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The core idea of labour law is under threat

| Text: Kerstin Ahlberg, editor EU & Arbetsrätt

The core idea of labour law is to protect the weaker party in an employment relation. This is increasingly under attack from market-led thinking where the main aim is to create opportunities for everyone to get a job.

This might sound good, but it could lead to a worsening of conditions for both those who have managed to get a foot in the door of the regulated labour market and for those who are knocking, waiting to get in.

"A normal work contract is a permanent contract,” said Jean-Claude Juncker, President of the European Commission, when he described the Commission’s plans for labour law last autumn. By that he meant that a “permanent” work contract should be the rule and that other types of employment, usually know as atypical, should be the exception. 

You wouldn’t be wildly off the mark to say that the majority of the working population supports what he said. If you ask people on temporary contracts what they really want, most say they would like to be permanently employed.

But looking at how things actually are – not how they should be – even temporary contracts are normal nowadays. They have become more and more common, and when European employers hire people after the latest economic crisis, the share of temporary jobs increases more than the share of permanent contracts. 

The most extreme form are the so-called zero-hours contracts, where the employer does not promise a single hour of work, and every service performed represents a temporary contract in a never-ending row of contracts.

This development has taken place completely within existing labour law. It is largely governed by political decisions. Over the past ten years most governments in member states, backed (and in some cases forced) by the European Commission, have eased their regulations on employment protection. It has become easier and cheaper to fire staff and there has been an expansion of the number of ways you can hire temporary staff.

The idea has been that this would make employers more willing to hire, leading to rising employment figures. No-one has been able to show that the reforms have had any such effect. What is certain, however, is that work contracts and incomes have become less secure both for people with a foot in the door of the labour market and for those who are outside knocking. 

What Jean-Claude Juncker did not say last autumn was that a normal permanent contracts is a full time contract. That used to be the case, and part time work has been seen as atypical. Now it looks like even involuntary part time work is about to become normalised in trades where full time work used to be the norm. In service jobs where demand varies a lot over 24 hours and between the days of the week, it is becoming more and more common to reduce the number of full time contracts to a minimum and to rely on more part time staff. 

They can then be easier timetabled in for when demand is greatest. One good example of this is the situation which triggered the Swedish train strike in the summer of 2014. One of the members of the employer organisation Almega wanted to fire 254 full time train drivers and train hosts – and immediately offer 160 of them new contracts if they accepted to reduce their hours and go part time.

When it comes to the very latest forms insecure jobs, for instance so-called crowd work where people offer services to others facilitated by a third party, labour law has quite simply been unable to keep up. The Uber taxi service is but one example, there are other tasks which can be performed at home at your computer for a client you never get to meet. It then becomes unclear whether you are then considered to be an employee and who in that case is your employer, or whether you are self-employed and not at all protected by any labour law or regulations. Put simply: the less secure the work, the more likely it is that the worker has no protection.

The resulting knee-jerk reaction from some trade unions seems to be that these kinds of services must simply be fought as hard as possible, and preferably banned. That is probably impossible both politically and practically. As long as it is possible to make money, businesses will find new business models which legislators have not considered banning.

Instead you have to try to develop labour law so that it also in the future provides basic protection for all who carry out a job for others and who are dependent on them. This – to protect the weaker party in a employment relation – has traditionally been the core idea of labour law.

This core idea has, however, increasingly come under fire from more market-led thinking, pointed out Professor Niklas Bruun at the research programme ReMarkLab’s conference in Stockholm in May. This advocates the basic principle that everyone should have the opportunity to get a job. This means regulations securing equal treatment and non-discrimination are of utmost importance. 

Giving everyone the same chance sounds great, of course. But from this theory also follows that minimum wage legislation and high unemployment benefits are bad things, as they keep people from looking for work. In that respect the right to work in reality becomes a duty to work. The most extreme version of the theory would even mean rules on employment protection and similar individual rights are obstacles to access to work and should be abandoned. Instead the law should support and protect those who provide jobs, i.e. small and medium sized enterprises, said Bruun.

Later years’ dismantling of the protection of employees in Europe is to varying degrees inspired by the new, market-led way of looking at the function of labour law in society. It has been particularly influential in countries which have become EU members since 2004, argued Niklas Bruun.

But, as Professor Kevät Nousiainen, another of the conference speakers, established: If you don’t have any rules guaranteeing workers' minimum rights, principles for equal treatment and non-discrimination are not of much use. An employer who offers a poor contract is still ‘fair’, as long as it treats all employees equally bad.

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