INCOME SECURITY FOR FIXED-TERM EMPLOYEES AND SELF-EMPLOYED WORKERS DURING PERIODS OF UNEMPLOYMENT IN EUROPE 4th CONFERENCE on REGULATING FOR DECENT WORK,

INCOME SECURITY FOR FIXED-TERM EMPLOYEES AND SELF-EMPLOYED WORKERS DURING PERIODS OF UNEMPLOYMENT IN EUROPE

4th CONFERENCE on REGULATING FOR DECENT WORK, ILO, GENEVA 8-10 JULY 2015

«NON-STANDARD» EMPLOYMENT AND SELF-EMPLOYMENT

Labour market processes of flexibilisation: INTO EMPLOYMENT (fixed-term employment, part-time employment, zero hour work) and TOWARDS SELF-EMPLOYMENT (subcontracting and outsourcing)

In 2006 the European Commission highlighted that “the share of total employment taken up by those engaged on working arrangements differing from the standard contractual model as well as those in self-employment has increased since 2001 from over 36% in 2001 to almost 40% of the EU-25 workforce in 2005” not a marginal part of the European labour market

«NON-STANDARD» EMPLOYMENT, SELF-

EMPLOYMENT AND SOCIAL SECURITY

Flexicurity principles. Part of the EU employment policies

“While most traditional social protection models, in particular social security and labour law systems, are designed to safeguard the social and employment rights of people in employment, there is a risk that with the new forms of employment which are emerging and with an increasing number of self-employed workers, new groups of workers may be faced with decreased social protection” (EUROPEAN PARLIAMENT RESOLUTION, 14th JANUARY 2014)

RESEARCH TOPIC

Legislation on unemployment benefits and statutory requirements from the

point of view of fixed-term employees and self-employed workers. An overview of five EU countries

MAIN ISSUES

Involuntary TEMPORARY CONTRACTS (80% in Greece, Portugal, Spain, Cyprus in 2012. Source: EUROPEAN COMMISSION 2014)

Differences between “disguised employment” and “economically dependent” SELF-EMPLOYMENT (EUROPEAN COMMISSION 2006)

All EU Countries have unemployment benefits (only contributory level, only non-contributory level, or both levels)

Low coverage in some EU Countries for short-term unemployment (EUROPEAN COMMISSION 2015)

Lack of unemployment benefits for self-employed workers in some EU countries

INTERNATIONAL LAW- ILO

• Unemployment Provision Convention of 1934 (No. 44)• “Employment Promotion and Protection against

Unemployment Convention” of 1988 (No. 168)

Unemployment

• Social Security (Minimum Standard) Convention No. 102 of 1952

• Social Protection Floors Recommendation, 2012 (No. 202)

Social Security Standards

INTERNATIONAL LAW- COUNCIL OF EUROPE

EUROPEAN SOCIAL CHARTER, Article 12:

Member Countries undertake “to endeavour to raise progressively the system of social security to

a higher level”

INTERNATIONAL LAW- EU

TFEU SECTION X:

ART. 153 (ex ART. 137 of the EC Treaty): “the Union shall support and complement the activities of the Member States” in “social security and social protection of workers” (c); the “protection of workers where their employment contract is terminated” (d); the “combating of social exclusion” (j); and “the modernisation of social protection systems without prejudice to point (c)”(k)

THE COUNCIL AND THE EUROPEAN PARLIAMENT

Can adopt measures to promote the cooperation between Member States

Can adopt directives which establish “minimum requirements for gradual implementations” for the areas under points (a) to (i), consequently excluding points (j) and (k)

MAIN ISSUES - EU DIRECTIVES («HARD LAW»)

“Social security and social protection of workers” is the only one subject for which a unanimous vote is requested in order to adopt a Directive (Article 153 (2) (b), last paragraph)

The “financial equilibrium” of the Member States shall not be “significantly affected”.

Member States can “maintain or introduce more stringent protective measures compatible with the Treaties”, according to Article 153 (4)

OPEN METHOD OF COORDINATION AND «SOFT LAW» INSTRUMENTS

OMC

Green Paper “Modernising labour law to meet the challenges of the 21st century” of 22/11/2006 [COM (2006) 708]

European Parliament Resolution of 14th January 2014, “Social Protection for all, including self-employed workers” calls on Member States to improve social security systems where it is necessary “so that social protection provisions for self-employed workers are better adapted to the needs of those workers”.

AN OVERVIEW OF THE LEGISLATION IN FIVE EU MEMBER COUNTRIES

SPECIFIC ASPECTS CONSIDERED (TOTAL AND INVOLUNTARY UNEMPLOYMENT)

objective scope contribution period contribution requirements duration quantity

Assorted overview of how different welfare systems and national contexts have dealt with these two forms of work before and during the economic crisis

UNITED KINGDOM

CBJSA: Class 1 National Insurance Contributions (self-employed workers

not included) Two tax years considered Two contribution requirements (26 weeks of contributions in one

of the two previous tax years – 50 weeks of contributions or NIC for each of the two previous tax years, at least LEL)

Flat-rate Duration: 182 days

«Means-tested assistance, modest universal transfers or modest social-insurance plans» (ESPING-ANDERSEN 1990)

UNITED KINGDOM

IBJSA:

Self-employed entitled Income-based Flat rate (amounts similar to those of CBJSA) 2012: Universal Credit

Fixed-term employees with intermittent career patterns may claim both IBJSA and CBJSA

Ex self-employed workers can only claim IBJSA Sanctions and role of the active labour policies

ITALYNASPI (Decreto Legislativo 4 marzo 2015, n. 22, Art.2)

Objective scope: employees (self-employed not entitled) 13 weeks of contribution Four years considered 75% of the average wage Duration: half of the period of contribution + ASDI (experimental measure)

The contribution period has been shortened but also the general level of the benefit has decreased

DIS-COLL (Art. 15)

Objective scope: a “part” of the self-employed of the “Gestione Separata” (“collaboratori coordinati e continuativi, anche a progetto”)

Two contribution requirements 75% of the average wage Duration: half of the period of contribution

Other self-employed workers have no right to the benefit No assistance level for unemployment or for employees, nor for self-employed workers

FRANCEARE

Objective scope: employees Contribution period: 122 days or 610 hours in the last 28 months Duration: reduced but it corresponds to the contribution period (max 730 days) Extent: fixed part + variable part of 40,4% of the SJR «droits rechargeables»

RSA

Objective scope: all citizens in need (self-employed under certain circumstances) Based on family income Strong employment policies

GERMANYUNEMPLOYMENT I (SGB III)

Objective scope: employees (self-employed not entitled) Contribution period: one year in the last two years Duration: up to 12 months or more depending on age Extent: 60 to 67% of the reference salary The contribution period may be difficult to achieve for a fixed-term

employee

UNEMPLOYMENT II (SGB II)

Objective scope: all citizens in need (family considered as a needing community)

Flat-rate benefit (€ 399 per month + benefits for other family members), house expenses

Strong means-test and “one-euro-jobs”

SPAINPRESTACIÓN POR DESEMPLEO Objective scope: employees (self-employed not entitled) Contribution period: minimum 360 days in the last 6 years Duration: 120 to 720 days Extent: 70 % of the reference salary (50% after 6 months) The contribution period may be difficult to achieve for a fixed-

term employee

SUBSIDIO DE DESEMPLEO Objective scope: employees Contribution period: 6 months (3 for family responsibilities) Duration: max 6 months Flat-rate benefit

SPAINPRESTACIÓN POR CESE DE ACTIVIDAD (Ley 32/2010, de 5 de

agosto)

Objective scope: self-employed of the RETA and RETM RETA: very wide scope Contribution period: minimum one year Duration: low and depending on contribution (for example, 2

months for 1 year of contribution)

No assistance level for self-employed workers: only ex-employees are entitled to RAI and Plan Prepara

Voluntary scheme

CONCLUSIONS - CONTRIBUTORY LEVEL

IN THE COUNTRIES WE HAVE ANALYSED

• For fixed-term employees the main issue is the achievement of the contribution requirements: some Countries have shortened the contribution period but also the duration/quantity of the benefit

• For self-employed workers the main issue is the existence of a contributory level and whether it is compulsory or voluntary

CONCLUSIONS - ASSISTANCE LEVEL

IN THE COUNTRIES WE HAVE ANALYSED

When fixed-term employees do not reach contribution requirements, in some Countries they can claim income-based assistance benefits, to which also ex self-employed are entitled

In these Countries (UK, Germany) assistance means-tested unemployment benefit is the unemployment benefit for these forms of work

In this cases the challenge moves to the degree of conditionality and to the quality of the vocational training and jobs offered by Public Employment Services

CONCLUSIONS

Both contributory and non-contributory level should be implemented (ILO, EU)

The contributory level can present problems for what concerns these forms of work, while assistance income-based UB are not granted to all the unemployed in some countries

ILO prescribes forms of “basic income” security in case of unemployment which do not exist for all unemployed in some countries

Are the non-contributory unemployment benefits in Germany and UK forms of “minimum income” or “basic income” provisions as prescribed by ILO? (conditionality and sanctions)

Thank you