The name is absent

Flexibility and security: an asymmetrical relationship?

of working time, temporary agency work, etc.), as well as a relaxation of collective dismissals proce-
dures, especially in firms with less than 50 employees. Limited labour mobility, both occupational and
geographical, high firing costs for white-collar workers and the minimum wage provision for newly
recruits constitute the main rigidities that persist in the formal labour market.

However, the persisting relative strictness of EPL in Spain and Greece, does not mean that em-
ployers do not still enjoy significant margins of employment flexibility allowing them to minimize
non-wage labour costs (social security contributions, severance pay, annual leave, social benefits, etc.),
by having recourse to atypical, irregular and even undeclared forms of work (see below, degree of
enforcement of regulations). Moreover, in these 2 countries, relatively strict EPL is associated with
low labour market spending, suggesting a trade-off between income and employment security.

In the Netherlands and Denmark, increasing labour market deregulation and low employment
protection even for permanent employees (in the case of Denmark), have been offset by providing
a comprehensive safety net to the unemployed through the welfare institutions (especially through
unemployment insurance).

A common practice to circumvent restrictive EPL is to introduce new legislation “on top” of the
pre-existing one that allows a wider recourse to certain forms of flexible labour —such as fixed-term
contracts, temporary agency work, bogus self-employment, on-call work, zero-hours contracts, etc.
This practice is known as “institutional layering”, a concept used by Streek and Thelen in their typol-
ogy of incremental institutional change.⁵⁷

A meaningful discussion of the appropriateness of the EPL index as a measure of labour market
efficiency should, however, take into account the fact that indicators used by OECD and other inter-
national organisations are exclusively based on the prevailing rules and decrees and do not take into
account their enforcement and what actually happens at the workplace and in the real economy.

57 Streeck, W. & K. Thelen, 2005, Beyond continuity: institutional change in advanced political economies, Oxford University Press.
Mentioned in Houwing (2009).

Page • 71

<<   68   69   70   71   72   73   74   >>

More intriguing information