Friday

21st Jan 2022

Opinion

Teleworking and the case for a new EU labour contract

  • Even EU Council president Charles Michel has been forced into videoconferencing due to the coronavirus pandemic (Photo: Council of the European Union)

While we cannot yet discern the pandemic's long-term labour market impacts, one thing is clear: for many workers, jobs have been decoupled from location.

Now, the European Union must recognise that fact and adjust to it by adopting new rules to facilitate that new work reality.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

That will entail a unified work contract suited to this increasingly mobile economy.

This would just be the logical reaction to circumstances the EU governments created with their reactions to the Covid-19 outbreak.

To limit its spread, governments asked companies and workers to avoid congregating in the workplace.

Widespread remote work proved feasible and productive. According to a Eurofound survey circulated in April, nearly four out of 10 EU workers started to work from home as a result of the outbreak.

Permanent remote work is not itself new, especially given tight labour markets in recent years.

It made a lot of sense for businesses to hire from a distance in the US when unemployment was at a record-low, effectively expanding the pool of available workers when it was too tight locally. The US has a distinct advantage in this area: Unlike the EU, it is one labour market.

But the pandemic is prompting many workers to wonder why they, too, cannot work on an ongoing basis from somewhere other than their office or a small apartment in the same city.

It was a popular topic of discussion in expat Facebook groups, especially in summer.

At the same time, companies are wondering what the new balance will be between working from home and sitting in the office.

Some businesses have come up with bold solutions: Twitter's CEO Jack Dorsey announced in May that employees can work from home forever.

A growing number of companies in the US are targeting their talent acquisition efforts toward different areas around that country under the assumption that remote work can be performed from anywhere.

Glassdoor, the job-posting site, says its remote job openings increased by 28 percent from a year ago, even while overall listings are declining.

But doing the same in Europe would involve greater complexity since companies would need to comply with several different labour and tax codes.

'Portability' problems

Individuals are free to move across the EU, but professional and economic barriers still exist for companies (different contracts) and workers (portability of welfare rights) to do so.

These issues are well-known, but reconciling labour codes has been hard to achieve because such market regulation sits at the core of the dialogue between social partners, making a potential "Brussels" intervention unpopular.

The wide spectrum of labour protection laws, from more noninterventionist to restrictive, does not help achieve this convergence.

As a result, only large companies can afford to hire across different European labour markets. Smaller companies still hire workers in other countries, but the transaction costs are prohibitive.

For workers, getting hired from a company in another country is not easy: often they must move or, when possible, work on a freelance basis, often a less attractive option.

This creates a competitive disadvantage for smaller EU companies, who don't have access to as large labour markets, and for workers, who are able to get fewer jobs.

Single contract

A unified EU contract would solve this problem.

The EU should not replace 27 national agreements, but should create a 28th one which serves as a second option in each EU country, especially for highly-mobile workers.

For each new job workers could be given the choice between the 'national' contract and the EU one.

The system could be constructed in such a way that moving permanently or for some months per year to another country would involve fewer legal hurdles compared to the spaghetti bowl of 27 different legislations.

The idea already circulated in 2013 but never gained traction. The pandemic makes it worth discussing again.

What are the potential costs? More research is needed to investigate how much this novelty can break existing equilibria.

Two issues might generate tensions, both related to the cross-country heterogeneity that exists in Europe in terms of wages and tax levels.

On the one hand, high-paid and high-productive workers in Nordic countries, for example, may be afraid to lose out to lower-cost countries in the east or in the south.

And on the other, high-tax countries might fear their workers moving more easily to where they can benefit from similar welfare provisions for a lower contribution.

It is not clear if a handful of mobile workers can really create competition between systems, but for the sake of creating a true EU labour market the idea is worth discussing again in these disruptive times.

Author bio

Ilaria Maselli is an economist at The Conference Board Europe, part of the New York-based global think-tank The Conference Board.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

Why EU beats US on green pandemic recovery

The United States recovery focused on a number of important issues, including unemployment benefits and funding for health care providers, but lacked any programs directed towards addressing pollution, renewable energy industries, and clean technology improvements.

Recovery plan slammed for failing to tackle climate crisis

EU leaders agreed that about a third of the €750bn recovery package and the €1.074 trillion seven-year budget will be invested in projects contributing to climate action. However, environmental activists said that the package falls short on climate safeguards.

MEPs call for workers to have 'right to disconnect'

MEPs called for a new law guaranteeing workers can 'disconnect' outside work hours, without repercussion. But they also passed a last-minute amendment, calling on the commission to delay any legislation for three years.

Macron's vision will hit EU Council veto buffers

President Emmanuel Macron's address to the European Parliament championed a bold and ambitious pro-European agenda. There is one problem though - the plans rely on a system of governance that has gridlocked the EU for over a decade.

Tomorrow MEPs can end EU animal export horror show

On Thursday, MEPs must press for a ban on all live exports outside the EU, and call for overall journey times within the EU to be limited to four hours for poultry and rabbits, and eight hours for other animals.

Column

An EU-Africa 'equal partnership' must tackle past and present

Competition is fierce and getting African leaders' attention is no easy task. US president Joe Biden has his own Africa summit, and Turkey, Japan, Russia and - most importantly - China, also have Africa forums up and running.

News in Brief

  1. 'No embargo' on meetings with Putin, EU says
  2. Austria to fine unvaccinated people €3,600
  3. MEP: Airlines should start paying for CO2 sooner
  4. Twitter forced to disclose what it does to tackle hate speech
  5. EU watchdog calls for ban on political microtargeting
  6. MEPs adopt position on Digital Service Act
  7. Blinken delivers stark warning to Russia in Berlin
  8. Hungary's Orbán to discuss nuclear project with Putin

Gas and nuclear: a lose-lose scenario for Eastern Europe

The strong advocacy of Central and Eastern European capitals for including fossil gas and nuclear power in the EU's green taxonomy only leads to another unsustainable energy lock-in for the region, leaving their grid exposed to third-country coercion.

Latest News

  1. Lawyers threaten action over new EU gas and nuclear rules
  2. MEPs urge inclusion of abortion rights in EU charter
  3. EU orders Poland to pay €70m in fines
  4. Dutch mayors protest strict lockdown measures
  5. Macron promises strong EU borders
  6. MEPs to crackdown on digital 'Wild West'
  7. Macron calls for new security order and talks with Russia
  8. Macron's vision will hit EU Council veto buffers

Join EUobserver

Support quality EU news

Join us