Flexibilisation and regulation of the employment system: options and effects

Abstract

"1. In view of the severe employment crisis in the European industrial countries, the subject of labour market flexibility is increasingly becoming the focus of public attention. Apossible need for flexibility is, however, not only to be seen in the fields of labour costs, working hours and legal employment protection, but also with respect to functional aspects such as the mobility of employees within a company or the necessary aspect of passing on knowledge and abilities. 2. Wages policy must surrender more to its responsibility in employment policy issues. More scope for wage flexibility legitimised by the social partners would be desirable, as this would facilitate a subtly differentiated adjustment of wage costs, orientated towards employment objectives, in cases when a company experiences economic difficulties due to cyclical and/or structural changes. A possible starting point for this would be in particular profit-related remuneration components, which could be made use of more frequently. In addition, it concerns measures for limiting the wage-dependent social security contributions and therefore for relieving the costs of the work factor (by financing social security more from taxes). 3. An issue of particular interest with regard to employment policy is the combination of increased flexibility of working hours and reductions in working hours. Increased flexibility of working hours can create considerable potential for employment creating measures of reductions in working hours. There would be potential for such reductions in the introduction of innovative shift models with regard to the working week, in the use of flexible models of annual working time by reducing or even avoiding overtime, or in the extension of operating hours by creating new part-time jobs. 4. The relationship between stability and flexibility in the employment system can be clarified using the example of protection against dismissal. Here it must be taken into consideration in principle that stability in one area of employer/worker relations, e.g. in the form of dismissal protection, demands flexibility in other areas, e.g. with regard to working hours and/or wages. In this respect completely inflexible employer/worker relations would have fatal consequences with regard to employment policy. On the other hand it must be considered that other areas of flexibility, e.g. a multifunctional use of workers, require stable basis conditions. 5. So-called 'atypical employment' (e.g. part-time work, home work, temporary work) can, but need not nesessarily, have a precarious character. In this respect banning such employment would be absurd and unnatural. In modern industrial societies what matters is that the institutional framework supports or at least does not hinder the materialisation of the desired voluntary arrangement of atypical forms of employment. An important precondition for this would be placing the workers in atypical employment on an equal legal footing with the so-called 'normal' workers as far as is possible. The principle is therefore not one of exclusion, but one of the greatest possible degree of integration of these employment forms into the employment system as a bridge to 'normal' employment. 6. In principle the flexibility of employment relationships is a necessary precondition for firms and workers being able to adapt to changing challenges within and outside the company, so that existing employment relationships can be reorganised or dissolved and re-established. Here it can not be simply a matter of maximum labour market flexibility in general, but a matter of well considered modernisation of the institutions and regulations which affect the labour market." (Author's abstract, IAB-Doku) ((en))

Cite article

Walwei, U. (1996): Flexibilisierung und Regulierung des Beschäftigungssystems: Optionen und Effekte. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 29, No. 2, p. 219-227.