Address By Minister Kelleher at the ICTU Conference on Flexicurity, Croke Park,

26^th September, 2007

I welcome this opportunity to speak at this conference on the important theme of flexicurity.

As you are well aware, the labour market is changing at an increasingly fast pace due, in the main, to the impact of globalisation and demographic factors. Whether we like it or not we have no choice but to function in this environment and, to remain competitive, enterprises and workers must be open to change. This is both a challenge and an opportunity. We cannot allow it to pass us by, we must become involved and respond in a positive manner. Adaptability is key for both employers and employees and this is now being encapsulated in the concept of flexicurity.

The term flexicurity refers to the combination of labour market flexibility and security for workers. It is based on the view that the flexibility of enterprises and the security of workers are mutually reinforcing and are not in competition with one another. It is seen as playing a vital role in the achievement of the objectives of the revised Lisbon Agenda for Growth and Jobs. The aim is to create an environment conducive to the creation of more jobs while at the same time promoting the active inclusion of all in the labour market by helping individuals adapt and to take advantage of new opportunities. While seeking to increase employment levels across the EU, the focus is also on creating better quality jobs so that people can move up the value chain in terms of job satisfaction, skills level, work-life balance, living standards, mobility options etc.

Much of the debate has centred around the Danish version of flexicurity. The Danish model is based on a combination of flexible labour laws, generous welfare payments and active labour market policies supported by high taxation. The system involves a mutual obligations approach, which places rights and duties on all the players. The availability of the high welfare payments is counter balanced by requiring the unemployed to actively seek jobs and to take up employment or training.

The Danish model is the outcome of a long historical process involving a series of compromises and the development of the welfare state. At EU level it has been the catalyst for a very lively debate on the need for Europe to respond to challenges and opportunities of globalisation. Arising from these discussions it was agreed and accepted by all Member States that there was not a “one size fits all” approach to flexicurity. Each Member State must develop the pathway best suited to its own situation and tradition. The concept of flexicurity put forward in the Commission Communication and which forms the basis of the discussion here today is broader than the so-called golden triangle (flexible labour market, generous welfare benefits and active labour market measures) of the Danish model. It therefore gives greater scope and flexibility to Member States to develop a package/pathway best suited to their particular circumstances.

The Commission Communication defines flexicurity as having four main components

• (a) Flexible and reliable contractual arrangements (both from the perspective of the employer and the employee) through modern labour laws and work organizations;
• (b) Comprehensive lifelong learning (LLL)strategies to ensure the continual adaptability and employability of workers;
• (c) Effective active labour market policies (ALMPs) which effectively help people cope with rapid change reduce unemployment spells and ease transitions to new jobs;
• (d) Modern social security systems, which provide adequate income support, encourage employment and facilitate labour market mobility.

These elements are not new and are already contained in the European Employment Guidelines under the Lisbon Strategy for Growth and Jobs

The Communication is positive in its approach. It emphasises the need for employment security, indicates that there must be more winners from the process of change than heretofore and encourages an outcome of more upwards mobility for employees.

The social partnership process in Ireland has provided a good mechanism for balancing flexibility and security and has played a vital role in the economic and social developments over the past 20 years. This has been recognised by the Commission and has been given as an example of how flexicurity policies can work. Much has been achieved in Ireland under the title flexicurity without calling it that and the positive developments in the economy and in employment growth are due to our particular take on this matter. Social Partnership has created the conditions, which enable us to respond to new challenges and opportunities by being adaptable to ever changing economic environment. The Communication emphasises the need for social dialogue in the development of flexicurity policies. Our experience has shown that such engagement is essential and the well-established partnership process will continue to provide the appropriate mechanism to achieve the balance between flexibility and security.

I note that the ETUC has some concerns to the effect that flexicurity will involve workers being asked to give up on job protection in return for employment security. This may be the case if a particular model of flexicurity, which involves a low level of employment protection, was introduced. This does not reflect the situation in Ireland. The various measures/initiatives introduced under the Partnership Agreements ensure that the flexicurity pathway appropriate to our particular situation and national traditions is being followed. They are designed to achieve a balance between employment rights, welfare benefits, income tax and training/upskilling. This ensures that there is an incentive for people to work and to make the necessary transitions from unemployment to employment and from one job to another or to another level within the same employment. As has been the situation up to now the flexicurity pathway appropriate to Ireland will continue to be developed through the partnership process.

Towards 2016 provides a very good example of what can be achieved. Measures have been agreed across the various elements of flexicurity. Of particular significance are the chapters dealing with the lifecycle framework and employment rights.

The lifecycle framework places the individual at the centre of policy development and delivery, by assessing risks and offering supports at key stages in life. This lifecycle includes transitions between non-employment (unemployed/inactive), employment and within employment, with training acting as a vital ingredient for the individual who finds themselves in any of these circumstances. A substantial increase in funding has been allocated to support training and skills development over the next number of years. The level of investment of €7.7 billion over the period of the National Development Plan 2007-2013 reflects the importance the Government attaches to maintaining an educated, skilled and adaptable workforce in Ireland and to advancing the lifelong learning agenda.

Ireland has a comprehensive and strong corpus of employment rights legislation to ensure that workers rights are fully protected, with new legislation introduced in recent years to protect those employees who are engaged in more flexible type work such as part-time employment and fixed-term contracts. The establishment of the National Employment Rights Authority (NERA) to ensure better compliance across the economy generally represents our ongoing commitment to the protection of workers rights. This together with our ongoing efforts to achieve a balance between maintaining workers security in terms of their conditions of employment and the flexibility required by employers in terms of organising work and/or work patterns is a good example of flexicurity. In this regard The Green Paper on Modernising Labour Law, published by the Commission, is very relevant. The Green Paper looks at changes in work practices including the move to more flexible working patterns and the different rights that come with an individual’s employment status. Its primary focus is to engender a debate on the key challenges in modernising labour law and to provide a platform for the exchange of good practice. It therefore shares common ground with the theme of flexicurity and there is some overlap between the two debates.

The Communication on Flexicurity is being considered across all Member States with a view to developing a set of common principles for approval at the Employment and Social Affairs Council in December. The Commission has put forward a draft set of common principles, which I believe is a very good starting point. The principles reflect the key idea that there is no single model of flexicurity and that Member States must be free to develop the mix of policies best suited to its own particular situation. The Communication moots the idea that a comprehensive flexicurity view – as opposed to separate policy measures – is how arounded debate on greater adaptability can be progressed. I therefore welcome the initiative taken by ICTU to have this discussion here today and I look forward to getting your views, which will help to inform our contribution to the December Council.

ENDS/LA253