Protecting the Worker and Not the Job?

By European Trade Union Confederation (ETUC)

The real lessons from collective bargaining practice in Denmark and Sweden.

The present debate in Europe on 'flexicurity' is a narrow one. It reduces the discussion to the Danish variant of no or little job protection combined with high unemployment benefits. Systematically referring to the Danish case and presenting this model as 'free firing of workers' promotes the idea that European workers should give up job protection in return for what is known as 'protected mobility'. In this scenario, security does not mean workers holding on to their present jobs, but workers moving from one job to another. Commissioner Spidla recently illustrated this approach by claiming that 'if the ship is sinking, you don't try to save the ship, you evacuate the people on board'. In other words, employment protection legislation should be abandoned and policy should instead invest in training, and assist retrenched workers to find new jobs. But is it really the case that job protection does not play any role at all in the Danish 'flexicurity' model?

Aren't those who argue for doing away with job protection altogether not jumping to the wrong conclusions?

There is no such thing as 'free firing' of workers in Denmark. While some job protection requirements such as administrative processes and severance pay are indeed less strict than in other countries, Danish workers enjoy notification periods that are actually higher than in many other parts of continental Europe.

Why do Denmark, Sweden and Finland put so much focus on workers' rights to notice of retrenchment? The reason is that advance notification reduces the costs of adjustment by giving retrenched workers a head start. Advance notification is like an early-warning system signalling to workers the need to prepare, to start looking for another job and, if necessary, to engage in retraining. It does not come as a big surprise that research shows that workers with advance notification indeed spend less time being unemployed and find a new job more easily.

But there is even more to it. Denmark and Nordic countries in general do not limit themselves to simply warning workers of change in advance, they also make sure workers have instruments at their disposal that allow and help them to address change in a productive way.

Collective bargaining practice in Sweden is another good example. In Sweden, collective agreements at industry level have set up 'career transition' funds financed from the business sector and jointly managed by social partners. These funds provide notified workers with training, job-search assistance, or paid internships in other firms, even while they are still formally employed by the company that is firing them.