Sunday

4th Jun 2023

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.

The EU needs to foster tech — not just regulate it

The EU's ambition to be a digital superpower stands in stark contrast to the US — but the bigger problem is that it remains far better at regulation than innovation, despite decades of hand-wringing over Europe's technology gap.

Latest News

  1. Spanish PM to delay EU presidency speech due to snap election
  2. EU data protection chief launches Frontex investigation
  3. Madrid steps up bid to host EU anti-money laundering hub
  4. How EU leaders should deal with Chinese government repression
  5. MEPs pile on pressure for EU to delay Hungary's presidency
  6. IEA: World 'comfortably' on track for renewables target
  7. Europe's TV union wooing Lavrov for splashy interview
  8. ECB: eurozone home prices could see 'disorderly' fall

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Stakeholders' Highlights

  1. InformaConnecting Expert Industry-Leaders, Top Suppliers, and Inquiring Buyers all in one space - visit Battery Show Europe.
  2. EFBWWEFBWW and FIEC do not agree to any exemptions to mandatory prior notifications in construction
  3. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  4. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  5. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  6. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality

Join EUobserver

Support quality EU news

Join us