding a job afterwards. At a certain point I heard about an organisation that I had not been particularly interested about it at the beginning of my search. Through acquaintances that had worked there, I found out that this organisation had in the past hired former trainees. That encouraged me and I applied for this traineeship, something that maybe I would not have done otherwise because I was thinking of other organisations. I indeed got a job offer at the end of my traineeship. I think it’s really useful for a trainee to know what are the hiring policies of the organisation” - Interview to M. G., former trainee, 2013 
To keep compliance costs
low the information to be disclosed by TPs should not go beyond the minimum (Table 6 shows the format this could take).
The information should refer only to hiring in the same location as that where
the traineeship took place, because this is the location that interests the
trainee most and also because it would be complicated for a TP with offices in
several locations to keep track.
Table 6
Information about hiring policy (data given as examples)
 Year || 2010 || 2011 || 2012 
 A - Number of trainees || 9 || 8 || 10 
 B -  Permanent employment contracts signed with former trainees || 2 || 0 || 0 
 C -  Number of former trainees doing remunerated work (temporary or freelance) for the organisation || 1 || 2 || 1 
 D Percent share: (B+C)/A (%) || 33% || 25% || 10% 
Impact on supply of
traineeship positions
In an era in which most
announcements are made on the internet, compliance costs related to the vacancy
notice are negligible. This is confirmed by the SME test, which shows that 89%
of SMEs have no problem with indicating the amount of pay/compensation in the
traineeship advertisement. Hence, there should be no impact on the supply of
quality traineeships from the vacancy notice requirement. 
The requirement on
transparency of hiring policies would not entail any significant additional
costs for TPs, apart from monitoring the number of former trainees recruited -
this will be, incidentally, even lighter for SMEs owing to their limited number
of employees[41].
However, organisations may
reason that a low D coefficient in the table above could make it more difficult
for them to attract candidates for traineeship positions in the future. This
will create an incentive to either hire more former trainees, or to switch from
unpaid to paid traineeships, given that the transparency requirement applies
only to unpaid ones[42].
In either case there will be an incentive to upgrade the quality of
traineeships. The incentives will be stronger for organisations with low hiring
ratios, i.e. those that, on average, are characterized by a lower quality
offer. This appears appropriate and desirable. 
The measure will tend to
discourage the supply of substandard traineeship by making it less easy to
attract candidates. In the case of intentional substandard traineeships, it
will be more difficult to attract candidates (and retain) candidates, because
the low or nil hiring ratio will be visible. Non-paid traineeships from
organisations with low hiring rations (i.e. the typical intentional substandard
offers) will be penalised on the market, unless they can demonstrate a strong
learning content. This will encourage switching away substandard traineeships,
either by strengthening the learning content, or by showing higher employment
ratios, or by offering paid instead of unpaid traineeships.
As for unintentional
substandard traineeships, the positive impact will be realised mainly through
the provision of guidance in the form of a QFT, as in the previous option. This
does not change. . 
Greater transparency on
conditions should also make it easier for SMEs to attract trainees by utilising
financial incentives. Given the current lack of transparency on conditions,
trainees often tend to orient their choice mainly on the basis of how
well-known the TP is. Less well known TPs are thus put at a disadvantage
regardless of the quality of their offer. Transparency on the conditions of the
offer by better-known organisations can therefore allow smaller entities to
compete better on the market for traineeships. This is even more true for
transparency on hiring policies: less well known or smaller organisations can
put forward a good hiring record as a means to attract high profile candidates
that would otherwise apply only at big organisations. This will generate a
market reward for serious traineeship and hiring policies. 
It should also be noted
that providing a modest level of remuneration/compensation, as is usually the
case for traineeships[43],
would generally not represent a significant cost factor for the organisation
but does make a difference for the livelihood of the trainee
Impact on demand for
traineeship positions
Greater market
transparency would lead to higher demand. Trainees would be able to select and
screen more easily and will not waste time applying for traineeships that they
cannot afford. Greater transparency will encourage more trust in traineeships
in general. The effect on demand should be particularly positive for quality
traineeships, while applications for substandard traineeships, which can be
expected to be concentrated in the least transparent category, would fall.
Overall assessment
The measure is simple, has
practically zero compliance costs for legitimate traineeships and discourages
unscrupulous practices. Acceptability for publication of remuneration
conditions in the vacancy notice should be high, given close to 90% acceptance
in SME test. Acceptance for the transparency requirement on hiring policies
will probably be lower given its innovative nature; nevertheless, its
compliance costs are negligible. This option – depending on the take-up rate of
the Council Recommendations – has a great potential to contribute to achieving
the intended objectives of increasing the share of quality traineeships,
discouraging abusive practices while keeping the compliance costs for TPs
limited and facilitating access to transnational traineeships through enhanced
information.
This option is likely to
have tangible impact, and thus can be judged effective.  It is efficient
as it entails practically zero compliance costs for legitimate traineeships and
discourages unscrupulous practices.  However uneven implementation could cause coherence
issues and may not be consistent with the mobility objective.
Further details are
provided in table 12 in Annex 12.13.
 Stakeholder position : transparency "The European Youth Forum reiterates its full support of all the claims made in the European Quality Charter on Internships and Apprenticeships regarding the rights of interns and apprentices. Alongside these claims, the European Youth Forum supports transparency as key to providing trainees with the ability to make informed choices about their future. Together with a legally binding Traineeship Agreement, transparency on hiring policy and traineeship conditions will put trainees in a better position to assess whether they are entering into a valuable learning opportunity or a dead-end traineeship with no learning value and no hiring prospects. The Youth Forum also underlines that transparency will improve the functioning of the market; by reducing the scope for poor quality traineeships, it will reward providers of quality offers, giving young people greater trust in traineeships, and in turn giving traineeship providers better-skilled and more motivated trainees." European Youth Forum 
9.5.        Option 4 – Directive on a Quality Framework for
Traineeships 
Assessment of impacts
The choice of a Directive
as a legal instrument implies that Member States, once it is approved and
enters into force, must transpose it into their legal system because it is,
unlike a Recommendation, a binding instrument. This has important implications
in terms of proportionality and the subsidiarity issue. The situation is not
clear-cut, as on the one hand, many of the problems in traineeships could
conceivably be handled at national level, while on the other the core solutions
put forward to tackle these problems tend to be largely the same, irrespective
of the labour market situation and the institutional specificities.
Furthermore, the national level has shown certain inertia in handling the
issue, and the mobility dimension of the problem is clearly much better
addressed by a QFT which is approved without variation and at the same time
across the Union. 
Given that the content of
option 4 is the same as for option 3b, the impacts would be the same, except
that Option 4 would have a significantly stronger impact on mobility, because
it would eliminate at source the barriers generated by the diversity of
national regulations. 
Assessment of
effectiveness
From a purely analytical
perspective, it does not seem the case that the greater leeway granted by a
Recommendation to tailor solutions to national specificities is of great
significance in this case. This is because most of the elements of the QFT
result in modest implementation costs and differentiation show few convincing
advantages compared to the simpler implementability of a unitary framework. An
indirect confirmation of this may be seen in the example of the recent
(end-2012) Italian guidelines on traineeships: although regions had ample
possibility to tailor the regulatory part of the guidelines, and despite the
large institutional and structural differences among Italian regions, in
practice regions chose to differentiate only the minimum levels of compensation
introduced by the guidelines. 
Overall, the advantages
and disadvantages of a Directive are therefore complementary to those for a
Council Recommendation, i.e. greater suitability to reach the uniformity needed
for mobility vs. the greater adherence to the subsidiarity and proportionality
principle. Another important consideration involves the longer timeframe
necessary to approve a directive. This is a major disadvantage, since in a
crisis context an urgent solution is sought not only by the European Commission
but also by most stakeholders. Furthermore, in the case of a Commission
proposal for a Directive there is a higher risk that the initiative fails due
to reluctance of certain Member States to adopt the Directive in the Council. 
In this context, it is
worth noting that Council Directive 91/533/EEC of 14 October 1991 already
imposes on employers’ the obligation to inform employees of the conditions
applicable to the contract or employment relationship[44]. The
Directive specifies that the information[45]
should be given to the employee in the form of a written contract or a letter
of engagement or one or more written documents not later than two months after
the commencement of employment (art. 3). However, this Directive is applicable
only to 'paid employees having a contract or employment relationship' defined
by national law (art. 1)[46].
It seems appropriate to consider extending the requirements of this directive
to cover trainees[47].
This option could be considered in the context of the envisaged review of this
Directive under the Refit process. 
Summing up, the choice
between a Council Recommendation and a Directive depends on an assessment of
the relative importance of devolving decisions at the lowest possible level,
the need to utilise mobility to fully exploit the possibilities offered by the
Single Market to reduce youth unemployment, and the balance between the need to
approve measures quickly and the benefit in having wide, simultaneous adoption
across the EU[48].
On balance there is no need to aim at a full harmonisation of the different
national traineeship legislations and a Council Recommendation is the better
one option without excluding recourse to a Directive later on if the Council
Recommendation proves insufficient in mobilising Member State action. Progress
on traineeships can be monitored during 2014, also within the European
Semester. 
Implementation and
enforcement
As in the case of option
3, implementation and enforcement would be up to Member States. The Commission
however would be more vigilant as to the parallel implementation of the
Directive in all Member States. 
Further details are
provided in table 13 in Annex 12.13.
9.6.        Summary
and comparison of options
The expected impacts of
the options are summarised and compared in the table below, indicating their
relative effectiveness in addressing the main problems identified and the
suitability of a European solution.
Table 7 Summary
and comparison of impacts of options
 Problem addressed || Base line || Option 1 Information Website || Option 2 Voluntary Quality Label || Option 3 Council Recommendation || Option 4 Directive 
 3a. QFT ‘basic’ || 3b. QFT + transparency || 4b. QFT + transparency 
 insufficient learning content || No change || 0/(+) || 0/(+) uptake likely to be limited || + Should stimulate spread of basic good practices (eg job description, definition of learning content, mentoring) || ++ Greater incentive to shift to paid traineeships and to increase hiring rates. Stimulates trainee productivity (not a free resource any more). || +++ Same as option 3b but stronger impacts. 
 Unsatisfactory working conditions ||   || (+) || 0 uptake zero in substandard traineeeships || (+) Will raise awareness of rights but enforcement difficulties make QFT not very suitable to tackle problem || +/(-) Creates incentive to gear traineeships to hiring, thus creating long-term orientation. On the other hand might result in greater pressure on trainees to be productive. || +/- Same as option 3b but stronger impacts. 
 Lack of or low compensation ||   || 0 || 0/(+) probably limited uptake/ Charter may not cover compensation. || 0 No provisions on compensation possible at EU level owing to legal basis issues || +++ Expected higher hiring rates also represent economic payoff for trainees. || +++ Expected higher hiring rates also represent economic payoff for trainees. 
 Low intra-EU trainee mobility ||   || ++ || (+) Effective on participating companies but impact limited given expected low uptake. Furthermore there might be differences among various charters. || ++ Will address extreme variety of regulation (including no regulation), reducing information barriers to mobility || ++ Greater awareness of pay levels and of chances in finding employment abroad and clarity on treatment and rights should stimulate applications by foreign candidates. || ++ Greater awareness of pay levels and of chances in finding employment abroad and clarity on treatment and rights should stimulate applications by foreign candidates. 
 Combination of possibilities ||   || Could be combined with any option. || Could be combined with option 1. || Could be combined with option 1. || Could be combined with option 1. || Could be combined with option 1. 
0 : zero or negligible impact
(+) / (-) : slight positive (negative) but uncertain
impact
+ / -: possible positive/ negative impact
++ / -- : likely positive/ negative impact
+++/---
: very likely positive/ negative impact
Other impacts
None of the options entail
any environmental impact. As for social impacts, the analysis in section 0
indicates that traineeships may substitute for unskilled or entry-level
positions. Furthermore, as discussed in section 4.2, the spread of unpaid
traineeships entails negative social impacts in terms of equity of access.
These impacts cannot be quantified. 
10.         Monitoring
and evaluation
The biggest challenge to
the monitoring of the impact of the envisaged options on the development of the
traineeships market is the lack of appropriate statistics in the area of
traineeships. Steps have already been taken by DG EMPL to address this issue by
introducing coverage of traineeships in the Ad Hoc Module on young people on
the labour market that will be included in the Eurostat Labour Force Survey
(LFS). This module is foreseen for 2016. 
However, it will not shed
light on the quality of traineeships. Hence, a follow-up Eurobarometer survey
is also planned for 2016 to monitor progress on quality after new rules on
traineeships will be adopted. The format of the 2013 Eurobarometer survey on
traineeships is a good basis for a future monitoring survey as, unlike the LFS,
it provides detailed information on traineeship quality. The two exercises are
planned to be launched at approximately the same date to allow ready
comparability.
Analysing the impact of
traineeships and traineeships quality on employment outcomes would require a
longitudinal survey. The feasibility of such a survey should be discussed with
Eurostat when the inclusion in the LFS is more advanced. 
Commission services will
also have to monitor adoption of new regulations in the Member States following
approval of a Council Recommendation or of a Directive.
Furthermore, as previously
described, the European Semester coordination mechanisms together with the
Youth Guarantee implementation mechanisms could also be applied to monitoring
the implementation of a Council Recommendation on traineeships.
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12.         ANNEXES
12.1.      Examples
of Member States’ Initiatives to Enhance Trainee Protection in the Open Market
■
Austria: in an effort to help the so-called ‘internship generation’ secure
regular employment instead of successive traineeships, the 2010 Aktion + 6000
Programme provides wage subsidies to employers if, upon completion of the
traineeship, they keep on the trainees.
■
France: in an attempt to address the issue of successive traineeships, the 2011
Loi Cherpion stipulates that, inter alia, companies should wait for a period
corresponding to 1/3 of the length of the previous traineeship before taking on
a new trainee in the same role. This law strengthens the legal framework of
traineeships and reinforces the trainee’s rights, terms and conditions,
including trainee compensation
■
Greece: in order to prevent employers from replacing regular staff with trainees,
the 2010 Work Experience Programme for New Labour Market Entrants stipulates
that companies which have reduced their staff in the last six months are not
eligible to take part. In addition, an employer cannot renew the traineeship
contract with the same trainee.
■
UK: a number of voluntary charters (CIPD’s Internship Charter) and codes of
best practice (Code of Best Practice for Quality Internships) are promoted in
an effort to improve the quality of traineeships in the open market.
Source:
Traineeship study, European Commission (2012a), p. 65
12.2.      Differences between Traineeships and Apprenticeships
Although the distinction
between the two can be fuzzy in some cases, traineeships and apprenticeships
differ in several respects:
1.
Apprenticeships are long-term and lead to formal academic qualification
An apprenticeship is a
systematic, long-term training alternating periods at the workplace and in an
educational institution or training centre. The characteristics of the
apprenticeship (e.g. occupation, duration, skills to be acquired, wage or
allowance) are defined in a training contract or formal agreement between the
apprentice and the employer directly or via the education institution.
Apprenticeships are normally part of formal education and training at upper secondary
level (ISCED 3), the duration of the training is on average 3 years, and a
successful completion leads to a nationally recognised qualification in a
specific occupation. However, it should be noted that most initial vocational
training programmes include some optional or compulsory practical training
either in school or in a company and the borders between apprenticeships and
school-based schemes which include traineeship periods at a workplace are not
clear-cut.
2.
Traineeships consist of work practice with a training component
Traineeships on the other
hand can be described as work practice including a training component. They
allow to document practical work experience as part of the individual CV and/or
as requested in educational curricula or to gain work practice for the purpose
of facilitating the transition from education and training to the labour
market. They are predominantly short- to middle-term (a few weeks up to 6
months, in certain cases 1 year). 
Traineeships within
education can be an optional or mandatory part of the curriculum or of the
graduation procedure. Traineeships can be part of labour market programmes
aiming at connecting or reintegrating people with the labour market. 
3.
Traineeships are lightly regulated 
In most Member States,
traineeships and related rights and conditions are only regulated in a fairly
general way at best and may not be regulated at all, in contrast to
apprenticeships which are normally tightly regulated. Furthermore, in a
majority of Member States,  traineeship contracts are explicitly excluded from
the scope of employment contracts. 
For greater details on the
distinction between traineeships and apprenticeships, please see the
Traineeship Study (European Commission (2012a))
12.3.      Regulatory Framework
Source: Traineeship study, European
Commission (2012a)
 
12.4.      Main concerns identified by the Traineeship study 
Insufficient learning content of
the traineeship is one of the problems that may weaken the traineeship's potential to increase the employability of a young
person. .Learning content is more likely to be formally defined where an
educational institution is involved. Traineeships involving just the trainee
and the employer more often lack content definition. This does not necessarily
mean that these placements are entirely devoid of structure and content. For
example, in the UK many employers voluntarily provided well-structured
traineeships with pre-defined content. It is noteworthy however that even in
Member States where regulation exists to define the content of traineeships
(e.g. AT, LU), there are concerns that employers do not always abide by these
rules. 
Another
worrisome point in relation to traineeships was found to be the lack of proper social
protection coverage (most often only health, and in some cases occupational
risk/accident insurance is being offered to the trainee). Traineeships which
form part of government sponsored programmes increasingly oblige employers to
pay the trainees’ social security contributions, either in full or in part
through subsidies (e.g. in CY, EL, PL).
The
lack of compensation or low pay and the prospect of exploitation
are general concerns mainly in the case of traineeships in the open market and
mandatory professional training schemes. This is one of the most common theme
and starkest message emerging in the study as well as in public debates,
available literature, and information provided by trainees. The risk of
substituting regular employment by traineeships is greater in Member States
with high unemployment and/or unfavourable labour market conditions for young
people (e.g. EL, ES, IT, PT). However, using traineeships as free labour is a
growing phenomenon also in other countries, where young people might have to do
several traineeships before they find a proper job. Whether traineeships should
be paid or not is a contentious issue in many countries. Employers’
organisations often argue that trainees gain work-related experience which
will improve their employability, while taking on board a trainee can be
time-consuming and resource intensive for the traineeship provider. 
On
the other hand, trainees who are not or insufficiently compensated have to rely
on other sources of financial support, including own and/or family resources.
This, in turn, raises concerns about equity of access, since those from
less privileged backgrounds may not be able to draw on such resources in order
to undertake traineeships to gain work-related experience and enhance their
employability. Trainees are reported to be in many cases asked to carry out
tasks usually performed by regular, fully-paid staff for which they receive no
or low compensation. The issue of no or low trainee compensation (associated
with poor trainee-related terms and conditions such as lack of social security
coverage) is critical because a significant segment of young people may have to
undertake a series of traineeships before securing stable employment. This can,
in turn, seriously impede their ability to become financially self-sufficient
and lead an independent and autonomous life. Further, there are indications of
a gender ‘pay gap’ in traineeships with a larger proportion of women in unpaid
or low paid placements. 
Finally,
low quality seems to be more common where there is a lack of monitoring and
clear traineeship linked objectives. 
Source: Traineeship study, European Commission (2012a)
12.5.      Quality of traineeships and labour market outcomes: an
econometric analysis of the data of the Eurobarometer survey
In April and May 2013, a
Flash Eurobarometer Survey of young people aged between 18 and 35 years on
"The Traineeship Experience" (EB 378) was carried out for the
European Commission (DG EMPM) in the 28 EU countries. The objective was to
learn more about various quality aspects of traineeships in the EU. The survey
delivered 13.400 valid responses of which 5.500 answered they had experience
with at least one traineeship. 
Using EB 378, this annex
shows evidence on how important different quality aspects are for labour market
outcome. A logit regression is carried out, with the "labour market
outcome" as dependent variable and a number of specific quality-relevant
questions as explanatory variables (together with socio-demographic controls).
Of course, only those 5.500 responses were included which have some kind of
experience with traineeships.
1. Quality of training
and the general labour market outcome
As dependent variable we
chose D5 (i.e., the 'Y' in the estimation):
"As far as your
current occupation is concerned, would you say you are self-employed, an
employee, a manual worker or would you say that you are without a professional
activity? Does it mean that you are.."
We transfer D5 into a
dichotomic variable which is classified "1" if people state they are
"Seeking a job" and "0" otherwise, assuming a detrimental
labour market outcome if people were currently unemployed. We consider only
non-students (which reduces the sample size further down to 4.300). 
The (partly transformed)
independent variables are the following (the X-variables):
Q10_1:
During this traineeship, you learnt things that are useful professionally?
Classes: Total Agree/ total disagree
Q10_2:
This traineeship was or will be helpful for you to find a regular job? Classes:
Total Agree/ total disagree
Q10_3:
Apart from your pay, your working conditions were equivalent to those of
regular employees? Classes: Total Agree/ total disagree
Q10_4:
During this traineeship, you could turn to a mentor who helped you and
explained how to do the work? Classes: Total Agree/ total disagree
Q11_1:
The last traineeship took place, at least partly, in another EU country.
Classes: Don’t know / No / Yes
Q11_2:
You signed a written agreement or contract with the organisation or company. 
Classes: Don’t know / No / Yes
 Q11_3:
In the event of illness or accident, you would have been covered by insurance. 
. Classes: Don’t know / No / Yes
Q11_4:
At the end of your traineeship, the organisation or company offered you an
employment contract. . Classes: Don’t know / No / Yes
Q11_5:
At the end of your traineeship, the organisation or company offered to renew or
extend the traineeship. Classes: Don’t know / No / Yes
Q11_6:
The advertisement made it clear how much the traineeship was paid. Classes:
Don’t know / No / Yes
Q11_7:
At the end of your traineeship the organisation or company gave you a
certificate or a letter of reference describing what you had done. Classes:
Don’t know / No / Yes
Q11_8:
You received financial compensation. Classes: Don’t know / No / Yes
All questions refer to the
respective last traineeship. On top, the following socio-demographic
control variables are included in the regression:
D2:
Gender? Classes: Male / Female
D1R1:
Age group? Classes: Age 18-19 / Age 20-24 / Age 25-29 / Age 30-35
D3A2:
You have university degree? Classes: Don’t know / No / Yes
D13:
Degree of urbanity? Classes: Rural / Small or medium town / Large city
Table 1 shows the
estimated coefficient following a multinomial logistic regression. As all
variables are non-continuous, i.e., classified, a multinomial logistic
regression is carried out with all independent variables' class values being
referred to a reference class which is the respective last one for each
variable as shown in Table 1. 
Column 4 shows the
parameter estimation for the logit
,
where both Y and X are
categorical variables, p(Y) is the probability that Y shows a bad labour market
outcome (i.e., Y=1: searching a job). That is, looking at a certain explanatory
variable X, a parameter  equal to zero means that the probability that there will be a bad
labour market outcome (Y=1) is the same for a certain value X=Xi as
for the reference class X=Xref. In that case, the odds-ratio, i.e.,
the relative probability p(y)/[1-p(y)] for X=Xi ,is equal to 1. 
Column 5 shows the
coefficient's odds ratio. An odds ratio above 1 (i.e., a positive coefficient)
means that the probability of a bad labour market outcome will be higher for
the respective category Xi, relative to the reference category Xref.
The logarithm stipulates a non-linear (exponential) relation between the
odds-ratio and .
Column 6 shows the
significance level for the estimation of , column 7 gives the upper and the lower bound for  in a 95% confidential interval.
Most estimated coefficients
for indicators Q10 and Q11 show the expected sign, some are insignificant,
though.

 Looking at core quality variable Q10_2
     (statement: 'the last traineeship was or will be helpful to find a regular
     job'), it appears that those who agree on the statement have a much lower
     probability to find themselves in a situation where they have to search a
     job (Y=1) than those who disagree. In fact, probability to be on the job
     search for those who think their traineeship was helpful is only some 60%
     of the probability of those who disagree to such statement. If the
     confidential interval is defined 95%, the coefficient remains clearly
     negative, and the parameter estimation itself shows a significance level
     of practically zero: the likelihood that the coefficient is in fact equal
     to zero is de facto non-existing. 
 Strongly related to the question of whether or
     not the training helped to find a regular job, and equally as significant,
     is the issue of perceived usefulness of the training ("learned useful
     things", Q10_1). Those who support such strong statement face a risk
     of currently being unemployed which is 75% higher than the risk of their
     more optimistic peers. One reason for this finding could be that training
     measures for unemployed people typically result in new 'things to learn'
     to the extent the general skills level is low for the respective clientele
     and/or the nature of those measures is re-training into a new occupation.
 The question of having had an insurance against
     accidents (Q11_3) is of such fundamental importance for job quality that
     it has strong explanatory power for the individual labour market outcome
     in the long term. The risk of currently being unemployed is more than 60%
     higher for those who did not have an accident or illness insurance,
     relative to their counterparts. 
 In a way self-evident is the finding that people
     who were not offered an employment contract after the training (Q11_4)
     face a 75% higher risk of currently being on the job search than those who
     were offered such contract.
 Those who support the statement which confirms
     that as trainees they 'could turn to a mentor' (Q10_4) face a lower
     probability to end up on the job-search later on.
 Likewise, those who confirm they were offered a
     certificate of reference at the end of the traineeship (Q11_7) have a
     significantly lower risk of currently being unemployed.

Table 1: Parameter estimation resulting from a logit regression:
Dependent variable: Job search probability
Source:
DG EMPL calculation based on EB 378
On the other hand, other
statements of which one may expect some influence on the labour market outcome
show insignificant coefficients. 

 Not having received a financial compensation
     during the last traineeship (Q11_8) is obviously not strongly related to
     the risk of currently being on job search. Much speaks indeed for numerous
     traineeships to be used as a shorter "probation period" in the
     same organisation which after the traineeship offers some kind of
     employment (see also Q11_4). 
 On the other hand, being offered an extension
     of a traineeship (Q11_5) is evidently not helping much to improve the
     individual labour market outcome – a finding which supports the thesis
     that long time-loops in training will not lead to better labour market
     results in the long run.

Other questions are undoubtedly
decisive for the quality of training but evidently do not have a strong impact
on the current labour market status (i.e., only weak significance): 

 Having been offered a contract in writing,
     though particularly important for workers for social security
     considerations, plays only a minor role in reducing probability to be on
     the job search (Q11_2). 
 Likewise, having seen an advertisement prior to
     the training that made clear the conditions (Q11_6) is not statistically
     significant …
 ..as is the question of having similar working
     conditions as trainee compared to normal employees (Q10_3). 

However, one cannot deduce
that those issues fail to influence one's labour market situation as in all
these cases the problem of multi-collinearity seems to play a role. That is,
the explanatory variables are inter-correlated which can bias the parameter
estimation.
Running a second regression with Q11_6 (conditions
made clear a priori in an advertisement) as dependent variable shows very
significance evidence that a more transparent information on the conditions of
the traineeship goes hand in hand with receiving financial compensation
(Q11_8), being given a certificate of reference at the end (Q11_7), having
signed a contract in writing (Q11_2) or facing the same conditions as normally
employed people (Q10_3).
Looking at
socio-demographic characteristics shows no surprises:
Male
persons tend to face a higher risk of being on the job-search (D2,
insignificant, though). 
Age
is a highly significant determinant: The younger the person the higher is the
risk of being unemployed (D1R1) – a situation which also reflects the
inacceptable current level of current youth unemployment in the EU. 
People
not living in large cities face a higher risk of unemployment compared to their
urban peers (D13, significant at 5-11%). 
Not
having a university degree (D3A2) increases the risk of being on the job-search
(significant at 9%).  
2. Quality of training
and perspectives in the same company
A second regression is
being done following the same list of independent variables, but this time
asking for the specific instead of the general labour market outcome,
i.e., the trainee's employment perspective in the context of the company in
which he/she did the training: The dependent variable here is the statement 
Q11_4: "At the end of
your traineeship, the organisation or company offered you an employment
contract."
where we set Y=1 in case a
person confirms the statement (answers "yes") and Y=0 if the answer
is no. Apart from that list of variables remains the same. 
Table 2: Parameter estimation resulting from a logit regression:
Dependent variable: Probability to get recruited by the same organisation after
the training
Source:
DG EMPL calculation based on EB 378
Table 2 shows the result.
The main differences to the estimation on the general question in section 1
are: 
The
issue of receiving compensation (Q11_8) becomes highly significant in the
specific company context: Those who haven’t received compensation face only
half the probability of being offered a contract after the training by the same
organisation. 
The
same holds true for question Q10_3 (working conditions equivalent to 'normal
employees'): Those who think they were offering equivalent working conditions
have a 40% higher chance to be offered an employment contract after the
training. 
Those
who do not have a contract in writing (Q11_2) face only half the chance to be
offered an employment contract after the training compared to the residual
group.
Those findings reflect that
in the context of the organisation the seriousness of hiring a trainee in a
long-term perspective instead of only exploiting cheap labour is being largely
reflected by the readiness to offer good-quality traineeship. 
Additional remarks:
The high significance of
Q11_5 (offered extension/renewal at the end of training) is an almost certain
sign that most people could not draw the line between q11_4 (offered an
employment contract) and q11_5. There is some significance for the finding that
those not receiving a letter of reference after the training stand a higher
chance to be recruited by the very company which is somehow understandable as a
testimonial is only needed when applying elsewhere.
3. On the fundamental
question: Differences in socio-demographics between those who have experience
with traineeships and those who have not
Taking on board the entire sample of 13.400 respondents, this
section elaborates on the socio-demographics of having experience with
traineeships or apprenticeships.
The fundamental question is: 
Q1 "Have you ever had any of the following experiences
...?"  (0: no, 1: yes)
      Sub-question                                                         Number
of valid responses 
- Q1.1 "… traineeships"                                              "no
(0)": 7.900, "yes (1)": 5.400 
- Q1.2 "… apprenticeships"                                        "no
(0)": 10.200, "yes (1)": 3.100 
We take Q1 as dependent variable Y in a logistic regression with
only the socio-demographic control variables (D2: Gender; D1R1: Age group;
D3A2: University degree?; D13: Degree of urbanity; BRK2: Working status) as
explanatory variables X in order to find out whether there are significant
differences between people with and those without experience.
Tables 3a and 3b show the results.
Table 3a: Parameter estimation resulting from a logit regression:
Dependent variable: Experience or not with traineeships
Source:
DG EMPL calculation based on EB 378
Table 3b: Parameter estimation resulting from a logit regression:
Dependent variable: Experience or not with apprenticeships
Source:
DG EMPL calculation based on EB 378
There are fundamental differences between the socio-demographic
characteristics of people experienced with traineeships, compared to
apprenticeships. Those are summarised in the table:
 Propensity for traineeships / apprenticeships is higher for … || 
   || 
   || Gender || Age group (total: 18-35) || Having university degree || Degree of urbanity || Being active (working) 
 Traineeship || Women || people below 30 || people with degree || (insignificant) || working people 
 Apprenticeship || Men || (insignificant) || people without degree || people in rural areas || working people 
 

 There is evidence that women are more inclined
     to do traineeships whereas the propensity to have experience with
     apprenticeships is higher for men.
 One would suggest that for logical reasons the
     probability to have had experience with traineeships or apprenticeships
     increases with age simply because of seniority. However, there is no such
     trend. Looking at apprenticeships, only the very young (18-19 years) have
     significantly lower experience, other age groups not being significantly
     different. The probability to have experience with traineeships is even
     significantly higher for the age groups below 30 than for the 30-35 years
     group (despite seniority). That is, for the younger cohorts (some kind of)
     training appears to have been of much higher popularity compared to the
     cohort from age 30. This suggests that traineeships have become much more
     widespread for young people at least over the last 10 to 15 years –
     potentially reflecting a general deterioration of the labour market for
     younger people and/or another change in the working environment which
     triggers the use and of trainees by firms and the take-up of traineeships
     by young people.
 Apprenticeships are significantly more popular
     for people without university degree as in many cases an apprenticeship is
     the start into a "non-academic" career. For traineeships it is
     the other way around.
 Likewise, apprenticeships seem to be the more
     popular the more rural the area in which the person lives – reflecting the
     relatively higher propensity to undergo tertiary education in urban areas.
     For traineeships there is no significant difference as concerns the degree
     of urbanity.
 Active (working) people show a much higher
     inclination to undergo some kind of training than people currently
     inactive. The same holds true for apprenticeships.

12.6.      Results of the European Youth Forum survey
While the Eurobarometer survey (see Box 3) was
conducted on a representative sample of young European citizens, another 
interesting – although non-representative – source on EU traineeships is the
European Youth Forum Survey conducted among (ex)trainees in the EU from April
to July 2011. The 3028 responses provide a large enough sample for drawing some
conclusions concerning quality concerns related to traineeships, as well as the
dimension of the problem.
Most trainees are in their twenties and traineeships
typically last between 4 and 6 months. The majority of respondents (63%) have
done one or two traineeships (but 37 % has already done 3 or more) and the most
common ways of finding a traineeship is by applying directly to organisations,
searching on the internet, and making use of personal connections. With regards
to the motivation for doing a traineeship, improving their CV and improving
future job opportunities were the two most significant factors. Some also
wanted to learn more about a particular organisation or field of work, or get
first-hand experience of working life. A high number of trainees also cited a
lack of available jobs as a motivation. 
The quality of the traineeship is a core concern of
the trainee, and takes precedence over other factors such as remuneration.
Although three out of four respondents were not (51%) or insufficiently (24%)
compensated and had to rely on parental support, savings, or other forms of
external financial means, they seem more interested in the potential gains from
the traineeship than its costs. An example is the traineeship satisfaction
rates of the post-studies (open market) trainees, which did not differ from the
average despite the fact that they more often received no or low pay. A 16%
share of trainees managed to turn their traineeship into a job with their traineeship
provider afterwards.
A
25% share of trainees report not having had a written traineeship agreement
(which the Traineeship study identified as an important quality indicator). 54%
of (ex)trainees were completely satisfied with the mentor’s performance
(excellent or good), and further 19% evaluated the mentor as satisfactory –
meaning that every fourth trainee lacked a good mentor. The learning content of
the traineeship was relevant to the studies/career interests for 56% of the
trainees (excellent or good), and satisfactory for further 24%; however this
was not the case for every fifth respondent.
12.7.      SMEs
Test Results
FINAL
RESULTS AS OF 28 JUNE 2013
 Current search: ||   
Query
definition
All
data requested
Result
pages
 There are 914 responses matching your criteria of a total of 914 records in the current set of data. 
 Expand all - Collapse all 
Sorted answersOriginal
order 
Company
identification  
1. How many employees does your
organisation have?
-single
choice reply- (optional) 
   ||   || Number of requested records || Requested records (914) || % of total number records (914) || % of total number records (895) 
   || a) 0 || 40 || (4.4%) || (4.4%) || (4.5%) 
   || b) 1-9 || 397 || (43.4%) || (43.4%) || (44.4%) 
   || c) 10-50 || 291 || (31.8%) || (31.8%) || (32.5%) 
   || d) 51-250 || 167 || (18.3%) || (18.3%) || (18.7%) 
   || N/A || 19 || (2.1%) || (2.1%) || - 
2. In which Member State is your
organisation based?
-single
choice reply- (compulsory) 
   ||   || Number of requested records || Requested records (914) || % of total number records (914) 
   ||  Austria || 3 || (0.3%) || (0.3%) 
   ||  Belgium || 0 || (0%) || (0%) 
   ||  Bulgaria || 7 || (0.8%) || (0.8%) 
   ||  Cyprus || 0 || (0%) || (0%) 
   ||  Czech Republic || 8 || (0.9%) || (0.9%) 
   ||  Denmark || 3 || (0.3%) || (0.3%) 
   ||  Estonia || 0 || (0%) || (0%) 
   ||  Finland || 36 || (3.9%) || (3.9%) 
   ||  France || 63 || (6.9%) || (6.9%) 
   ||  Germany || 9 || (1%) || (1%) 
   ||  Greece || 3 || (0.3%) || (0.3%) 
   ||  Hungary || 0 || (0%) || (0%) 
   ||  Ireland || 0 || (0%) || (0%) 
   ||  Italy || 127 || (13.9%) || (13.9%) 
   ||  Latvia || 0 || (0%) || (0%) 
   ||  Lithuania || 0 || (0%) || (0%) 
   ||  Luxembourg || 0 || (0%) || (0%) 
   ||  Malta || 0 || (0%) || (0%) 
   ||  Netherlands || 0 || (0%) || (0%) 
   ||  Poland || 83 || (9.1%) || (9.1%) 
   ||  Portugal || 528 || (57.8%) || (57.8%) 
   ||  Romania || 1 || (0.1%) || (0.1%) 
   ||  Slovakia || 0 || (0%) || (0%) 
   ||  Slovenia || 11 || (1.2%) || (1.2%) 
   ||  Spain || 32 || (3.5%) || (3.5%) 
   ||  Sweden || 0 || (0%) || (0%) 
   ||  United Kingdom || 0 || (0%) || (0%) 
   || Other || 0 || (0%) || (0%) 
3. In which sector is your organisation
operating?
-single
choice reply- (optional) 
   ||   || Number of requested records || Requested records (914) || % of total number records (914) || % of total number records (900) 
   || A AGRICULTURE, FORESTRY AND FISHING || 25 || (2.7%) || (2.7%) || (2.8%) 
   || B MINING AND QUARRYING || 0 || (0%) || (0%) || (0%) 
   || C MANUFACTURING || 162 || (17.7%) || (17.7%) || (18%) 
   || D ELECTRICITY, GAS, STEAM AND AIR CONDITIONING SUPPLY || 18 || (2%) || (2%) || (2%) 
   || E WATER SUPPLY; SEWERAGE, WASTE MANAGEMENT AND REMEDIATION ACTIVITIES || 9 || (1%) || (1%) || (1%) 
   || F CONSTRUCTION || 46 || (5%) || (5%) || (5.1%) 
   || G WHOLESALE AND RETAIL TRADE; REPAIR OF MOTOR VEHICLES AND MOTORCYCLES || 88 || (9.6%) || (9.6%) || (9.8%) 
   || H TRANSPORTATION AND STORAGE || 14 || (1.5%) || (1.5%) || (1.6%) 
   || I ACCOMMODATION AND FOOD SERVICE ACTIVITIES || 36 || (3.9%) || (3.9%) || (4%) 
   || J INFORMATION AND COMMUNICATION || 56 || (6.1%) || (6.1%) || (6.2%) 
   || K FINANCIAL AND INSURANCE ACTIVITIES || 15 || (1.6%) || (1.6%) || (1.7%) 
   || L REAL ESTATE ACTIVITIES || 13 || (1.4%) || (1.4%) || (1.4%) 
   || M PROFESSIONAL, SCIENTIFIC AND TECHNICAL ACTIVITIES || 79 || (8.6%) || (8.6%) || (8.8%) 
   || N ADMINISTRATIVE AND SUPPORT SERVICE ACTIVITIES || 31 || (3.4%) || (3.4%) || (3.4%) 
   || O PUBLIC ADMINISTRATION AND DEFENCE; COMPULSORY SOCIAL SECURITY || 3 || (0.3%) || (0.3%) || (0.3%) 
   || P EDUCATION || 51 || (5.6%) || (5.6%) || (5.7%) 
   || Q HUMAN HEALTH AND SOCIAL WORK ACTIVITIES || 67 || (7.3%) || (7.3%) || (7.4%) 
   || R ARTS, ENTERTAINMENT AND RECREATION || 9 || (1%) || (1%) || (1%) 
   || S OTHER SERVICE ACTIVITIES || 171 || (18.7%) || (18.7%) || (19%) 
   || T ACTIVITIES OF HOUSEHOLDS AS EMPLOYERS; UNDIFFERENTIATED GOODS- AND SERVICES-PRODUCING ACTIVITIES OF HOUSEHOLDS FOR OWN USE || 3 || (0.3%) || (0.3%) || (0.3%) 
   || U ACTIVITIES OF EXTRATERRITORIAL ORGANISATIONS AND BODIES || 4 || (0.4%) || (0.4%) || (0.4%) 
   || N/A || 14 || (1.5%) || (1.5%) || - 
Questions on Traineeships
If you answer for Question 4 was '0' please
continue with Question 5.
Otherwise please go to Question 6.
5. Would your organisation be interested in
having a trainee? -multiple choices reply- (optional) 
   ||   || Number of requested records || Requested records (914) || % of total number records (914) || % of total number records (356) 
   || a) yes, even if it involves certain costs (financial and/or human resources) || 140 || (15.3%) || (15.3%) || (39.3%) 
   || b) yes, but only if it does not involve any cost (financial or human resources) || 124 || (13.6%) || (13.6%) || (34.8%) 
   || c) yes, but we cannot find a suitable applicant || 29 || (3.2%) || (3.2%) || (8.1%) 
   || d) no, the company is not able to ensure the necessary conditions for the trainee || 25 || (2.7%) || (2.7%) || (7%) 
   || e) no, the cost of hosting a trainee is too high for the company || 15 || (1.6%) || (1.6%) || (4.2%) 
   || f) no, I do not see how the trainee could contribute to the work of the company || 23 || (2.5%) || (2.5%) || (6.5%) 
   || N/A || 558 || (61.1%) || (61.1%) || - 
Please answer the following questions only
if your reply for Question 4 was not '0'.
6. What was the usual duration of the
traineeships offered by your organisation? -single choice reply- (optional) 
   ||   || Number of requested records || Requested records (914) || % of total number records (914) || % of total number records (770) 
   || a) less than 1 month || 22 || (2.4%) || (2.4%) || (2.9%) 
   || b) 1- 3 months || 151 || (16.5%) || (16.5%) || (19.6%) 
   || c) 3-6 months || 129 || (14.1%) || (14.1%) || (16.8%) 
   || d) 6-12 months || 458 || (50.1%) || (50.1%) || (59.5%) 
   || e) more than 12 months || 10 || (1.1%) || (1.1%) || (1.3%) 
   || N/A || 144 || (15.8%) || (15.8%) || - 
7. What was the usual educational level of
the trainees?
-multiple
choices reply- (optional) 
   ||   || Number of requested records || Requested records (914) || % of total number records (914) 
   || a) university graduates || 461 || (50.4%) || (50.4%) 
   || b) university students || 177 || (19.4%) || (19.4%) 
   || c) secondary education graduates || 101 || (11.1%) || (11.1%) 
   || d) secondary education students || 93 || (10.2%) || (10.2%) 
   || e) vocational education graduates || 110 || (12%) || (12%) 
   || f) vocational education students || 157 || (17.2%) || (17.2%) 
   || g) they have no formal education || 9 || (1%) || (1%) 
8. Was any other institution involved in
this traineeship apart from the trainee and your organisation?
-single
choice reply- (optional) 
   ||   || Number of requested records || Requested records (914) || % of total number records (914) || % of total number records (765) 
   || a) There was no other institution or programme involved || 169 || (18.5%) || (18.5%) || (22.1%) 
   || b) An educational institution as the sending institution || 189 || (20.7%) || (20.7%) || (24.7%) 
   || c) State/regional/local government (traineeship programme) || 241 || (26.4%) || (26.4%) || (31.5%) 
   || d) Public Employment Service || 143 || (15.6%) || (15.6%) || (18.7%) 
 || e) other – please specify: || 23 || (2.5%) || (2.5%) || (3%) 
   || N/A || 149 || (16.3%) || (16.3%) || - 
9. Why do you provide traineeships? (Multiple
choices possible)
-multiple
choices reply- (optional) 
   ||   || Number of requested records || Requested records (914) || % of total number records (914) 
   || a) Building corporate image/ advertising the enterprise to potential applicants || 117 || (12.8%) || (12.8%) 
   || b) Training potential future employees || 657 || (71.9%) || (71.9%) 
   || c) Part of the entrepreneurial responsibility to contribute to high skilled staff || 289 || (31.6%) || (31.6%) 
   || d) Trainees bring new ideas to the enterprise || 324 || (35.4%) || (35.4%) 
   || e) Cheap and flexible workforce || 99 || (10.8%) || (10.8%) 
10. Which of the following measures does
your company ensure for its trainees? (Multiple choices possible)
-multiple
choices reply- (optional) 
   ||   || Number of requested records || Requested records (914) || % of total number records (914) 
   || a) Traineeship agreement (contract) || 656 || (71.8%) || (71.8%) 
   || b) Clearly defined learning objectives || 548 || (60%) || (60%) 
   || c) Mentoring and evaluation || 555 || (60.7%) || (60.7%) 
   || d) Certificate at the end of the traineeship with description of tasks accomplished || 457 || (50%) || (50%) 
   || e) Social protection coverage || 321 || (35.1%) || (35.1%) 
   || f) Remuneration/compensation || 423 || (46.3%) || (46.3%) 
 || g) Other – please specify: || 38 || (4.2%) || (4.2%) 
13. Not speaking of your company but in
general, do you think that concerns by the public on the existence of some
cases of abuse of traineeships, in which trainees are used as a cheap or unpaid
labour force and/or do not learn much, are founded ?
-single
choice reply- (optional) 
   ||   || Number of requested records || Requested records (914) || % of total number records (914) || % of total number records (781) 
   || a) yes, such cases are frequent || 153 || (16.7%) || (16.7%) || (19.6%) 
   || b) yes, cases such as these exist || 428 || (46.8%) || (46.8%) || (54.8%) 
   || c) no, cases of abuse are a small minority || 200 || (21.9%) || (21.9%) || (25.6%) 
   || N/A || 133 || (14.6%) || (14.6%) || - 
14. Which of these measures would you
consider as difficult for you to introduce? (Multiple choices possible)
-multiple choices reply- (optional) 
   ||   || Number of requested records || Requested records (914) || % of total number records (914) 
   || a) Written traineeship agreement (contract) || 47 || (5.1%) || (5.1%) 
   || b) Clearly defined learning objectives || 98 || (10.7%) || (10.7%) 
   || c) Mentoring and evaluation || 64 || (7%) || (7%) 
   || d) Certificate at the end of the traineeship with tasks accomplished || 44 || (4.8%) || (4.8%) 
   || e) Social protection coverage || 203 || (22.2%) || (22.2%) 
   || f) Remuneration/compensation || 257 || (28.1%) || (28.1%) 
   || g) When publishing the opening for the traineeship position, to state in brief the terms and conditions (including on compensation/social protection) || 101 || (11.1%) || (11.1%) 
   || h) They constitute/would constitute no or only minor cost to my organisation || 124 || (13.6%) || (13.6%) 
15. Would the introduction of any of these
measures make hosting trainees impossible for you? -single choice reply-
(optional) 
   ||   || Number of requested records || Requested records (914) || % of total number records (914) || % of total number records (763) 
   || a) not at all || 516 || (56.5%) || (56.5%) || (67.6%) 
   || b) no, but I would have to reduce their number || 142 || (15.5%) || (15.5%) || (18.6%) 
   || c) yes || 105 || (11.5%) || (11.5%) || (13.8%) 
   || N/A || 151 || (16.5%) || (16.5%) || - 
12.8.      Case
studies - the benefits and costs of providing quality traineeships
Swedbank's 'Young Jobs' project
In
2010 Swedbank launched the project “Young Jobs”. The idea is to use Swedbank’s
extensive network of branches to encourage the creation of trainee positions
for people aged between 18 and 24. The objective is not only to create trainee
positions at the Swedbank and related Savingsbanks' branches, but also to
encourage the bank’s corporate clients (businesses and municipalities) to offer
trainee positions themselves. The bank’s employees have a good understanding of
the local companies’ operations as well as their needs and are therefore in a
good position to identify possible job openings. The project is conducted in
cooperation with local employment offices. 
To
support the project, the website www.ungajobb.se, was created where young
people can search for new trainee opportunities while companies can enroll in
the project.
The
total number of traineeships created by the project was 3,000 – including 400
traineeships within Swedbank, 1,600 traineeships in the Savings banks' 600
branches as well as 1,000 further traineeships at partner companies.
The
traineeships included three months of practice also supported by the Swedish
Public Employment Service Centre. Two full days of education, as well as five
days of tutoring by staff members ensured the quality learning content.
Swedbank’s
branch office managers evaluated the project positively:
-               82
per cent said that Young Jobs has actively contributed in strengthening the
bank’s brand.
-               65
per cent believed that Young Jobs has increased the confidence of personnel.
-               64
per cent answered that they are continuously planning to invite more trainees.
-               26
per cent stated that the project has increased business among current clients.
-               18
per cent point out that the project has resulted in new clients.
Of
the approximately 400 apprentices within the bank 70% have been offered some
form of employment after their internships. The costs of the programme for the
bank are estimated at around € 1,200,000 per year, i.e. about € 3,000 per
trainee. 
Audi traineeship project in Brussels
Audi
Brussels has recently launched an initiative together with two Belgian VET
schools with the aim of providing a high quality technical traineeship.
Although the traineeship borders on an apprenticeship in terms of the
organisation and ambition of the scheme, it represents a useful example of an
unpaid, but quality traineeship.
Audi
provides traineeship placements for 10 VET students, who spend a total of 600
hours in 75 days with the company (one day per week plus a 3 week workshop).
The objective is to offer all the trainees a job at the end of the programme.
The costs faced by Audi include two persons (not full-time) following the
programme, organizing a course for 10 trainers, and about € 300,000 to
adapt the facilities to the needs of the programme. Audi’s motivation is that
it allows the company to train its future employees, thus reducing later
recruitment costs. The programme is also part of the company's CSR policy; it
helps to reinforce the image of Audi in Belgium.
Sources: Swedbank AB, Audi AG
12.9.      Motivations
for supplying and applying for traineeships
Reasons why traineeship
providers offer traineeship positions
As highlighted last year
in the Analytical Document, the economic literature indicates that traineeship
providers (HOs) offer traineeship positions for three reasons (see Box 1 for a
quantification): 
1) Better selection of
job applicants
A better screening of
job applicants, based on direct experience with the candidate rather than
'signals' (Stolorz, 2005), as shown by higher retention rates of employees who
were in traineeships in the same company. Traineeships also may help attract
more or better job candidates; 
2) Lower labour costs
and positive impact on innovation
HOs can utilise the
trainees to conduct certain work activities at lower cost than regular
employees, while benefiting from their up-to-date academic knowledge; 
3). Reputational
benefits
A company’s involvement
in a well-designed traineeship programme can be seen as a mark of quality. The
provision of quality traineeships is sometimes utilised as an integral part of
an organisation’s CSR (Corporate Social Responsibility) and employer brand[49].

Reasons why young
people apply for traineeships
As documented by
research, young people apply for traineeships to build up experience and practical
skills in order to strengthen their employment prospects. A positive
traineeship experience can play an important formative role both during
and after studies. During studies, traineeships have been found, inter
alia, to improve academic performance and help youths orient their job
search (Coco, 2000; Beard, 1998; Knechel, 1987; English, 1993). After studies,
traineeships helped improve the transition from school to work, also, notably,
in the case of expatriate trainees (Feldman, 1998). Traineeships enhance
students’ chances of receiving job offers both at the firms where they trained
and elsewhere due to signalling effects. After graduation, the work performance
of professionals that had had a traineeship experience was found to be better,
and their retention and promotion rates were also significantly higher (Höft
and Hell, 2007; Siegel, 2010, 2012).
Costs
Traineeships obviously
entail costs both for trainees and for HOs. For trainees, the most important
cost factor is the fact that traineeships are for the most part unpaid and cost
for the trainee are not compensated (e.g. living and transport costs). For HOs,
the main costs, besides any direct compensation of trainees, relate to training
costs, represented mainly by the time that trainers or other employees have to
spend overseeing the trainee. Additional costs include the provision to the
trainee of office space and equipment[50].
In a quality context, substantial training costs may justify low compensation
or even the absence of compensation (see annex 0 for two case studies).
Trend development of
traineeships and their link with the business cycle
There are no official
statistics on traineeships. The only supply-side data available refer to Italy[51].
These data are in line with the strong trend increase for traineeships reported
by experts in many countries (see Error! Reference source not found.).
Estimates for France[52],
available only for 2006 and 2012, show an even stronger increase.
Italian data also show
that the number of traineeships correlates strongly with the business cycle:
traineeships fell for the first time in 2009, at the beginning of the crisis,
and their decline was stronger than that of overall employment. 
Figure 1 Traineeships
and total employment, Italy, 2005-2011
12.10.    Economics of traineeships
In
a regular employment contract, the benefit each party obtains from the
arrangement is, to a large extent, clear and measurable. In exchange for his or
her work effort, the worker receives a known amount of pay. The pay is fixed in
advance and the work effort can be monitored by the employer. In a traineeship,
in contrast, the benefits accruing to the trainee are hard to assess in advance
and hard to monitor even during the traineeship; it is very hard for the
trainee to realistically assess his or her chances of hiring even when the
traineeship has already started). This situation of asymmetric information
creates room for unscrupulous practices.
To
be sure, there are other elements of mutual benefit that are less concrete and
measurable, but may yet form part of either side’s expectations from the
contract: for example, the worker may expect a pay raise in the future, or the
firm may expect a well-treated worker to spread some good words about the
company. But in any case these are accessory elements, which would not
fundamentally alter the balance of the relationship if they did not
materialize.
The
situation is radically different in a traineeship contract. Here, the main
benefits accruing to the two parties are not so much pay and effort but a set
of other benefits. The main benefits of the traineeship for the traineeship
provider are:
1.         The
possibility to assess precisely the value and productivity of the trainee in
case it should want to hire a worker ("screening" benefit); this is
often the main reason for offering a traineeship position. The value of this
information depends on many factors, such as the difficulty in selecting a good
employee, the costs of training and dismissing a bad one, the share of good
candidates in the job pool etc.
2.         The
opportunity to maintain a reputation as a good employer or, more broadly, a
good organisation, even if it may have no immediate hiring need (‘Corporate
Social Responsibility’). This is an element of the corporate strategy.
3.         The
value of the work carried out by the trainee. This can be estimated quite
precisely by the HO on the basis of the trainee’s qualification and experience.
The
main benefits for the trainee are the following:
1.         A
greater chance of being offered a job at the end of the traineeship compared to
an unknown candidate, and the possibility of assessing precisely working
conditions in the event;
2.         The
value of the practical on-the-job training received, which comes at a cost to
the traineeship provider, in the form of time dedicated to form trainees by
qualified employees or trainers;
3.         The
strengthening of one’s job prospects with other firms, consequent to having
completed a traineeship and having thus gained a higher productivity.
4.         Compensation,
if any.
The traineeship agreement
will be concluded if both sides consider that the respective costs are in
balance with the benefits.
Figure 2 Schematic
representation of bilateral benefits in employment and traineeship arrangements
Key: 
The thickness of the arrow represents the importance
of the factor in the work relationship. The colour represents the ease or
difficulty for the counterpart to monitor compliance: 
Gray : easy to monitor
White: difficult to monitor
In a normal traineeship,
work and pay, taken in isolation, play a less important role than in a regular
employment contract. Trainees’ lack of experience translates into low
productivity and correspondingly low compensation, if any is paid at all. Hence
the rationale and advantage of the contract derives much more from the
anticipated value of the other, less tangible, benefits. 
This situation creates
room for market failure. In a traineeship, particularly the value of the benefits
accruing to the trainee is uncertain and difficult to assess in advance
(‘information asymmetry’). The trainee has little possibility of realistically
assessing his or her chance of being hired at the end of the traineeship, or
even whether the traineeship provider intends to hire at all. Equally difficult
is assessing in advance the value of the job training to be received and the
strengthening of prospects with other firms that it will provide. This makes it
possible for an unscrupulous traineeship provider to underdeliver on the
quality of training, i.e. on the job content and on the general conditions of
work. Underdelivering will reduce its costs, without immediately affecting the
benefit the HOs obtains from the trainee’s work, as his or her tasks will be
simple ones that need no training (‘free-riding’).
It is also very difficult
for trainees to screen the quality of the traineeship on the basis of whether
the traineeship is paid or unpaid. Although low quality is more common in
unpaid traineeships, quality unpaid traineeships exist, particularly in case of
technical professions with high training costs or where a large imbalance
between candidates and available positions encourages HOs to minimize
compensation. 
Once the traineeship has
begun, the scope for trainees to lobby effectively for improving the quality of
the traineeship, if it turns out to be deficient, is very limited. Trainees may
initially put up with the situation in the hope that it could improve later.
They may be reluctant to complain out of fear of compromising their employment
prospects; and they have difficulty referring to quality standards because
these often do not exist. They also face a cost in changing companies and the
duration of the traineeship is not very long anyway.
As a result, trainees are
often ‘trapped’ into completing a bad quality traineeship. This will at any
rate give them some kind of positive outcome (i.e. a mention on their CV)
compared to no benefit at all if they abandon the traineeship.
Not only trainees, but
also other companies will have difficulty screening ex post the quality of a
previous traineeship followed by a job candidate. This also contributes to
market failure.
As a result, the
traineeship market is characterized by an equilibrium in which a certain share
of traineeships is substandard. This is in line with survey results, outlined
in Box 1, showing consistently that a share of traineeships of 20-40% is of
insufficient quality. 
Conditions for market
failure to occur 
Intentional under-delivery
of training or imposition of harsher working conditions can occur if the traineeship
provider has no intention to hire and does not care too much about its
reputation, as otherwise its behaviour would undermine the attainment of those
objectives. Such a ‘free-riding’ traineeship provider will have an incentive to
limit its training costs to the absolute minimum, in order to maximize its
profits. For this reason the risk of bad quality is greatest on open market
traineeships, as there is no external control on training quality. 
The market will always
offer some quality traineeships, because even in a deep recession, some
organisations always have hiring needs. However, this share is likely to be
lowest now, because the crisis has affected hiring plans negatively; this
reduces the incentives for offering a quality traineeship. It may also reduce
the attachment of Ho to adhere strictly to CSR principles.
Consequences of market
failure
Cost minimization by free
riders explain both types of problems identified by the studies, i.e. limited
learning content and bad working conditions, as free riders will both want to
minimize the training costs and will also tend to ‘push’ trainees to supply the
maximum possible output. In practical terms, substandard traineeships will be
characterized by very limited training. 
The differences outlined
above have important implications as they make the incentive structure in a
traineeship contract very different from a regular employment contract. The key
difference is that in regular employment the most important elements in the
relationship, work and pay, are relatively easy to monitor for both parties. In
a traineeship, however, while the benefits for the traineeship provider can be
monitored easily (both the quality and quantity of the work and the screening
of the trainees’ qualities as a potential employee are fairly straightforward),
the benefits for the trainee (i.e. mainly the chances of being hired and the
quality of the training), are difficult to assess and monitor. 
The benefits for trainees
are even harder to estimate before the beginning of the traineeship,
when the trainee has to decide whether to accept a proposal or wait for another
offer. The ‘soft’ nature of the quality of the training and the uncertainty
about hiring chances leave the real value of each traineeship, before it
starts, largely unknown. Summing up, the value of the rewards for the trainee
suffers from an asymmetric information problem. This opens the door to
free-riding behaviour on the part of unscrupulous HOs[53]. 
Asymmetric information
prevents the traineeship market from functioning well, which in turn limits
both the number of traineeships and their quality (market failure problem). 
Under current
circumstances HOs have few incentives to improve quality. First, owing to high
demand for traineeships, the traineeship provider is under little pressure to
adopt any quality standard to attract candidates; at any rate it is normally
under no legal obligation to do so. Second, the lack of generally accepted
quality standards does not provide HOs with any guidance as to how to make any
improvements.
Overall, the main
incentives for a company or other traineeship provider to provide good quality
are currently either a) their intention to hire trainees in the near future or
b) their wish to maintain a good reputation as employers or, more generally,
out of respect for Corporate Social Responsibility. An organisation that does
not intend to hire and does not assign a particular value to its reputation may
thus just use traineeships as a source of cheap labour. This set of incentives
and disincentives explain why open market traineeships are more affected by low
quality than the other types of traineeships, where actors with a specific role
in ensuring quality are present.
Box 6 Comparing quality with average
traineeships using data from a quality label experience
 The Italian trainees’ organisation Repubblica degli Stagisti has launched a voluntary scheme, “OK Stage” whereby HOs commit to respect a quality charter formulated by the organisation. The traineeship conditions, published on the site of Repubblica degli Stagisti include commitments on fair treatment. Currently, 36 HOs have adopted the charter. It is interesting to compare the traineeships conditions offered by these quality traineeships with the average for Italy. •              All these traineeships offer remuneration – a minimum of 200 euros per month for student traineeships and 500 euros for traineeships after university graduation. The average net compensation for university graduates amounts to 643 euros per month. In Italy, according to the Repubblica degli Stagisti traineeship organisation (RdS), only 47.6 % of traineeships were paid; note however that while the quality charter calls for compensation it did not specify its level. •              The average hiring rate after completion of the traineeship was 55%, compared to an estimate of 12.3% for traineeships as a whole in Italy (RdS, 2010). The much higher rate of hiring among participants confirms the link between quality and intention to hire on the part of the organisation. 
Trainees complaints are
also largely ineffective in inducing quality improvements in the market because
of incentive problems. Trainees face a cost in changing companies and the
duration of the traineeship is not very long anyway. As a result, they are
often ‘trapped’ into completing a bad quality traineeship, in the hope that
this will at any rate give them some kind of positive return (i.e. a mention on
their CV) compared to nothing - or even a negative signal to potential future
employers - if they quit the traineeship. 
All these factors result
in a long-term equilibrium in which the market is unable to screen out lower
quality traineeships, which may remain on offer indefinitely and which may
coexist with a majority of good quality offers (this mechanism is explained in
more detail in Annex VI; see also Curiale (2010), Edwards, Hertel-Fernandez
(2011). 
Drivers of supply and demand for quality and substandard traineeships
Because trainees carry out
work for an organisation, at a very basic level the supply of traineeship
positions by organisations (ie the demand for trainees) will be subject to
roughly similar drivers as the demand for other types of labour. For example,
if firms are under high demand for their products or services, they will be
likely to open offer more traineeship positions, both because they have more
work to do and because, as outlined earlier, traineeships are often used to
scope for good candidates in view of upcoming hirings, which of course are more
frequent in good times than in a downturn. Error! Reference source not found. on
page Error! Bookmark not defined. confirms the direct relation between the business cycle and the
number of traineeships. More generally, HOs will hire trainees so long as their
marginal and average productivity exceeds marginal and average costs –
including hiring and training costs; this is the same as for regular workers. 
Hence, the supply
of traineeship positions will depend on the total cost of their labour
(computed as the sum of compensation and training costs), on the cyclical
position and on the productivity of trainees. In equilibrium, any policy action
that will increase costs for HOs or reduce the payoff they get from trainees
will reduce the offer of traineeships, and viceversa. The demand for
traineeship positions by young people in turn depends on the perceived payoff
in terms of the compensation and value of the training component. An
improvement in the payoff – for example by making traineeships less risky in
terms of the conditions, or the quality of the learning content, will lead to
increased demand for traineeship positions by young people. 
The impact of the various
options on the number of traineeships of higher and lower quality can therefore
be assessed on the basis of this analytical framework. In particular, HOs
offering quality traineeship are normally interested in aspects such as
effectiveness of training, offering a valid learning environment for the
trainee as a pathway to assessing his or her ability for a job, and creating a
good atmosphere. This is because, as shown by the literature review in section Error! Reference source not found., the
motivators for quality traineeships are typically either prospection for job
candidates, or reputational build-up for the organisation[54]. 
In a quality traineeship
the lower cost paid for the trainee’s working time, compared to a regular employee, 
is a benefit that counter -balances time spent on training and oversight by the
employees’ of the organisation. In substandard traineeships, on the contrary,
the motivator for offering the traineeship is mainly linked with the access to
low-cost labour.  In the latter case the organisation is solely interested
in minimizing costs, be they pay or training costs. Given that the rationale
behind the choices to offer a quality or a substandard traineeship differ, so
will the two types of organisations differ in their response to measures on
traineeships. This is the basis for the approach followed on assessing the
possible options for improving traineeships quality: an effective measure is
one that discourages the offer of substandard traineeships while leaving
unaffected the offer of quality traineeships. 
The impact of the options
can be modelled in a partial equilibrium framework as follows. In the initial
equilibrium E a number T of traineeships is offered at an average cost of C.
Implementation of an option resulting in an increase in transparency of the
payoff for trainees will cause a rightward shift of the demand for traineeships
curve DT to DT’; if there is no change in costs for HOs, the supply of
traineeships curve ST does not shift and a new equilibrium is found at the
intersection of ST and DT’ at the point E’, where a higher number of
traineeships T’ are offered and taken up (see Diagram 1). 
Diagram
1 – Effect of a reform increasing transparency of benefits to trainees on the
number of traineeship positions: equilibrium shifts from E to E’ with a higher number of traineeships
A reform increasing
disincentives for substandard traineeships can be instead represented
graphically as a leftward shift in the ST curve with an unchanged DT curve (see
Diagram 2).
Diagram 2 – Effect of a
reform reducing payoff for substandard traineeship positions (= leftward shift
of S(LQ) curve) : equilibrium shifts to E’ with a lower number of
substandard traineeships T’ (LQ)
 
Compensation and labour
market conditions
Diagrams 1 and 2 also shed
some light on trainee compensation. Average compensation levels are linked to
several factors: one is the characteristics of the trainees and of the traineeship
providers (quality or substandard): A higher marginal productivity of the
trainees – due either to a high human capital or to the fact that the HO
employs the trainees in high-productivity tasks - results in an upward shift in
the ST and hence to higher average compensation (or investment in training). 
On the other hand,
compensation levels also depend on the characteristics of the labour market, in
particular to the general level of labour demand, labour market regulation, the
existence of labour market segmentation, and so forth. High youth unemployment
will tend to increase the number of candidates for each available traineeship
position, while negative growth prospects will induce businesses to curtail
hirings. The Italian supply-side data, showing a high procyclicality of
traineeships, are compatible with the assumption that the majority of trainees
are high-quality (as substandard ones do not have any link with future hirings
and may even be counter-cyclical). 
Figure 3, Figure 4 and Figure 5 illustrate the evolution of
traineeships in Italy in three sectors with increasing degrees of cyclicality,
i.e. services, industry and construction.
Figure 3 Traineeships and employment, Italy,
services, 2005-2011
Figure 4  Traineeships and employment, Italy,
Industry ex-construction, 2005-2011
Figure 5  Traineeships and employment, Italy,
construction, 2005-2011
 
12.11.    Geography
of quality
Table 8 Share of
substandard traineeships by country (various
dimensions)
 % Share of respondents who disagree to statements on the quality of their traineeship || UE 27 || BE || BG || CZ || DK || DE || EE || IE || EL || ES || FR || IT || CY || LV || LT || LU || HU || MT || NL || AT || PL || PT || RO || SI || SK || FI || SE || UK || HR 
 Useful learning content || 10 || 6 || 10 || 14 || 15 || 15 || 6 || 17 || 11 || 9 || 9 || 6 || 17 || 12 || 5 || 7 || 6 || 2 || 10 || 14 || 21 || 7 || 9 || 5 || 3 || 9 || 5 || 7 || 9 
 Useful to find a job || 28 || 16 || 26 || 26 || 18 || 34 || 24 || 14 || 22 || 15 || 33 || 30 || 37 || 22 || 36 || 20 || 19 || 15 || 22 || 32 || 43 || 17 || 13 || 20 || 19 || 64 || 26 || 21 || 28 
 Working conditions (excl. pay) equivalent to those of regular employees || 19 || 13 || 29 || 28 || 26 || 18 || 9 || 10 || 28 || 28 || 16 || 22 || 34 || 31 || 17 || 26 || 54 || 13 || 20 || 17 || 30 || 18 || 12 || 16 || 42 || 21 || 15 || 11 || 20 
 You could turn to a mentor who helped you and explained how to do the work || 9 || 6 || 6 || 14 || 6 || 5 || 5 || 7 || 20 || 21 || 11 || 11 || 15 || 10 || 3 || 8 || 10 || 11 || 9 || 7 || 12 || 4 || 4 || 5 || 12 || 8 || 6 || 6 || 6 
Source:
elaboration from Eurobarometer, Volume A (Results by country), pp. 23-30
12.12     A
voluntary approach to Quality Labels for Traineeships
In
response to concerns about traineeship qualities, in the UK a number of
initiatives have been taken by professional associations, stressing voluntary
adherence to codes of conduct by HOs, particularly regarding open market
traineeships. This type of traineeship has been subject in the UK to no or the
least regulation and little by way of formal quality assurance processes. There
has been an number of voluntary quality charters and frameworks aimed at
providing good practice guidelines to organisations which take on trainees. Two
have had a particularly high profile. 
1.     
In 2009 the UK’s Chartered Institute for
Personnel and Development (CIPD) produced an Internship Charter aimed at
promoting quality traineeships. 
2.     
More recently, on 18 July 2011, a consortium of
60 professional associations launched, with the support of the UK Government, a
voluntary Code of Best Practice for Quality Internships as a way of addressing
concerns about such schemes, including those associated with mandatory
professional training. Although the Code of Best Practice for Quality
Internships touches on trainee remuneration, it does not include it as part of
its best practice principles. Instead, it exhorts employers to comply with the
law whereby trainees, unless classified as volunteers, are entitled to NMW, and
mentions that higher pay might attract higher calibre candidates to
traineeships. 
Both the Internship Charter and the more recent Code are entirely
voluntary and have no legal force. 
The
Code recommendations cover similar quality elements as those identified by the
Traineeship study, such as a written traineeship agreement and a specification
of the nature and content of the tasks. 
■
Preparation – Firms need to think beforehand about the effective use of the
trainee
■
Recruitment – Recruitment practices for trainees should be the same as those
for regular employees. Traineeship adverts should clearly state the trainee’s
roles and responsibilities as well as pay, duration and working hours
■
Induction – All trainees should have a formal induction to the company
■
Treatment – Trainees should be treated the same as regular employees,
integrated into the organisation and given meaningful work
■
Supervision and mentoring – There should be a supervisor with ring-fenced time
in their schedule to work with the trainee. The supervisor should establish
performance and learning objectives, conduct performance reviews and provide
feedback
■
Certification, reference and feedback – Trainees should receive a
certificate/reference letter and have opportunity to feedback to the
organisation on their experience.
Source: http://www.bis.gov.uk/assets/BISCore/higher-education/docs/C/11-1068-common-best-practice-code-for-quality-internships.pdf
12.13.    Summary tables for each option
Table 9 Impacts of Option
1: Information Website
 Measure   || Impact on supply of substandard traineeships || Impact on supply of quality traineeships || How does the option address the problems? 
 Creation of an information website for trainees with all regulations and types of traineeships per MS || 0 Substandard traineeships often already violate regulations ; Stronger awareness of rights by trainee candidates not likely to change much owing to disincentives to complaints and limited payoffs to plaintiffs. Zero or limited cost change for substandard traineeships, hence limited impact.  || 0 Zero cost change for HOs/businesses. High-quality traineeships typically respect existing rules.   || Insufficient learning content || 0/(+) 
 Bad working conditions || (+) 
 Impact on applications for substandard traineeships || Impact on applications for quality traineeships || Lack of or low compensation || 0 
 Impacts :   0 : zero or negligible (+) / (-) : slight  but uncertain + / -: possible ++ / -- : likely +++/--- : very likely || 0/(+) Impact on number of applications nil or even positive as candidates will not be in a stronger position to screen companies. || 0/(+) for domestic traineeships   ++ for transnational traineeships Lower information costs only for transnational t’ships as candidates may find other sources of information for domestic t’ships, but information is scarce for transnational t’ships. 2013 EB on t’ships : 38% of those interested in a traineeship abroad did not go because of lack of information. || Low intra-EU trainee mobility || ++ 
 Overall assessment || Effectiveness : 0 for domestic traineeships;++ for transnational traineeships  Should help development of transnational traineeships but unlikely to change the balance  between substandard and quality. || Efficiency: Only partial solution, but given low cost, could be a useful complement to other options || Coherence: Fully coherent 
Table 10 Impacts of
Option 2: Voluntary Quality Label
 Measure   || Impact on supply of substandard traineeships || Impact on supply of quality traineeships || How does the option address the problems?   
 Option 2:   Quality label for traineeships on a completely voluntary basis   || 0 Substandard traineeships will not apply for the label. If the label is a prerequisite for ESF support to traineeship programmes, it may serve as an incentive to transform substandard traineeships into quality ones. || 0/(+) No change in costs for high quality traineeships; increases reputational payoff for compliant companies, but experience has been that few companies apply. If ESF support to traineeship programmes in linked to the label, it may increase the supply of high-quality traineeships || Insufficient learning content || 0/(+) Uptake likely to be limited 
 Bad working conditions || 0 Uptake zero in substandard traineeeships 
 Impact on applications for substandard traineeships || Impact on applications for quality traineeships || Lack of or low pay || 0/(+) Probably limited uptake/ charter may not cover compensation 
 Impacts : 0 : zero or negligible (+) / (-) : slight but uncertain + / -: possible ++ / -- : likely +++/--- : very likely || 0 Insignificant unless the take-up ratio for the Quality Label is very high (unlikely on the basis of past experiences and current market conditions) || 0 Insignificant unless the take-up ratio for the Quality Label is high. The measure does increase availability of candidates for those companies offering a voluntary quality label but not overall given expected limited take-up rate. || Low intra-EU trainee mobility || (+) Effective on participating companies but impact limited given expected low uptake. 
 Overall assessment   || Effectiveness : (+) Should help the development of transnational traineeships but is unlikely to change the balance between substandard and quality traineeships. || Efficiency Only partial solution, but low cost   || Coherence: Differences amongst labels may create inconsistency and obstacles to mobility 
Table 11 Impacts of
Option 3a: Council Recommendation for QFT 'basic'
 Measure   || Impact on supply of substandard traineeships || Impact on supply of quality traineeships || How does the option address the problems?   
 Compulsory traineeship contract covering : objectives, content, monitoring; duration; compensation ; social security provisions || - Slight decrease likely. Some 'lost' substandard traineeships may reappear as good ones => QFT may stimulate take-up of good practices in bona fide HOs International experience shows that repression of violations is a challenge. Qualitative requirements easy to avoid. || +/++ Some substandard traineeships may be transformed in to good. High-quality t’ships already apply these principles; for the rest, there are only limited compliance costs. SME test : 72% of SMEs already ensure TR agreement and 61% ensure mentoring. Only 5 and 7% resp.ly would have problems ensuring these 2 requirements. || Insufficient learning content || + Should stimulate spread of basic good practices 
 Bad  working conditions || (+) Will raise awareness of rights even if enforcement difficulties 
 Impact on applications for substandard traineeships || Impact on applications for quality traineeships || Lack of  or low pay || 0 It has to be noted that no provisions on the level of remuneration or compensation possible at EU level 
 Impacts : 0 : zero/neglig. (+) / (-) : slight but uncertain + / -: possible ++ / -- : likely +++/--- : very likely || (+)/+ Owing to difficulty of screening quality ex-ante, impact on applications should be roughly equal for substandard and quality traineeships (eg slight increase), unless degree and quality of adoption by HO allows some screening possibilities for trainee candidates || + Domestic traineeships: Positive but modest as greater clarity and guarantee of  recognition stimulate applications ++ Transnational traineeships: Positive : clarity on conditions more important for transnational traineeships || Low intra-EU trainee mobility || ++ Depending on the take-up rate, it will address extreme variety of regulation (including no regulation in some MS), reducing information barriers to mobility 
 Overall assessment   || Effectiveness : + Should help development of transnational traineeships but will not substantially change the balance between substandard and quality ; || Efficiency Low compliance costs, diminishing over time || Coherence: Uneven implementation may not be consistent with mobility objective 
Table 12 Impacts of
Option 3b: Council Recommendation on QFT + Transparency
 Measure   || Impact on supply of substandard traineeships || Impact on supply of quality traineeships || How does the option address the problems?   
 Information on pay in vacancy notice; In case of unpaid t’ship, HO must indicate share of trainees recruited after t’ship in past 3 years || -- Will discourage the offer of substandard traineeship by making it less easy to attract candidates. Will encourage to switch away from substandard towards higher employment ratios, or away from unpaid to paid traineeships. || (+) Depending on market conditions, would generate incentives to transform unpaid to paid traineeships or boost hiring ratios. Compliance costs negligible. SME test: 89% have no problem disclosing info on pay in vacancy notice. || Insufficient learning content || +++ Incentive to shift to paid traineeships will stimulate attention to trainee productivity (not ‘free resource’). 
 Bad working conditions || (-) Shift to paid traineeships might put greater pressure on trainees to be productive. 
 Impact on applications for substandard traineeships || Impact on applications for quality traineeships || Lack of or low pay || +++ Creates incentive to gear traineeships to hirings i.e. long-term orientation. Final impact depends on market conditions => may fluctuate. 
 Impacts : 0 : zero/neglig. (+) / (-) : slight but uncertain + / -: possible ++ / -- : likely +++/--- : very likely || --- Greater transparency will act to reduce applications to bad HOs. ‘Bad surprises’ will be less frequent (only 42% of adverts include pay info || +++ Positive substitution effect from substandard traineeships and from greater trust and confidence. Greater transparency and trust will also cut time devoted to screening offers.  Any increase in paid traineeships => increase in applications || Low intra-EU trainee mobility || + Greater awareness of pay and hiring chances will stimulate applications by foreign candidates. 
 Overall assessment || Effectiveness : ++/+++ Positive. Expected to have tangible effects.   || Efficiency : Measure has practically zero compliance costs for legitimate traineeships and discourages unscrupulous practices. || Coherence : Uneven implementation may not be consistent with mobility objective 
Table 13 Impacts of Option 4: Directive on QFT +
Transparency
 Measure   || Impact on supply of substandard traineeships || Impact on supply of quality traineeships || How does the option address the problems?   
 Information on pay in vacancy notice; In case of unpaid t’ship, HO must indicate share of trainees recruited after t’ship in past 3 years || -- Will discourage the offer of substandard traineeship by making it less easy to attract candidates. Will encourage to switch away from substandard towards higher employment ratios, or away from unpaid to paid traineeships. || (+) Depending on market conditions, would generate incentives to transform unpaid to paid traineeships or boost hiring ratios. Compliance costs negligible. SME test: 89% have no problem disclosing info on pay in vacancy notice. || Insufficient learning content || +++ Incentive to shift to paid traineeships will stimulate attention to trainee productivity (not ‘free resource’). 
 Bad working conditions || (-) Shift to paid traineeships might put greater pressure on trainees to be productive. 
 Impact on applications for substandard traineeships || Impact on applications for quality traineeships || Lack of or low pay || +++ Creates incentive to gear traineeships to hirings i.e. long-term orientation. Final impact depends on market conditions => may fluctuate. 
 Impacts : 0 : zero/neglig. (+) / (-) : slight but uncertain + / -: possible ++ / -- : likely +++/--- : very likely || --- Greater transparency will act to reduce applications to bad HOs. ‘Bad surprises’ will be less frequent (only 42% of adverts include pay info || +++ Positive substitution effect from susbtandard traineeships and from greater trust and confidence. Greater transparency and trust will also cut time devoted to screening offers.  Any increase in paid traineeships => increase in applications || Low intra-EU trainee mobility || +++ Greater awareness of pay and hiring chances will stimulate applications by foreign candidates. Will be effectively implemented in all MS, given its binding nature, multiplying impact. 
 Overall assessment || Effectiveness : ++/+++ Positive. Expected to have tangible effects.   || Efficiency : Measure has practically zero compliance costs for legitimate traineeships and discourages unscrupulous practices. || Coherence : EU-wide implementation ensures best consistency with mobility objective 
[1]               Amongst respondents of the 2013 Eurobarometer survey
(when published in October 2013 add ref), 74% more young people followed a
traineeship than an apprenticeship ; the share was  77%  more than a
student job and 43% more than those who had none of these experiences.
Source : Commission elaboration of Eurobarometer Volume B, responses to
Q1, page 1.
[2]               EP 2009/2221(INI), 06.07.2010
[3]               See the Conclusions of three recent European
Councils: December 2012, February 2013 and June 2013.
[4]               SWD(2012)407 final, Brussels 5.12.2012
[5]               SWD(2012)407 final, Brussels
5.12.2012
[6]               European Commission (2012a), Study
on a comprehensive overview on traineeship arrangements in Member States (henceforth “the Traineeship study”),
available at http://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=6717&visible=1.
[7]               The classification is the one
suggested in European Commission (2012a), Study on a
comprehensive overview on traineeship arrangements in Member States (henceforth “the Traineeship study”),
available at http://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=6717&visible=1. 
[8]               In addition, while this Impact Assessment treats the
term internship as a synonim to traineeship, in some countries, e.g. the U.K. a
distinction is drawn between in-studies traineeships and post-studies
internships. In the U.S. the term usually utilised is ‘internships’. See also
footnote 11.
[9]               See section 4.4. for more detail on transnational
traineeships.
[10]             See Annex II and Traineeship study, pp. 45-50 for
details.
[11]             In the UK the use of terminology relating to
traineeships is somewhat different: A 2013 UK government initiative, not
covered in Table 1, uses the
term traineeship to refer to a period of training, including a work placement,
that prepares young people aged 16 – 24 for an apprenticeship or a sustainable
job (Department for Education/Department for Business Skills and Innovation
(2013). This use of the word is closer in meaning to a period of Vocational
Education and Training.
[12]             Art. 6 of decree of 29 August 2006 implementing art. 9
of law 2006-396, of 31 March 2006.
[13]             SWD(2012)407 final, Brussels
5.12.2012
[14]             According to the UK Low Pay Commission in its report on
National Minimum Wage (2011), traineeships are de facto becoming a
precondition for more and more jobs, 
[15]             The French Economic, Social and Environmental Committee
("Conseil économique, social et environmental) estimates that the number
of traineeships increased from 600,000 to 1,6 million between 2006 and 2012,
[16]             These differences might be due on the one hand, to a
positive bias in the Eurobarometer survey (respondents answering a ‘cold call’
on previous life experiences might be unwilling to report that such experiences
were useless or uninteresting) and on the other to negative sample selection in
surveys administered by trainees’ advocacy groups. On account of these opposing
biases, it seems likely that the true extent of problems lies somewhat above
the level indicated by the Eurobarometer and below the one highlighted by previous
studies.
[17]             In the case of the randomly selected traineeship. The
share for the last traineeship is lower, as their quality tends to be higher,
probably owing to better selection.
[18]             As for no or low pay, about half of the traineeships
are unpaid and a further 25% do not provide enough compensation to cover basic
living costs. Regarding transnational traineeships only 9% of all traineeships
take place in another country. Uncertainty about conditions abroad plays an
important role in preventing the development of the transnational traineeship
market: according to the Eurobarometer survey, among those who have not had the
opportunity to go on a traineeship abroad but would have liked to, 38%
indicated that lack of information was the main obstacle.
[19]             Eurobarometer, Volume B, Q2, p. 4.
[20]             Cfr. the 23% share of SMEs
that don not provide a written contract, although this would not cause them any
problem, and the 32% of SMEs that currently don't provide a mentor but would be
ready to do so.
[21]             It seems difficult to conceive that substandard working
conditions could be offered unintentionally, therefore this explanation can
refer only to substandard learning content.
[22]             The cyclical effect in the labour market worsens the
situation in contributing to the asymmetric information and lack of incentives
for complaints.
[23]             Directive 89/391/EEC.
[24]             www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/131388.pdf
[25]  For traineeships in the regulated professions, the legislative
proposal amending Directive 2005/36/EC foresees the introduction of a
compulsory recognition mechanism.
[26]             www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/131388.pdf
[27]             Since these are all very recent
initiatives, there are no evaluations about their effectiveness. However
similar regulatory approaches in the US seem to have a limited effectiveness. (Curiale, 2010); while voluntary schemes’
effectiveness is limited by low take-up rates (in Italy,
a few dozen companies have applied for the OK stage label, a take-up rate in
the order of magnitude of 1 in 10.000).
[28]        During the public consultations several employer
organisations showed sympathy towards a QFT
within a quality label.
[29]             
[30]             
[31]             Flash Eurobarometer 378, section 2.1.3, p. 36.
[32]             Likewise, the study excludes from this recommendation the
so-called "traineeship programmes" for recruitment at higher levels
of management.
[33]             Given that it is difficult to
assess how many will, the assessment summarised in the Impact Tables in the
Annex 12.13 is to be understood as the effect in each adopting Member State.
[34]             This suggests that a large share of traineeships is
'unintentionally' substandard: one in four SMEs do not provide a written
agreement just because they are unaware of the mutual benefits that such a
contract can offer.
[35]             One might conjecture that after adoption of a QFT,
Member States authorities might step up inspection. This however appears highly
speculative and is hardly in line with US experience. 
[36]             Cfr. the 23% share of SMEs
that don not provide a written contract, although this would not cause them any
problem, and the 32% of SMEs that currently don't provide a mentor but would be
ready to do so.
[37]          See http://www.youthforum.org/news/pressroom/#
[38]          The public consultation confirmed that there is a wide
agreement regarding the proposed quality elements, even on the side of
employers as long as there is no compulsory pay and social protection coverage.
[39]  It should be noted that like all other options, this would not
apply to traineeships organised by schools, universities and other learning
institutions prior to graduation.
[40]  The fact that announcement of remuneration in the vacancy notice is
not required for regular jobs is not a valid argument against this measure. In
a regular job, remuneration is a major determinant of the transaction and both
parties generally have incentives to foster a transparent long-term
relationship; this is absent in low-quality traineeships where the employer
simply exploits the lack of transparency to extract a short-term benefit. Any
analogy with job advertisements is therefore misleading.
[41]             Member States should consider exempting public bodies
from the transparency in hiring requirement, given that their hiring policies
are regulated by law.
[42]             In theory, an organisation with low hiring ratios could
also choose to no longer propose unpaid traineeships at all, to avoid the
disclosure requirement. This would result in a decline in the supply of the
traineeships offered. However, given the low remuneration levels for
traineeships, this outcome appears unlikely for high-quality traineeships,
given the statistically strong link between quality, hiring intentions and
remuneration.
[43]             We do not possess information about the average
compensation of trainees for the EU as a whole. The guidelines for traineeships
in Italy presented at the end of 2012 prescribe a monthly remuneration of 400
euros (before tax).
[44]        The Directive cites as grounds for justification the
emergence of new types of employment relationships, the diversity of Member
States legislation on information requirements; the need, stipulated in Art 117
of the Treaty, to promote improved working conditions and an improved standard
of living for workers (not only for employees), so as to make possible their
harmonization; and the  requirement by point 9 of the Community Charter of
Fundamental Social Rights for workers, which states that it is necessary to
establish at Community level the general requirement that every employee must
be provided with a document containing information on the essential elements of
his contract or employment relationship. 
[45]             Such information does not explicitly include
information regarding mentors, monitoring, social security etc (Art 2).
[46]        Therefore, this Directive is not applicable to trainees in
the Member States which do not consider them as paid employees having a
contract or employment relationship. The Directive also explicitly excludes
from its scope employees whose contract lasts less than one month, working less
than eight hours a week, or having a casual and specific nature that results in
its non-application be justified by objective considerations.
[47]        Several elements need to be taken into account in this
regard including the lack of transparency and extent of abuse experienced by
trainees against the background of the reasons having led to the adoption of Directive
91/533/EEC (see footnote 35 above). It is worth noting that the Eurobarometer
results indicate that 71% of traineeships last more than one month.
[48]             The public consultation indicated that a Directive is
likely to enjoy less acceptance – at least from the part of certain employer
organisations and even some Member States – than a Council Recommendation.
[49]             The recent UK Common Best
Practice Code for High-Quality Internships states that greater access to
high-quality traineeships can help an organisation meet its CSR objectives by
promoting social mobility and diversity in the professions. In a similar vein,
in both the Netherlands and Slovenia, the AIESEC traineeship programme also
explicitly links the offer of quality traineeships with the promotion of a
positive and strong employer brand and CSR which, in turn, can enhance an
organisation’s attractiveness to the best talent.
[50]             Unfortunately, no studies quantifying training costs
could be identified. Edwards and Hertel-Fernandez (2010, p. 5) provide two
examples which can be taken to represent a plausible range of training costs
for the US (US$ 400 and US$ 3500). In a more dated contribution, McCaffery
(1979) estimated the total direct costs of one specific traineeship programme
at US$ 2000 per trainee.
[51]             These are Chamber of Commerce data contained in the
Excelsior database. The Italian Chambers of Commerce have kindly supplied the
Commission with some further disaggregated data for analytical purposes.
[52]             Report of the French Economic, Social and Environmental
Committee ("Conseil économique, social et environmental) on youth
employment, Jean-Baptiste Prévost, Septembre 2012.
[53]             This phenomenon is explained in more detail in last
year’s Analytical Document: see Annex VI, p. 53, SWD(2012) 407 final. 
[54]             This is also confirmed by the procyclicality of
traineeship numbers, so long as (highly cyclical) quality traineeships are more
numerous than the (presumably less cyclical, or anti-cyclical) substandard
traineeships.