The Dutch approach to Flexicurity:

The Netherlands compared to other EU countries and Turkey

WORKSHOP ON FLEXIBILITY OF LABOUR MARKETS Ankara, Turkey February 21 2011

Dr. Hester HouwingUWV Expertise Centre (Agency for employee benefits)Hester.houwing@uwv.nl

Content

What is flexicurity? Flexicurity in the Netherlands Comparison of key indicators Outcomes of flexibility/flexicurity in

Netherlands How to develop flexicurity further?

EC (2007) 8 Common Principles of Flexicurity

1. Implementation of ‘European Social Model’: flexible and reliable contracts, life-long learning, ALMPs, modern social security

2. Balance between rights and responsibilities for workers, employers, jobseekers, public authorities

3. No “one size fits all” adapt to specific circumstances4. Reduce divide between insiders and outsiders5. Internal and external flexibility. Job-to-job and inactivity-to-job

mobility should be supported. Good workplaces and upgrading of skills

6. Equal opportunities for: women, older, young, migrants, disabled.7. Trust, dialogue and responsibility between social partners and

public authorities8. sustainable budgetary policies and fair distribution of

costs and benefits

EC (2007) 4 Pathways of Flexicurity

1: Tackling contractual segmentation:For segmented labour markets with insiders and outsiders.

Distribute flexicurity evenly. Entry and progress2: Developing flexicurity within the enterprise and offering transition

security:For low job flows. Update capabilities and stimulate job-to-job

transitions3. Tackling skills and opportunity gaps among the workforce:Promote opportunities of low-skilled people to enter into

employment and develop skills in order to obtain a sustainable position

4. Improving opportunities for benefit recipients and informally employed workers:

For countries with substantial economic restructuring and many long-term benefit recipients. shift from informal to formal employment through ALMP and lifelong learning combined with adequate level of unemployment benefits.

The Netherlands is an ‘example of flexicurity’

Acoording to the European Commission (Towards Common Principles of Flexicurity, 2007)

Because of: High share of part-time employment, with equal

rights as full-time workers. Strong involvement of social partners in

developing and implementing policies The combination of stimulating temporary

employment with introducing labour rights the Law on Flexibility and Security (1999)

Dutch Law on Flexibility and Security

‘Package deal’, negotiated by social partners

Flexibility: More opportunities to use temporary employment Somewhat simplification of dismissal for permanent workers Deregulation of agency work sector

Security: More rights for very small contracts (nature of contract and

hours) ‘No work no pay’ only for 6 months and always 3 hours paid

for small (<15 hours) flexible contracts Trial period for temporary contracts <2 yrs = 1 month. All

other contracts = 2 months maximum. Improvement rights for agency workers

Deviation from law is possible when social partners agree

Important flexicurity elements in Turkey

Equal treatment, mainly women. Need for care facilities Combat informal work (+/- half of workforce, mainly

women). High flexibility but risk of exploitation and lack of coverage of social security

Role of social partners vis-a-vis the government needs to be re-examined

2003 Turkish Labour Act. Create flexible work provisions to increase (formal) employment while providing (social) security. Flexible work is here: temporary, parttime and on-

call work

Source: 2009 Matra project (cooperation with Turkish Ministry of Labour and social security; SGK, ISKUR, Turk-Is and Tisk)

Paricipation rates(Data: OECD 2009)

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

Denmark Germany Netherlands UK Europe Turkey

Part-time employment (Data: OECD 2009)

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

Germany TurkeyNetherlands UK EuropeDenmark

Involuntary part-time employment (% of part-time) (Data: OECD 2009)

0,0

5,0

10,0

15,0

20,0

25,0

30,0Denmark Germany Netherlands UK Europe

Turkey: no data

Temporary employment (%) (Data: OECD 2009)

0

5

10

15

20

25

Denmark Germany Netherlands UK Europe Turkey

Strictness of Employment Protection overall (Data: OECD 2008)

0

0,5

1

1,5

2

2,5

3

3,5

4

2008

Denmark Germany Netherlands United Kingdom Turkey OECD countries

Flexibility: worker reallocation2000-2005 (Hires and seperations)(OECD Employment Outlook 2009)

0

10

20

30

40

50

60

Denmark Germany United Kingdom Turkey

Main elements of Dutch flexicurity

High increase in use of temporary workers Temporary workers get much less training and less pay (Not

equal like part-time workers) Agency workers: Not much increase in security, but emphasis

on investments in training Deviation from the law different across sectors negotiated

by social partners Flexibility is concentrated on a specific group (risk of dual

labour market: who stays flexible?) Related to employment protection and high costs of sickness

for permanent workers Emphasize more other types of flexibility, such as internal

flexibility (e.g. telework) Flexibility could be distributed more across groups move

from ‘job security’ to ‘employment security’

Comparison to other EU countries

Denmark: Strong increase in agency work; decrease in temporary work due to stricter EU

guidelines Equal rights for temporary work, but problems with small jobs and social security;

no equal pay for agency work High security of moving into permanent Important role of social partners

Germany: Strong increase in agency work and temporary work due to liberalisation of rules Equal rights for temporary work, but problems with small jobs and social security;

no equal pay for agency work in collective agreements between social partners medium security of moving into permanent Social partners disagree on flexible work

United Kingdom: Increase in agency work; decrease in temporary work due to stricter EU guidelines.

Overall level very low Equal rights for temporary work, but problems with build up of rights to social

security; no equal pay for agency work in collective agreements between social partners

high security of moving into permanent, but very low protection No role of social partners

Further development of flexicurity in Turkey

2003 Turkish Labour Act. Create flexible work provisions to increase (formal) employment while providing (social) security. Does flexibility increase (Formal) employment? What is security? ALMP? life long learning?

Social security? Good practices (do they really work?):

short-time work and short-time benefits (directed by ISKUR)

Training for job seekers (also ISKUR) Premium reductions for weak groups Other?

Thank you for your attention!

Further questions?

Digital copy of PhD thesis available via: www.flexworkresearch.orgBook available via hester.houwing@uwv.nl