EU Flexicurity Strategy: How will the EU policies affect Belgian and French dismissal protection

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10839933

L.L.M. International and European Labour Law

MASTER THESIS INTERNATIONAL AND EUROPEAN LABOUR LAW:

EU FLEXICURITY STRATEGY: HOW WILL THE EU POLICIES AFFECT BELGIAN AND FRENCH DISMISSAL PROTECTION?

Supervisor: B. Ter Haar

University of Amsterdam Academic year: 2014-2015

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TABLE OF CONTENT

PART 1: FLEXICURITY: FROM A THEORICAL OPEN ENDED TERM TO THE NEED OF

MORE CONSISTENCY p. 3

I. NATIONAL NEOLOGISM INSPIRES THE DEVELOPMENT OF A EU

STRATEGIC POLICY p.3

I.1. Domestic roots: The Netherlands and Denmark p.4

I.1.1. The Dutch Miracle p.4

I.1.2. The Danish Golden Triangle p.6

II. THE PURSUIT OF THE NEXUS AT EU LEVEL p.7

II.1 History of a strategy: the role of the European Employment Strategy p.7

II.1.1.1 1990’: Need to modernize the European Labour Market p.7

I.2.1.1 a) European Employment Strategy p.7

I.2.1.1.b) EES’s Operation and results: A facilitative institutional

framework p.9

II.1.1.2. EU 2020: Reaching an inclusive growth – Flexicurity as an indispensable

tool p.9

II.2 Implementing Flexicurity: EU Strategy in action p.11

II.2.1. Transplanting Flexicurity Across Institutional Contexts: Not self-evident p.11 II.2.2.1 a) Prerequisite and Conditions to the success of Flexicurity p.11

II.2.2.1 b) Four components of Flexicurity p.13

II.2.2 Tackling diversity within Member States’ social models: Common principles

of Flexicurity p.14

II.2.2. a) EU’s convergence strategy through the development of common

principles of Flexicurity p.14

II.2.2.2 b) Flexicurity Pathways p.15

III. CONCLUSION – UPCOMING FLEXICURITY CHALLENGES p.18

III.1: Weaknesses of the strategy p.18

III. 2 More effective EU coordination process between the various policy

fields p.19

PART 2: EMPLOYMNENT PROTECTION LEGISLATION IN THE MEMBER STATES: RATIONALES UNDERLYING THE EXISTING DISMISSAL PROTECTION p.20

I. EMPLOYMENT PROTECTION LEGISLATION p.20

I. 1. Notion and definition p.20

I.2 Domestic Employment Protection Legislation p.22

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I.2.2.Consequences of strict EPL framework: p.23

II. A CROSS-COUNTRY COMPARISON: DOMESTIC EMPLOYMENT LEGISLATION PROTECTION ENHANCING FLEXICURITY IN BELGIUM AND

FRANCE p.23

II.1.French and Belgian choice of EPL and employment performance p.24

II.1.1 Belgium p.24

II.1.2 France p.25

II.2. Embracing Flexicurity: Evolution of French and Belgian EPL’s? p.26

II.2.1: Belgium p.26

II.2.2: France p.28

III EU’s progress and achievements: What tools could be used to create

more convergence? p.28

III.1: Alternative strategies to create more convergence p.28

III.1.1 Common floor of rights p.29

II.1.2 The protection of precarious workers p.29

II.1.3 The definition of common principles of law p.30

III.2: Towards a European open ended contract? p.32

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PART I: FLEXICURITY: FROM A THEORICAL OPEN ENDED TERM TO THE NEED OF MORE CONSISTENCY

The interaction and the issue of influence between the European Employment Strategy and the Member States are double edged. On the one hand, the Employment Strategy is having an impact on the discourse within the Member States over the appropriate path to take to combat unemployment and increase employment but at the same time, policies in Member

States are filtering up to the EU level.1

Considering this statement, analyzing the whole development of flexicurity involves the interaction of both national and European policies making it thus difficult to identify the starting point. Some commentators may be tempted and inclined to speak of old wine in new bottles, arguing that “flexicurity” is nothing but a rephrasing of the traditional labour-capital nexus2. Consequently, relying on the growing similarities between domestic and European policies and philosophies underlying these labour market state reforms, we will devote this first part to the analysis of this new nexus (emergence, development, enforcement) within European and national systems of industrial relations and labour law.

By the mid-1990’s the European Union was becoming increasingly concerned about the high levels of unemployment in Europe, drawing comparisons with the US where the rate of

unemployment was lower than the European average, and the rate of jobs creation higher3.

In conclusion, the debate on how EU labour market should be modernized is complicated,

not only from a technical point of view, because of the many variables involved but especially

because it is politically sensitive.4

I. NATIONAL NEOLOGISM INSPIRES THE DEVELOPMENT OF A EU STRATEGIC POLICY

Flexicurity can be regarded as old wine in new bottle. The Community has not invented a new buzz-word, it has genuinely modernized and Europeanized the nexus –flexibilty, security- at the supranational level, embracing domestic conceptions and pathways.

1_{D. Ashiagbor, 'The influence of the European Employment Strategy on Member States' employment policies,}

regulatory strategies and labour law ' in Paul Davies (eds), The European Employment Strategy: Labour Market

2_{T. Wilthagen & F. Tros, 'The concept of "flexicurity": a new approach to regulating employment and labour}

markets' [2014] Transfer 166, 173

3_{Scharpf, Governing Europe: Effective and Democratic? (OUP, Oxford, 1999) p.123;}

4_{European Expert Group on Flexicurity, Flexicurity Pathways: Turning hurdles into stepping stones (1st,}

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Dutch and Swedish framework are usually given in example as many similarities can be highlighted in the EU “handbook” providing the strategy for EU2020.

Consequently, comes the necessity to first roughly analyze the content and concept at domestic level to introduce the reader to what is flexicurity.

I.1. Domestic roots: The Netherlands and Denmark

In the early 2000s, the Danish and Dutch cases have been used as “best practices” models providing a blueprint for European labor markets5_{. According to the conventional division of}

EU Member States into four distinct institutional social models, Denmark belongs to the social democratic model and Netherland is part of the continental European model. In this regard, the analysis of the functioning of flexibility in those two models is extremely relevant for two reasons. First it points out that flexicurity is not the prerogative of a single model. It weakens the argument of historically divergent European social models that constitute the main obstacle for the adoption of common principles (cfr supra). Second it rises the underlying research question of how transferable are domestic Flexicurity policies to other countries and to what extent will that the structure of the domestic labor market6.

I.1.1. The Dutch Miracle

The neologism of flexicurity originates in the Netherlands in begin of the 90’, its “father” was the Dutch Sociologist Hans Adriaansens who defines the concept as following7_:

“ A policy strategy that attempts, synchronically and in a deliberate way, to enhance the flexibility of labor markets, work organization and labor relations on the one hand, and to enhance security- employment security and social security- notably for weaker groups in and

outside the labor market, on the other hand.”8

In other words, the determination of Flexicurity promises the best of both worlds. It appears as a policy strategy that addresses the pitfalls of flexibility by striking a balance between the

5_{A. Kornelakis,'Balancing Flexibility With Security in Organizations? Exploring the Links between Flexicurity and}

Human Resource Development' [2014] Human Resource Development Review 398, 405

6_{A. Kornelakis, 'Balancing Flexibility With Security in Organizations? Exploring the Links between Flexicurity and}

Human Resource Development' [2014] Human Resource Development 398, 405

Human Resource Development' [2014] Human Resource Development 398, 404

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organization’s demands for flexibility with the employees’ needs for security9_{. Nevertheless,}

this term describes the direction of labour market reforms, the type of conscientious policy strategy that needs to be followed. The neologism of Flexicurity can’t thus be regarded as the outcome of the labour market10.

Traditionally, the preventive nature of the “dual” system of Dutch dismissal law was the cause of much labour market inflexibility and immobility. Indeed employers have to address either the Centre for Work and Income to ask for a permit before any notice to terminate the employment contract can be given or they have to file a request at the lower courts, requiring dissolution of the employment contract for “serious cause”. The existence of this “dismissal permit” triggered a major “burden to business” and hampered the further need of a more flexible labour market11.

In 1995, the Dutch Minister of Social Affairs and Employment released a Memorandum containing a set of proposals to modify the dismissal protection enjoyed by employees in

standard employment relationships, abolishing the permit system for temporary work agencies in respect of their placement activities and enhancing the legal position of

temporary agency workers12_{. These will to modernize and adapt the national legal framework}

combined with the joint effort and commitment of the Trade Unions structurally render the Dutch Labour market and especially the employment policy more flexible and modular13_. As a result, the practical outcome of flexicurity strategy in the Netherlands was on the one hand to facilitate the use of part-time and temporary employment and on the other hand strengthening the employment security for those atypical forms of work. In this regard, legislative measures triggering a limited relaxation of their job protection were adopted that ultimately increase numerical flexibility14.

In 2014, following this endless quest of a “more flexible labour market”, the current dismissal legislation was reviewed. The new Wet Werkloosheid en Zekerheid basically simplifies the actual routes leading to a valid termination of the contract. Coming into force on the 1st_of

July 2015, the “dismissal with permit” route becomes the exception and only remains for certain grounds of dismissal (economic reasons, long-term inability to work) while a new

Human Resource Development' [2014] Integrative Law Review 398, 404

12_{Flexibiliteit en Zekerheid, December 1995}

14_{M.Mailand, 'The common European Flexicurity principles: How a fragile consensus was reached' [2010] E.J.I.R}

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general and residuary route for dismissal is adopted, notice period requiring written agreement from the worker becomes the favored route to put an end to the existing relation15_.

The Dutch authorities argue that the main purpose underlying this “adaptation”16 was to create a more simple, quicker and cheaper dismissal legislation17_.

I.1.2. The Danish Golden Triangle

Although the paths followed by the latter are inspired by the same ultimate goal as its neighbor the Netherlands, Denmark is characterized by a original clear trade-off between a high level of external- numerical flexibility and a high level of income and (increasingly) work security18_{. Traditionally, the Danish framework offers little dismissal protection to the workers}

with a high-income protection balanced with the security to find a new job quickly and producing the type of labour supply the market demands. In other word the low dismissal

protection (flexibility) combined with active and dynamic labour market policies and unemployment security in the form of a guarantee for a legally specified unemployment

benefit at a relatively high level - up to 90% for the lowest paid workers is known as the famous Danish Golden Triangle19. Analyzing this model can convince most of the critics that flexicurity is per se achievable in every environment by the single meeting of the three “sides” of the triangle.

The Danish example teaches us that the functioning of flexicurity is far from self-evident and relies on an indispensable prerequisite: well-functioning institutional complementarities20_{. The}

latter arose not by design but rather through the strategies of actors working within the institutions. The required components of flexicurity were not meant to form a system at the time of their conception, over time they have been rendered complementary by the way actors ‘act out’ the institutions21_.

15_{Wet Werkloosheid en Zekerheid}

16_{English translation of the word “aanpassing”}

17_{Communication from the Dutch Government about the adaptation of the right to dismiss of employer:}

“Het ontslagrecht wordt eenvoudiger, sneller, eerlijker en minder kostbaar voor werkgevers. Vanaf 1 juli 2015 komt er 1 vaste ontslagroute. Bedrijfseconomisch ontslag en ontslag door langdurige arbeidsongeschiktheid gaan via het UWV. Ontslag om andere redenen gaat via de kantonrechter.

Vanaf 1 juli 2015 hebben alle werknemers onder bepaalde voorwaarden recht op een transitievergoeding,

http://www.rijksoverheid.nl/onderwerpen/wet-werk-en-zekerheid/aanpassingen-wet-werk-en-zekerheid

18_{Ibidem, 177}

19_{Burroni and Keune, 'Flexicurity: A conceptual critique' [2011] E.J.I.R 75, 82;}

http://denmark.dk/en/society/welfare/flexicurity/

20_{Streeck W., 'On institutional conditions of diversified quality production' in Matzner E and Streeck}

W.(eds), Beyond Keynesianism. The Socio-economics of Production and full Employment. Aldershot; Edward Elgar 1991

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II. THE PURSUIT OF NEXUS AT EUROPEAN LEVEL

II.1 History of a strategy: the role of the European Employment Strategy

II.1.1 1990’: Need to modernize the European Labour Market

Since the early 90, the labour market situation in European Union faces important challenges; excessive unemployment rates in most Member States, urgent need to modernize the working relationships, securing and improving protection for the atypical working agreements, … Besides, the trust of the European citizens in future employment opportunities, in the development of human capital, in decent work and labour market developments urgently needs to be strengthened22_{. Relying on this urge, the promotion of}

flexibility and security at European level was given a legal basis through several provisions of the European Treaty –notably Articles 125-127 of the Treaty of Amsterdam-. They oblige the EU to promote both the adaptability of workers and labour markets as well as high levels of employment.23

The question for a new equilibrium, facilitating and enhancing the adaptability and capacity to deal with change of both individuals and companies was underlying the strategic debate entered the academic and political discourse in the late 1990s. In this context, flexicurity was put forward as it aims to reconcile the strong demand for further flexibility of the labor market with an equally strong demand for protection of employees, especially vulnerable employees24_{. The developers strongly believe that the reach of this new equilibrium will}

create win-win situations to the benefit of both employers and workers25.

II.1.1 a) European Employment Strategy

The European development of flexicurity cannot be properly understood without emphasizing the role played by “advocacy coalition”. Actors – Member States, representatives from Trade Unions at national and European level, EU’s bodies and agencies, …- gathered together in coalition because they share a common belief system shaped by values, priorities

Commission, Brussels 2007) 42

24_{Burroni and Keune, 'Flexicurity: A conceptual critique' [2011] E.J.I.R 75, 77}

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and casual assumptions and they seek to modify the actual framework by influencing government in specific policy areas26_.

Employment being a “shared competence” between the Community and national levels, it is consistent with the principle of subsidiarity. EES represents an effort to promote greater convergence of national employment policies while at the same time respecting national diversity27_{. Following this conception, Article 145 TFEU}28_{states the concept of “coordinated}

strategy” and through the reading of the following provisions found under the employment title. It clearly establishes that Member States are the main actors.

They are required to co-ordinate their domestic policies for the promotion of employment, in a consistent way with the broad economic guidelines laid down within the framework of EMU29_{. Article 147 TFEU circumscribed competence and lays down the subsidiary role of the}

Community. It recalls its “encouraging and supporting” competence and reminds the Community to complement actions after having respected “the competence of the Member States”.

The Amsterdam Treaty, under the new Employment Title, following the current trend to modernize employment and labour market policies - part of the priorities set out in the Lisbon strategy- , shaped this advocacy coalition.

Each year, following the Commission’s proposal, the Council adopts common European employment Guidelines by a qualified majority vote30. Although not legally binding, this individual recommendation is expected to have a strong political influence on the State’s future conduct as it is considered as a warning for failure to comply with the guidelines31_.

Consequently, the role of the Community is not as subsidiary as it would appear from the reading of Article 128 dealing with monitoring and reporting Member States activities32.

241, 243

27_{Ibidem, p.123}

28_{Member State and the Union shall, in accordance with this Title work towards developing a coordinated}

strategy for employment and particularly for promoting a skilled trained and adaptable workforce and labour market responsive to economic change with a view to achieving the objectives defined in Article 3 of the Treaty on the European Union“

29_{Article 148(2) TFEU; C. Barnard, 'The employment title and the Lisbon Strategy: Law-making in the field of}

Social Policy' in C. Barnard (eds), EC Employment Law (1st, Oxford Press university, Oxford 2005).

30_{J. Goetschy, 'The European Employment Strategy, Multi-level Governance, and Policy Coordination: Past,}

Present and Future' in J. Zeitlin and D. Trubek (eds), Governing Work and Welfare in a New Economy (1st, Oxford Press, Oxford 2003).

31_{Deakin and Read, “Between Social Policy and EMU: the New Employment Title of the EC Treaty” in Shaw (ed),}

Social Law and Policy in an Evolving European Union (Hart Publishing Oxford, 2000); C. Barnard, 'The

employment title and the Lisbon Strategy: Law-making in the field of Social Policy' in C. Barnard (eds), EC

Employment Law (1st, Oxford Press university, Oxford 2005). .

32_{C. Barnard, 'The employment title and the Lisbon Strategy: Law-making in the field of Social Policy' in C.}

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II.1.1.b) EES’s Operation and results: A facilitative institutional framework33

Consequences and impact of the successive EES’s actions and plans are mixed.

Whereas it can be argued that most plans often consist of a mere list of discrete initiatives that Member States already had in stock, lacking overall integration and coherence among the four different pillars34_{and making thus policy progress slow and less visible, it is also true}

that while drafting incentives measures and actions, ESS has to deal with regional and national employment disparities and strategies that jeopardize the adoption of coordinated strategy and the creation of synergy between the various ministries involved in the E.E.S35. Nevertheless, ESS is now a subject of EU ‘high politics’ and has to be regarded as an interplay among different levels of governance. Multi-level governance implies an enabling of lower levels and opening of new fora that requires new coordination functions and involves a multiplicity of actors. Consequently, following the Lisbon Summit, multi governance in reference to the EES means not only actions at various level but also better coordination of the EU employment guidelines with other policy fields. This coordination is usually achieved through the use of the Open Method of Coordination (OMC) that serves as procedural and institutional solution for addressing national social priorities at the EU level while preserving national diversity36.

In this regard, scholars suggest that the institutional framework put in place by the Employment Title is facilitative rather than prescriptive. In other words, harmonizing rules are

ruled out and, in their place, is a process of benchmarking, peer review, and multilateral surveillance creating a soft policy co-ordination and sort of business oriented model of

‘management by objective’ that aimed at delivering targets within a given timeframe.37

II.1.2. EU 2020: Reaching an inclusive growth – Flexicurity as an indispensable tool

33_{Ibidem, p. 124}

34_{Since the Luxembourg summit of 1997, the annual European employment guidelines have been organized}

under four pillars; improving employability; developing entrepreneurship, encouraging adaptability bor for employees and businesses and strengthening equal opportunity policies.

35_{B. Bercusson, “The European Employment Strategy and the EC Institutional Structure of Social and Labour}

Law.”, SALTSA-Arbetslivinstitutet Seminar, October 9-10, 2000, Brussels.; M. Biagi, “The impact of European Employment Strategy on the Role of the Labour Law and Industrial Relations”. The international Journal of

Comparative Labour La wand Industrial Relations, 16/2: 155-73; C. Barnard, 'The employment title and the Lisbon

Strategy: Law-making in the field of Social Policy' in C. Barnard (eds), EC Employment Law (1st, Oxford Press university, Oxford 2005).

Present and Future' in J. Zeitlin and D. Trubek (eds), Governing Work and Welfare in a New Economy (1st, Oxford Press, Oxford 2003)

37_{Deakin and Read, “Between Social Policy and EMU: the New Employment Title of the EC Treaty” in Shaw (ed),}

Social Law and Policy in an Evolving European Union (Hart Publishing Oxford, 2000); C. Barnard, 'The

employment title and the Lisbon Strategy: Law-making in the field of Social Policy' in C. Barnard (eds), EC

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The requirement for more flexicurity in EU and national employment guidelines was born in the frame of the Lisbon strategy, adopted in the begin 90 that will later be renamed “EU 2020 for a smart, sustainable and inclusive growth”. National social partners were invited to negotiate agreements to modernize work organization thanks and by reaching a better balance between flexibility and security38_.

It acquires a central position and a substantive status in EU dialogue through the redaction of the Green Paper on Employment Law and the 2006 Spring European Council39_{. Both}

stressed the importance to develop comprehensive policy strategies to improve the

adaptability of workers and enterprises40. Member States were encouraged to adopt, in

accordance with their individual labor market situations, reforms that would structurally modify the labor and social environment under an integrated flexicurity approach41.

Europe is facing a moment of transformation. The crisis has wiped out years of economic and social progress and exposed structural weaknesses in Europe's economy. In the meantime, the world is moving fast and long-term challenges – globalisation, pressure on resources, ageing – intensify. The EU must now take charge of its future42_{. In 2010, relying}

on the exposition of the structural weaknesses of Europe, the Commission drafted a plan listing the goals and trajectories the organization commits itself to follow and achieve by 2020. EU 2020 strategy aims to reinforce smart, sustainable and inclusive growth throughout the adoption of policies, strategies and flagship initiatives fixing EU headline targets both concerning economic and social integration43_.

38_{T. Wilthagen, S. Bekker & S. Klosse, 'Making (it) work: Introduction to the special issue on the future of the}

European Employment Strategy' [2007] I.J.C.L.L.I.R 489, 489; M.Mailand, 'The common European Flexicurity principles: How a fragile consensus was reached' [2010] E.J.I.R 241, 244

241, 245

40_{Council Recommendation of 12 July 2005 on the broad guidelines for the economic policies of the Member}

States and the Community (2005 to 2008) (2005/601/EC) and Council Decision of 12 July 2005 on Guidelines for the employment policies of the Member States (2005/600/EC)

41_{For more information on the European process of flexicurity see the integral tekst of M.Mailand, 'The common}

European Flexicurity principles: How a fragile consensus was reached' [2010] E.J.I.R 241, 245

42_{Communication from the Commission on Europe 2020 “ A strategy for smart, sustainable and inclusive growth”,}

3 of March 2010, 5

43_{The EU needs to define where it wants to be by 2020. To this end, the Commission proposes}

the following EU headline targets:

– 75 % of the population aged 20-64 should be employed. – 3% of the EU's GDP should be invested in R&D.

– The "20/20/20" climate/energy targets should be met (including an increase to 30% of emissions reduction if the conditions are right).

– The share of early school leavers should be under 10% and at least 40% of the younger generation should have a tertiary degree.

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The achievement of these targets being crucial for the overall success, the Commission proposes that EU goals are translated into national targets and trajectories44_{to ensure that}

each Member State tailors the Europe 2020 strategy to its particular situation.

Pursuing the aim of an “inclusive growth”, EU is fostering a high-employment economy delivering economic, social and territorial cohesion. The Commission deeply believes in a necessary modernization of the labour market, in order to make full use of the labour potential45_{. Therefore, one flagship initiative relies on the improvement of the employment}

rate in Europe. Commission is pointing out that only two-thirds of our working age population is currently employed, compared to over 70% in the US and Japan. By 2020, the employment rate of the population aged 20-64 should increase from the current 69% to at least 75%, including through the greater involvement of women, older workers and the better integration of migrants in the work force46. Undertaken actions will thus require modernizing and strengthening employment education and training policies as well as social protection systems.

Therefore, integrated flexicurity policies play a key role to increase labour participation and to reduce structural unemployment and contribute to the achievement of the 75% employment rate target set by the Europe 2020 Strategy47_.

II.2 Implementing Flexicurity: EU Strategy in action

II.2.1. Transplanting Flexicurity Across Institutional Contexts: Not self-evident

2.2.1 a) Prerequisite and Conditions to the success of Flexicurity

The transferability of Flexicurity is not straightforward, as some pathways appear readily applicable to some countries than others48_{. Flexicurity being a relatively new area of}

research, it is not yet possible to give well-founded and accurate statement on the conditions and effects of the strategies developed to encompass the new.

3 of March 2010, 5

3 of March 2010, 17, « Inclusive growth means empowering people through high levels of employment, investing

in skills, fighting poverty and modernising labour markets, training and social protection systems so as to help people anticipate and manage change, and build a cohesive society”

3 of March 2010, 10

47_{http://ec.europa.eu/social/main.jsp?catId=102}

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Nevertheless, relying on the Dutch and Danish examples, it is possible to argue that their success mostly depends on the extent to which new measures are perceived as serving the interests of the most prominent parties involved49. Member States lacking tradition and platform for coordination, consultation and negotiation seem to be at a disadvantage when it comes to producing flexibility-security trade-off50_.

Trust and fertile grounds for consultation and negotiation involving both the workers and the employers are two major factors that would ensure that future flexicurity measures wouldn’t be met with strong opposition and mistrust. Extending the scope for collective bargaining and the decentralization of labour market policies lead to an increase in the range of trade-off and combination options with respect to flexibility and security51. This assessment is sustained by the Dutch and Danish example (cfr supra) where both systems are equipped with broad negotiation agendas that contributed to the achievement of a relatively high level of balance between flexibility and security. Three elements can be pointed out to increase the range of trade-off and combination option with respect to flexibility and security.

First, the acknowledgment of institutional complementarities appears to be a pre condition for the enforcement of flexicurity. Indeed, the reforms paths in the labour market and welfare arena of many European countries show that cases of well-functioning complementarities are rare, while example of uncoordinated reform strategies are common52. Notwithstanding the political discourse of the importance of balancing flexibility and security, welfare and labour market reforms followed two separate paths: actors did not foster complementarities and neither did the market53_.

Second, a large room for negotiation and negotiated flexibility enables the country to achieve a relatively high level of balance between flexibility and security54. Therefore it can be asserted that the feasibility of labour market reform and work organization reform depends on how new measures are perceived as serving the interests of the most prominent parties involved and concerned. As a result countries that lack platform for coordination, consultation

50_{D. Fourage, Minimum Protection and Poverty in Europe, [2002], Amsterdam: Thela Thesis, 218 ; T. Wilthagen &}

F. Tros, 'The concept of "flexicurity": a new approach to regulating employment and labour markets' [2014] Transfer 166, 178

51_{Ibidem, p.179}

52_{OECD (2006) Employment Outlook 2006. Paris: OECD}

54_{D. and J O'Reilly, 'Working-time and transitions in comparative perspectives ' in J. O'Reilly, I. Cebrian and M.}

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and negotiation seem to be at disadvantage when it comes to enforce flexibility-security measures55_.

Third, the Dutch and Danish cases also suggest that the decentralization of labour market policy has a beneficial effect on the introduction of flexicurity56. It provides parties (companies, local organisations, individual employers and employee) with an extensive leeway for tailor-made solutions appropriate for the needs and wishes. However, in order to be effective, this decentralization has to be paired with a strong coordination at central level57_{. Indeed, this coordinated decentralization enables the parties to “switch” the tailor}

made solutions between various levels relatively quick.

Nevertheless, there are also a number of reasons why the Dutch or Danish systems are not so frequently cited as possible models for the rest of the EU to follow. First, the success is pretty recent and it might appear that it was more cyclical and the actual result of freshly enforced policies58. Besides, Netherlands and Denmark are both relatively small and homogenous countries that can take measures which larger countries such as Germany or France are unable to enforce unless they reach a greater consensus59_.

2.2.1 b) Four components of Flexicurity

Although the neologism is regarded as a catchy term, a clear and unanimous definition of what it implies at EU level appears to be extremely difficult to share among scholars and academics. EU’s bodies face difficulties to determine the exact approach they want to undertake. Consequently, the Community usually defines goal by using vague and undefined concepts, precluding any policy to be enforced

Consequently, the theoretical definition60 includes various forms of flexibility and security. Open-ended term with multiple morphologies, borders and content of the neologism are determined according to the need and targets of its “developers”. This adaptable nature allows the existence of multiple models, shaped by circumstances and needs. The concept is

55_{D. Fourage, Minimum Protection and Poverty in Europe, [2002], Amsterdam: Thela Thesis, 218 ; T. Wilthagen}

& F. Tros, 'The concept of "flexicurity": a new approach to regulating employment and labour markets' [2014] Transfer 166, 173

57_{L. Léonard, 'Industrial relations and the regulation of employment in Europe' [2001] E.J.I.R. 27, 47}

58_{Ganssmann, 'Labor Market Flexibility, Social Protection and Unemployment' [2000] European Societies 243,}

244

59_{D. Ashiagbor, 'The influence of the European Employment Strategy on Member States' employment policies,}

regulatory strategies and labour law ' in Paul Davies (eds), The European Employment Strategy: Labour Market

regulation and new governance (1st, Oxford Press university, Oxford e.g. 2005) p. 63

60_{Although no fixed and unanimous definition exists, the widest interpretation of the content could be depicted as}

“an integrated policy strategy that attempts, synchronically and in a deliberate way, to enhance the flexibility of

labour markets, work organization and labour relations on the one hand, and to enhance security notably for weaker groups in and outside the labour market on the other hand”; T. Wilthagen & F. Tros, 'The concept of

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claimed not to prescribe a one-best-way solution but a range of possibilities or combinations61_.

Nevertheless, according to the traditional consensus, four inter-related components: flexible

and reliable contractual arrangements, comprehensive lifelong learning strategies, effective active labour market policies and modern social security system62_.

II.2.2. Tackling diversity within Member States’ social models: Common principles of Flexicurity

II.2.2 a) EU’s convergence strategy through the development of common principles of Flexicurity

“While flexicurity policies and measures must reflect the very different national situations, all the EU Member States face the same challenge of modernization and adaptation to

globalisation and change.”63

In order both to achieve the targets and flagships initiatives required to encompass the new nexus and prevent structural discrepancies among Member States, EU provided substantial framework and guidance for the implementation of integrated flexicurity strategies through the release of the 2007 Communication ‘Towards Common Principles of Flexicurity”64_{. To}

create a more open and responsive labour market, it seemed appropriate to reach a consensus at EU level on a series of “common principles of flexicurity” that would help the Member States in the establishment and implementation of strategies which fully take into account their own respective specific challenges, opportunities and circumstances.

The Community developed the common principles as following65:

62_{For more information on the content of the component see Communication from the Commission to the}

European Parliament, the Council, the European economic and social committee and the committee of the regions “Towards a job-rich recovery”, 18th of April 2012, Strasbourg, 2

63_{Communication from the Commission to the European Parliament, the Council, the European Economic}

and Social Committee and the Committee of the Regions, Towards Common Principles of Flexicurity:

More and better jobs through flexibility and security”, Brussels, 27.6.2007, 8

64_{Communication from the Commission to the European Parliament, the Council, the European economic and}

social committee and the committee of the regions “Towards a job-rich recovery”, 18th of April 2012, Strasbourg, 2

65_{Communication from the Commission to the European Parliament, the Council, the European Economic and}

Social Committee and the Committee of the Regions, Towards Common Principles of Flexicurity: More and better

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- Flexicurity involves flexible and reliable contractual arrangements; comprehensive lifelong learning strategies; effective active labour market policies; and modern social security systems (…)

- Flexicurity implies a balance between rights and responsabilities for employers, workers, job seekers and public authorities

- Flexicurity should be adapted to the specific circumstances, labour markets and industrial relations of the Member States. There is not only one model.

- Flexicurity should reduce the divide between insiders and outsiders on the labour markets. (…)

- Internal as well as external flexicurity should be promoted. Sufficient flexibility in recruitment and dismissal must be accompanied by secure transitions from job to job.(…)

- Flexicurity should support gender equality by promoting equal access to quality employment for women and men (…)

- Flexicurity requires a climate of trust and dialogue between public authorities and social partners (…)

- Flexicurity policies have a budgetary cost and should be pursued also with a view to contribute to sound and financially sustainable budgetary policies.

II.2.2 b) Flexicurity Pathways66

Since Member States vary considerably in their socio-economic, cultural and institutional background, the enhancement of flexicurity within their own system will also vary.

There is not one single labour market model or a single policy strategy that can be applied. On the contrary, implementing EU’s requirement for the modernization of the labour market supposes a careful analysis of the national situation.

In this regard, a number of broad, typical combinations and sequencings of the policy components of flexicurity can be identified. The latter are called pathways and are meant to help tackling the typical challenges that countries face on the way to flexicurity in order to design their own comprehensive pathway towards better combinations of flexibility and security.

- Tackling contractual segmentation

66_{For more information; See European Expert Group on Flexicurity, Flexicurity Pathways: Turning hurdles into}

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The first pathway consists in tackling contractual segmentation through the distribution of flexibility and security more evenly over the workforce. It would provide entry ports into

employment for newcomers and would promote their progress into better contractual arrangements. The Holy Grail is the conclusion if an open-ended contract.

It constitutes the main access route to protection by labour laws and collective agreements. Employers are often reluctant to enter in this relationship and opt for repeated fixed term contract for a long period of time. In these countries, security tends to rely on job protection rather than social benefits and consequently, unemployment benefits are rather low and social assistance systems are weakly developed.

This pathway aims to improve the position of workers involved in atypical form of

contracts through the adoption of legislation and collective agreements that would first give

them access to certain benefits and rights traditionally reserved for “regular” workers (pension funds and access to training) and second limit the use of non-standard contracts and promote timely progress into better contracts.

- Developing flexicurity within the enterprise and offering transition security

Countries concerned by this pathway are dominated by larger enterprises, offering high levels of job protection. Workers are usually very attached to their workplace and reluctant to be transferred. Consequently, the labour turnover is lower and long-term unemployment is on average higher than in some other type of countries67_{. Moreover, the labour market}

dynamism is rather low and moves across enterprises are less frequent which is problematic in term of labour market development and need of adaptability. Besides, as social benefits are rather well developed and adequate, outsiders need strong incentives to go back to work and accepting jobs. The major priorities of these countries are the emphasize of safe and

successful job to job transitions and the spending on active labour market policies offering roads back into employment for long term unemployed.

- Tackling skills and opportunity gaps among the workforce

The general trend in those countries is the existence of discrepancies in term of opportunities and skills between certain groups of workers. They are not all equally on broad and although employment rates tend to be high and contractual agreements appear to be sufficiently

flexible, the protection provided to weaker groups of worker (the low-skilled workers, women,

part-time workers, young workers) is uneven in comparison with other groups. Consequently,

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the risk of exclusion from the labour market increases68_{. In this regard, proactive labour}

markets policies provide strong incentives towards job acceptance but efforts may be needed to ensure progress in terms of job quality and skills levels through increasing investment in skills, training and R&D. In other words, countries following this pathways should value and better reward transitions or skills developments for these categories of workers69_.

- Improving opportunities for benefit recipients and informally employed workers

For some years, some Member States face the urge to substantively restructure their economy resulting in high numbers of people on long-term benefits with difficult perspectives of returning to labour market. The situation is such that the benefits received by laid off workers are depicted as “labour market exit benefits” rather than “transitions into new employment”. Because the chance of finding new employment is low, unemployed workers tend to stick with their benefits. Consequently it stimulates labour market exit and informal work rather than transition70_{. The introduction of new active labour market policies increasing}

employment and job opportunities, improving coverage of temporary workers, combination of work and care to bring back employment among women to a satisfactory level as well as regularising informal work through improving informal workers’ rights and providing access to professional training would not only create new opportunities for the unemployed and to another extent also bring informal activity into the formal activity71. In contrast with the other pathways, the choice of this methodology requires Member States to further develop and strengthen their institutional capacity by stimulating social partners to negotiate key elements of working conditions and by better cooperation between labour market and benefit institutions72. Indeed, by promoting and reinforcing the use of collective bargaining to determine the key elements of working conditions, including working time, Member State enables the social partners to adopt sectorial and regional “tailormade” measures that would encompass the situation in more efficiently.

jobs through flexibility and security”, Brussels, 27.6.2007, 16

jobs through flexibility and security”, Brussels, 27.6.2007, 17

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In conclusion, the two main directions of flexicurity, irrespective of the specific pathways chosen by the Member State, can be depicted as following; making “normal” employment

more “flexible” in terms of adaptability, without giving up security and making flexible more

“normal”, in security terms without giving up flexibility73. Despite this crystal clear statement,

the reality couldn’t be further from the truth as direction are usually easier to give than to apply….

III: CONLUSION – UPCOMING FLEXICURITY CHALLENGES

“Most of the specialized literature reports variations in flexicurity regimes by looking at real policies put in place in specific countries and analyses the impact of these policies in terms of

changes in flexibility or security of workers especially in light of the recent crisis”74_.

III.1: Weaknesses of the strategy

Drafting a unique and shared definition of what flexicurity implies is not only very hard in practice but is also pointless. Indeed, relying on the consulted literature, flexicurity should be seen as an end in itself but rather as a direction, pathways Member States should embrace to modernize their labour market with the final purpose of remaining competitive in terms of social standards.

The first weaknesses of this EU strategy are the lack of legal force and binding character supporting the quest of the nexus flexibility-security. The Community is confined (by the Member State or on a voluntarily basis) to the role of “advisory/supporting” body suggesting and strongly advising” Member States to follow some pathways and recommendations in the modernization of the domestic labour market.

Moreover, the lack of cross border vision jeopardizes the achievement of goals and aims determined by EU, especially in regards with EU 2020 strategy. “It is important to

acknowledge that one of the next challenges on the policy agenda might be to further address flexicurity across national borders, in particular to assess whether workers that

operate across national borders are not being disadvantaged in security terms”75_{. This}

observation contained in a 2007 report drafted by a Group of Expert on Flexicurity raises my concern and scepticism in regard with the relevance and effectiveness of the adoption of a European strategy. Created in 1999, the authors waited until 2007 to point out that the next

74_{European Commission, 'Flexicurity in Europe: Administrative Agreement' [2013] Social Europe 1, 22} 75_{European Expert Group on Flexicurity, Flexicurity Pathways: Turning hurdles into stepping stones (1st,}

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challenge will be to develop and extent the strategy to cross border matters…. Without even thinking about social harmonization or even coordination, this statement reflects the traditional two-speed integration (economic versus social) and the historical argument of

socially different culture and heritage that curb and jeopardize the possibility to tackle new

challenges Europe is going through from a top-down approach. In this regard, comprehensive and integrated active labour market policies cohesion at European level appears to be a mirage.

By constantly relying on their diversity and so called social sovereignty, The Member States slow down the development and improvement of their domestic labour market and eventually the European labour market. This national reluctance forces the Community to provide new tools and methods to assist and support the convergence of national systems through soft

law instruments. The enhancement of flexicurity under the form of principles and guidelines

at the disposal of the MS is a perfect illustration of how Europe is trying to cope with the achievement of new challenge within the limited scope of action left.

III.2 More effective EU coordination process between the various policy fields

“Structural labour market reforms are politically more difficult to implement than economic reforms insofar as they require adjustments of established institutional and legal frameworks

and acquired social rights”76

In my opinion, Europe reached a point where the prevalence of national over European initiatives in the social context should be overturned. Starting from this necessity, structural reforms must be conceived over the long-term and on the basis of stable strategic guidelines supported and understood by all those involved. The enhancement of flexicurity could represent a historical opportunity to simultaneously take economic efficiency and social equity to a higher level in Europe. The major problem arises from the fact that the policies necessary to improve employment in general are not properly coordinated. Following this observation, it is necessary to redesign more clearly and coherently the overarching institutional framework for such coordination and the respective roles of the various institutions responsible for its implementation77.

Present and Future' in J. Zeitlin and D. Trubek (eds), Governing Work and Welfare in a New Economy (1st, Oxford Press, Oxford 2003), p.234

Present and Future' in J. Zeitlin and D. Trubek (eds), Governing Work and Welfare in a New Economy (1st, Oxford Press, Oxford 2003), p.235

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PART II: EMPLOYMNENT PROTECTION LEGISLATION IN THE MEMBER STATES: RATIONALES UNDERLYING THE EXISTING DISMISSAL PROTECTION

How the enhancement of flexicurity will affect the dismissal protection in the MS “Dismissal law is traditionally a controversial issue across Europe. Under article 153(1)(d), the treaty on the Functioning of the European Union explicitly grants legislative competence to the European Union in the field of dismissal law through the adoption, by means of Directive, of minimum requirements as regards to the protection of workers whose employment contract is terminated. (…) Nevertheless, it does not seem very likely that 27

Member States will agree on legislation in this area at the European level in the near future”78

The first chapter brought the conclusion that despite its efforts, EU – voluntarily? - didn't impose a consistent framework to flexicurity, leaving Member State sovereign and relatively free to decide about the outcome of the required labour market "adaptation". In the absence of a universal definition, measuring and assessing the consequence of enhancement rely on the sole comparison of domestic Employment Protection Legislation evolution over time.79

In consequence, this second chapter aims to analyse to what extent domestic labour market policies – in particular dismissal protection legislation- have been reformed along the lines of the flexicurity requirements.

Once again, this wide nexus doesn’t mean anything by itself and requires to applied to concrete fields. Therefore I chose to narrow my research to the modernizations brought within national (French and Belgian) dismissal protection. However accurate facts and figures regarding the enhancement of flexicurity nexus at domestic level are rare, the comparison will focus on the employment protection legislation (EPL) and to what extent did the adoption of new policies alter the level of strictness of the current EPL.

II. 1. EMPLOYMENT PROTECTION LEGISLATION

II. 1.1. Notion and definition

78_{G. Heerma van Vos en B. ter Haar, 'Common ground in European Dismissal Law' [2012] E.L.L.J 215, 215} 79_{O. van Vliet and H. Nijboer, Flexicurity in the European Union: Flexibility for Outsiders, Security for}

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The Commission defines Employment protection legislation (EPL) as a set of rules and procedures that define the limits to the faculty of firms to hire and fire workers in private employment relationships. Its features are enshrined not only in law but also in collective and individual labour contracts80. The rationale underlying the EPL is to protect the workers against the risks associated with the dismissal through a series of requirements that needs to be respected by the employers when dismissing workers. The respect of these conditions attests the lawfulness of the dismissal. Although EU has adopted a number of legally binding instruments setting minimum requirements regarding certain conditions notably for collective redundancies, fixed term and part time workers… and creating a common minimum level of protection for the workers in all Member States, the large majority of the EPL framework remains within the scope of the Member States discretion. As a result, the main characteristics of EPL reflect different legal and institutional traditions81_{and trigger}

discrepancies in regard with the different domestic scope of protection.

In its report, the Commission establishes the following ascertainment; “country regulations

appear highly heterogeneous even within country grouping reflecting similar socio-economic characteristics. Where EPL differ the most across Member States is the regime for individual dismissals on regular contracts, not only in terms of stringency, but also in terms of instruments to protect workers against dismissal. The largest differences concern the

definition of fair and unfair dismissal and related remedies.”82. This difference is terms of

protection can be explained by a multitude of factors.

For instance, whereas in some countries there is no restrictive definition of a “fair dismissal” and the latter is determined a contrario in case the termination of the contract are not reasonably based on economic circumstances and on cases of discrimination (Belgium, Denmark, Greece, Czech Republic, Hungary, Ireland, Italy, Poland, Slovakia and United Kingdom), other Member States have a much stringent approach and consider that a dismissal is fair if it based on an effective and relevant reason (Austria, Estonia, the Netherlands). Moreover, once the unfairness of the dismissal has been established, the protection recognized to the worker differs across the Community. Broadly speaking, in case of unfair dismissal, a worker is entitled either to a pecuniary compensation on top of what is normally required for a fair dismissal or to be reinstated. Nevertheless, while in some countries reinstatement is not foreseen (Belgium and Finland), in other, reinstatement is the rule and compensation an alternative (Austria, Czech Republic).

80_{http://ec.europa.eu/europe2020/pdf/themes/23_employment_protection_legislation.pdf}

81_{For instance : In countries with civil law traditions EPL is regulated by law, while in common law countries it}

rather relies on private contracts and litigations. In the latter countries, courts have ample judicial discretion as opposed to the former,where legislation plays a greater

role;http://ec.europa.eu/europe2020/pdf/themes/23_employment_protection_legislation.pdf

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Finally, employment protection legislation encompasses other themes and matters than the sole dismissal protection legislation. However, in regards with the present thesis, the focus will be held on dismissal protection.

II.1.2 Domestic Employment Protection Legislation

“Labour market in Europe exhibit enormous diversity; in fact differences within Europe are

much greater than are the differences between the European average and North America83_”.

II.1.2.1 What is the goal of Employment Protection Legislation

The OECD’s calculation of EPL has three components: a multiple indicator of legal measures that limit, slow down or prevent an employer’s ability to dismiss an individual worker; a multiple indicator of procedural inconveniences that an employer may face during a dismissal process and a third category including notice and severance pay provisions84_.

The EPL indicator is available for different types of employment and the focus on regular contract gives a clear vision of the level of protection available for the insider, workers already active in the labour market. On the contrary, indicators are also available for temporary contract and their analysis enable the reader to have an overview of the protection offered and made available for outsiders, people trying to integrate the labour market85. However, in this study, we will be using the indicators referring to the regular type of contract (open ended contract).

Based on domestic “results” for each indicator, the OECD’s index is normalized to a scale from 0 to 6 where a higher score indicates stricter employment regulation86.

Nevertheless, the indicator might not always fully reflect the exact strictness of domestic EPL as some of its aspects can be regulated outside of the legal framework. For instance, notice

83_{S. Nickell, 'Unemployment and Labor Market Rigidities: Europe versus North America' [1997] Journal of}

Economic Perspectives 55, 72 ; D. Ashiagbor, 'The influence of the European Employment Strategy on Member States' employment policies, regulatory strategies and labour law ' in Paul Davies (eds), The European

Employment Strategy: Labour Market regulation and new governance (1st, Oxford Press university, Oxford e.g.

2005) p.61

84_{Muffels, Crouch and Wilthagen, 'Flexibility and security: national social models in transitional labour markets'}

[2014] Transfer 100, 110; O. van Vliet and H. Nijboer, Flexicurity in the European Union: Flexibility for Outsiders,

Security for Insiders (2nd, Leiden University, Leiden 2009) 5

85_{O. van Vliet and H. Nijboer, Flexicurity in the European Union: Flexibility for Outsiders, Security for}

Insiders (2nd, Leiden University, Leiden 2009) 5