Regulating New Forms of Employment

Local Experiments and Social Innovation in Europe

Ida Regalia

• Publisher: Routledge
• Year: 2006
• eBook ISBN: 9781134236770
• Edition: 1
• Topic: Economia
• Subtopic: Teoria economica

Using a comparative framework, this new volume focuses on how non-standard employment can be regulated in very different social, political and institutional settings.

After surveying these new forms of work and the new demands for labour-market regulation, the authors identify possible solutions among local-level actors and provide a detailed analysis of how firms assess the advantages and disadvantages of flexible forms of employment. The authors provide six detailed case studies to examine the successes and failures of experimental approaches and social innovation in various regions in the UK, France, Germany, Italy and Spain.

1 New forms of employment and new problems of regulation

Ida Regalia

This book deals with forms of employment other from the one that became dominant in the most developed twentieth-century economies following the advent of standardized mass production. I refer to those types of employment variously termed ‘atypical’, ‘contingent’, ‘precarious’, ‘new’, ‘non-standard’, ‘non-traditional’, ‘flexible’ (Córdova 1986; Rodgers and Rodgers 1989; Delsen 1995; Summers 1997; Kalleberg 1999) and which constitute a heterogeneous array of ‘particular’ (Germe and Michon 1980) ways with which employers ensure the availability of labour, and, vice versa, with which diverse groups of workers establish contractual relationships with employers/contractors. Such forms of employment are subject to relatively little regulation, or they are regulated differently with respect to the dominant form. Their spread over the last fifteen to twenty years in Europe, the United States and the other developed countries signals changes which for some time have affected work, the institutions that regulate it, and its meaning itself for individuals and society.

I shall return to these matters later. First, however, I must specify that the object of the book is neither to furnish a thorough definition of these ‘diverse’ forms of employment nor to describe, measure and interpret their development, nor to discuss the effects of their diffusion on the firms, workers and economies concerned. The book’s purpose is instead to investigate projects and experiments - accomplished to varying extents and with greater or lesser degrees of success - intended to regulate at the local level in concerted ways, and not simply by fiat, recourse to these forms of employment in Europe, facilitating their use while at the same time rendering them socially acceptable.

A first assumption underlying the approach adopted is that employers do not find ensuring the availability of labour in the quantity and of the type they require to be a routine or straightforward matter (Reyneri 2002): on the contrary, it is a recurrent problem for them, whose solution requires institutional interventions and/or strategic choices (Marsden 1999) and appropriate investments, and which becomes especially critical in periods when radical changes occur in the economic and social contexts in which firms operate, as during the age of early industrialization, or during the development of the Fordist production model and the vertically integrated large corporations. A second assumption is that possible solutions to the problem do not consist in a simple choice between markets and hierarchies (Williamson 1975) or between recourse to the external market and the development of internal labour markets (Doeringer and Piore 1971), where the firm still performs the leading role. They may instead arise from initiatives taken by other actors jointly with, or in place of, the firm.

From the former point of view, the approach adopted by the book draws on theories on management uncertainty in periods of change (Streeck 1987), especially in the current period of change, characterized by a marked increase in the interdependence and unpredictability of international markets, the distinctive and disconcerting feature of which is the attenuation or disappearance of national borders, and therefore of the closed and sharply defined scopes within which nation-states were long able to intervene efficaciously in the economy, promoting and steering its development (Streeck 2004).

Of course, it is possible to react to current changes by maintaining that, although momentarily acute, they represent crises of limited scope which can be handled by updating the instruments available for the purpose. From this point of view, dealing with uncertainty is largely a question of the time necessary to adjust behaviours and modes of action. Especially in institutional settings and among observers on the employers’ side, the debate on the ‘new’ or ‘non-standard’ forms of employment has often been characterized by this assumption of substantial continuity or gradual change. Yet it is also possible to take the opposite point of view and argue that the changes currently in progress are so fundamentally different with respect to the past that it is difficult or even almost impossible to envisage solutions or remedies for the uncertainty and unpredictability that now prevail. The only option for actors is either to resist by entrenching themselves in traditional practices or to surrender, proclaiming the end of the established order - whether this concerns work, labour law or the wage regime (Beck 1986, 1999; Simitis 1994; Rifkin 1995; Bauman 1998; Sennett 1998).

Although they start from apparently irreconcilable premises, both these approaches tend to neglect the fact that if the consolidated normative systems lose - temporarily or permanently - their regulatory capacity, innovative arrangements may come into being; and they may do so also on the initiative of the actors directly involved themselves. These arrangements may arise because firms need labour today; it is today that they must cope with the changing attitudes and availability of labour supply - a labour supply not simply at the mercy of demand as long as it is able to deploy ‘voice’ and/or rely on the protections provided by the welfare system. On the labour side, they may also arise because various groups of workers find it in their interest to seek/accept nonstandard forms of employment, and not necessarily because they are obliged to by their weakness. Investigating forms of normative innovationor experimentation, and analysing their implications, is to take a particular and specific point of view on current developments in labour-market governance, and even more so on those of the future.

From the latter point of view, the reference is to the theories on the most appropriate forms of economic regulation that, since Polanyi, have emphasized the plurality of possible solutions available (Streeck and Schmitter 1985; Hollingsworth and Boyer 1997). And in particular the focus is on the various strands of research which since the 1980s have stressed the appropriateness of the local level for the management of change processes that have become increasingly difficult to govern from the centre using uniform criteria (e.g. Piore and Sabel 1984; Bagnasco 1988; Pyke and Sengenberger 1992; Crouch et al . 2001).

Thus the book, and the research on which it is based, stand at the point of intersection between studies on non-standard or atypical forms of work and studies on local concertation for employment and development. It shares its general theme with the former, and its hypothesis of the importance of the local dimension as the locus for normative experimentation with the latter.

Delimiting our field

With a logical procedure similar to that used in the literature to define the tertiary sector and to discuss the development of the service economy in terms of their differences with respect to the primary and secondary sectors and the industrial economy, the most recent debate on ‘atypical’, ‘new’ or ‘non-standard’ forms of employment has defined their features and settings by default with respect to the form of employment which came to be recognized as normal or standard during the twentieth century. For example, the topic was presented as follows by a comparative study published in the mid-1990s:

Atypical employment relations are those that differ from the traditional model of the employment relationship. This traditional model was characterised by the fact that the worker had only one employer, worked full time on the employer’s premises and (was) expected to continue so indefinitely... This model of full-time wage employment survived until the 1970s, when the world of work witnessed the emergence of atypical employment characterised by the absence of one or more of the standard features. Hence atypical employment relations can be defined as employment relations that deviate from full-time open-ended wage employment, including part-time work, labour on call contracts, min-max contracts, fixed-term contracts, seasonal work, agency work, home-based work, telework, apprenticeship contracts, freelancers, self-employment and informal work.

(Delsen 1995: 1)

Entirely similar definitions have been provided by most authors who have written on the subject. Thus the terms used to denote these forms of employment comprise modifiers which imply the existence of a ‘normal’ model from which they diverge (‘atypical’, ‘non-standard’, ‘non-traditional’) or differ in kind (‘new’, ‘particular’) or in quality (‘flexible’, ‘contingent’, ‘informal’).

However striking in polemical terms, none of these designations is comprehensive and satisfactory for the purpose of rigorous discussion. First because the wide diffusion of these forms of employment makes adjectives which stress their non-normality - like the very common ‘atypical’ - largely inappropriate. And principally because what is taken to be the standard traditional and consolidated employment relationship has in fact resulted from the - extraordinary but recent - historical evolution undergone by the most advanced capitalist economies especially since the Second World War, with the development of the welfare state, labour law and mature industrial relations systems. There is little new, or nontraditional, in the ‘new’ forms of employment. As the most attentive scholars have pointed out (see for all Supiot 1999), they can instead be viewed as a return to the past, to the period prior to the development of standardized mass production (Summers 1997; Simpson 1985). If anything, in the twentieth century what was new was the consolidation of a standard employment system, regulated by labour law and/or the industrial relations systems, which imposed itself because it was more efficient - at that time - for firms in both Europe and the United States (Kalleberg 1999: 7).

Moreover, the use of non-standard forms of employment alongside standard ones never disappeared, or at least it did not disappear in certain sectors of the economy (agriculture, construction, some private services) or in small-firm-based production (as well exemplified by the cases that Bortolotti and Giaccone discuss in Chapter 6 of this volume). Indeed, one may say that non-standard employment became a socially important visible and controversial issue when it began to penetrate and invade areas in which the forms of employment and work ‘typical’ of the Fordist mode of production (i.e. large-scale manufacturing) were most predominant (Christensen 1995; Kalleberg 1999).

But I shall not insist further on this theme. It is necessary to point out instead that, despite their shortcomings, the two expressions that are mainly used in this book, and that will be treated as synonymous, are ‘new’ or ‘non-standard’ forms of employment. The former is the term most accredited in European political discussion of labour-market issues. The latter is the more descriptively accurate one, in that it refers to the existence of a previous standard employment system. Both of them are probably the most value-neutral of those available, although the former has an implicit positive connotation. Independently from the personal preferences of this book’s editor and contributors, our argument does not concern the question of the desirability or otherwise of these forms of employment. That they are today widespread in all the advanced economies is not in itself a positive or negative phenomenon. Not only may they correspond to the changed needs of firms, and anyway be preferable to unemployment in economies no longer able to furnish a sufficient number of standard jobs, but they may also be viewed with favour by various categories of workers: for example, those who find it difficult to accept full-time and/or year-round employment, those who for personal reasons are not (yet) interested in a permanent job, or those who prefer the opportunities afforded by self-employment to organize their personal lives. The criterion is instead whether and how their use is regulated so that their advantages to both parties, employers and workers, are optimized. It is precisely because these forms of employment differ to a greater or lesser extent from the ‘standard’ model, with its array of consolidated protections, that an investigation on their regulation makes sense.

It is common knowledge that non-standard forms of employment are markedly heterogeneous. And the problem of whether and how they should be regulated varies considerably as a consequence. According to the type of deviation from the standard model, one can distinguish a first category comprising forms that do not respect the norm of full-time employment: the various types of part-time or short-time employment, ranging from more traditional ones where workers are regularly employed on reduced hours schedules to those where the work is concentrated only in certain days or months of the year, to forms of short-time work closely dependent on the changing needs of firms. A second category includes forms which do not involve open-ended employment, these being the various kinds of occasional, prolonged or recurrent temporary work (short-term temporary employment, fixed-term contracts, seasonal work). There are then those forms of employment where the worker does not directly depend on the user firm because s/he is temporarily or permanently taken on by another organization: an agency or a contract company (temporary agency workers, leased employees, and similar). One may further distinguish work arrangements which do not involve - formally, at least - any employer, as in the cases of self-employed workers (especially if with no employees) or independent contractors, where workers supply their labour to organizations that pay them for the services performed or the goods produced, not for their availability to work, and which sometimes disguise situations of effective dependent employment. Finally, there are arrangements where the work is not performed on the employer’s premises (home-based work, telework, distance work).

In the late 1990s the incidence of non-standard forms of employment considered as a whole - part-time jobs, various forms of temporary employment, self-employment or independent contracting - was estimated for the United States at 30 per cent for men and 40 per cent for women (Kalleberg 1999). Analysis of the figures published by the Eurostat Labour Force Surveys conducted between 1988 and 1998 by the German Institute of Employment Research, the IAB (Hoffmann and Walwei 2000), shows that the proportion of typical (open-ended, full-time) employment decreased by several percentage points in the majority of the European countries during the period considered. However, with the exception of three countries - the Netherlands, Greece and Spain - in 1998 the majority of workers still had standard employment relationships, albeit with considerable differences among countries, ranging from 56 per cent in Portugal to 81 per cent in Luxembourg. These figures have been substantially replicated for the beginning of the twenty-first century; indeed, in several cases, non-standard employment has decreased.

The studies available, therefore, do not bear out the contention - propounded mainly in the mid-1990s - that non-standard forms of employment in the total labour force are bound to increase until they eventually supplant the open-ended full-time employment model. As the central chapters of this book show, this has not happened. It has not done so either in general or in those countries widely expected to display a particularly marked increase in these forms of employment as functional substitutes for insufficient labour-market flexibility (France, Germany, Italy and Spain among the countries considered here). In general, the figures show an increasing trend during the 1980s and 1990s and then a certain stabilization of the phenomenon - as if, at least for the time being, the threshold of efficient use of these forms of employment has been reached. The relatively limited diffusion of non-standard employment relationships is even more evident if one considers solely the various temporary forms of employment and the self-employed, omitting regular parttime jobs, which constitute the non-standard arrangement that most closely resembles the standard one.

Consequently, this book is concerned with workers who represent a significant segment of the labour market but are nevertheless in the minority. This, however, does not detract from the qualitative importance of the phenomenon.

Advantages and disadvantages of non-standard work arrangements

In fact, evaluation of the importance of non-standard forms of employment should be less concerned with their quantitative dimension than with their qualitative impact on the economy and society. Consequently, the reasons for their diffusion and the outcomes to which they give rise - or in other words, the advantages expected to derive from them, and the actual results, desirable or otherwise - gain importance.

The literature proposes essentially three reasons for the development of flexible employment arrangements: the changed requirements of firms operating in a broader, more uncertain and more unstable economic context with constantly intensifying pressures to increase competitiveness and to cut costs; the changed behaviour of labour supply, with a marked increase in labour-market participation especially by women; changes in the labour policies by governments and the European Union as to unemployment.

The first of these arguments runs as follows: in the period when the supposedly established economic setting, emerged after the Second World War, became subject to a deep transformation, and the greater openness and interdependence of markets combined with a greater unpredictability of demand, the development of a service economy as opposed to a manufacturing economy, and the advent and spread of the potentials of the digital technology revolution, firms discovered the advantages of using more extensively and systematically than in the past forms of employment which differed from the standard one. Indeed, recourse to these forms of employment enables firms to adjust their work forces more efficiently and more rapidly to variations in demand or in customer needs, avoiding redundancies and waste, and consequently reducing costs; it allows them to acquire human resources with specific or rare skills for the time that they are necessary - and therefore without internalizing them on a stable basis; it allows them, as well, to use long trial periods to screen workers before hiring them permanently, or only to meet temporary, additional or substitutive labour needs (Kalleberg et al. 1999). Finally, especially in countries where the standard employment relationship is characterized by high social security contributions and taxes, or by lengthy and costly dismissal procedures, the systematic use of non-standard employment relationships enables employers to circumvent the regulations, so that they can adapt more rapidly and save on costs (Schmid and Storrie 2001).

In short, besides serving the purpose of cost cutting, the use of more informal types of employment may cater to contingent, occasional and short-term needs, or it may be part of an explicit strategy of flexible reorganization (Christensen 1995). Obviously, the more the phenomenon can be interpreted in the latter terms, the more important it is. According to some authors (Cappelli 1999; Schmid and Storrie 2001), in recent years the use of non-standard work arrangements has been part of a more general tendency for firms operating in the new economy to regulate all workers more by adopting market or commercial criteria rather than by seeking to integrate them into the corporate system - as evidenced by the fact that elements of commercial contracts are being increasingly incorporated into the contracts of permanent employees (via various forms of target setting and performance-related pay) (Schmid a...

Table of contents

• Front Cover
• Regulating New Forms of Employment
• Routledge/Eui studies in the Political Economy of Welfare
• Title
• Copyright
• Dedication
• Contents
• Illustrations
• Contributors
• Acknowlegments
• Introduction
• 1 New Forms of Employment and New Problems of Regulation
• 2 Flexible Arrangements Within Companies: Strengths and Weaknesses
• 3 Building Local Institutional Arrangements for Flexicurity in France
• 4 Non-Standard Employment: Experiments in Regulation at the Local Level in Germany
• 5 Between Institutionalized Concertation and Experimentation: the Regulation of New Forms of Employment in Lombardy
• 6 Inclusion Strategies: Regulating Non-Standard Employment in the ‘Third Italy’
• 7 Catalonia: The Difficulty of Transferring Locally Concerted Solutions into Firms
• 8 The West Midlands: A mixture of Promising and Faltering Steps
• 9 What Regulation for the New Forms of Employment?
• References
• Index