Flexibility and security: an asymmetrical relationship?
the informal sector as a result of mass immigration inflows; and (c) through the increasing violation
of labour and social security legislation, especially in SMEs (Karamessini, 2008b).
In Greece, labour market segmentation is significant and pervasive, not so much in the for-
mal labour market but because of the existence of several labour markets. On one hand, there is
the formal labour market consisting of two sub-systems: (i) the permanent employees working in
the public sector and in the public utilities, with a high degree of employment protection and a
very low degree of flexibility; and (ii) private sector employees with a varying degree of protec-
tion but greater flexibility than the first groups. On the other hand, there exists an informal or
“underground” labour market, the extent of which cannot be measured but only estimated, consist-
ing mostly of migrant workers, women and young people that fall outside the scope of any statutory
regulation and, hence, are highly flexible and, of course, insecure. This informal labour market is
totally deregulated and is characterised by wages not covered by the minimum rates stipulated in the
collective agreements, unfair dismissals, prolonged working hours, poor health and safety at work
conditions and a total absence of employment and social security rights. These three labour markets
operate in parallel and complementarily to each other.
In Spain, according to the EU 2008 Annual Progress Report, labour market segmentation is the
highest in Europe, mostly owing to the significant share of temporary work in total employment.
An agreement with the social partners in mid-2006 has helped to bring down the rate of fixed-term
contracts by 5 percentage points to 29.4% in the second quarter of 2008. Still, the rate of fixed-term
contracts for immigrant workers is extremely high (over 50%) and the unemployment rate for these
groups has increased more rapidly than for the rest of the population.
6.3.2. Institutional initiatives to enhance labour market flexibility
In the Netherlands, flexible working arrangements, in particular part-time work, flexi-time and
temporary work, have greatly contributed to the successful labour market performance and espe-
cially to high employment levels. As Visser (2005) observes, the 1996 ‘Flexibility and Security’ law
is a compromise, not just between employers and employees, but also within the unions between
workers with and those without stable jobs. A relaxation of statutory dismissal protection for regular
employment contracts is exchanged for an improvement in the rights of temporary workers and the
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