Aliki Mouriki
introduction of a ‘presumption of an employment relation’ in the case of freelance work and ‘sub-
contracting’ self-employment. Temporary contracts, after 3 renewals without interruption, become
permanent, whilst flexible workers gain access to social benefits on the basis of the average hours
worked. The overall flexibility of the Dutch labour market is also related to the politics of wage
restraint and low wages for new entrants.
In Denmark, one of the long-standing structural features of the labour market system (dating
back to the early 1980s) was the combination of high labour mobility and a well developed social
safety net. This high mobility is made possible by the low level of employment protection (even for
permanent employees, who constitute the vast majority of the workforce) and the generous unem-
ployment insurance system, coupled by vigorous activation policies. This limited formal employment
protection applies to the major part of the labour market, irrespective of size of enterprise, sector
of activity or type of employee (Bredgaard et al., 2005). The successive labour market reforms intro-
duced since the early 1990s have been targeted at re-calibrating the balance between welfare support
and activation initiatives, with increasing emphasis on the latter (ibid.).
In Spain, an attempt to enhance labour market flexibility was first made in 1994, with the relaxa-
tion of the regulations regarding collective dismissals and the introduction of temporary employment
agencies. The disappointing results of the 1994 reforms and the dramatic increase of temporary
work, led to the 1997 Interconfederal Agreement for Employment Stability (AIEE). Unions agreed to reduce
dismissal costs for certain categories of workers in exchange for a commitment from employers to
reduce the proportion of temporary contracts (Royo, 2002 in Royo, 2007); a wage guarantee fund
was established to cover part of the cost of compensation of dismissed workers, whilst reductions in
severance pay were introduced, along with other incentives, in view of boosting job creation for the
most vulnerable workers. Reforms in 2001 and 2006 expanded these incentives to other groups and
granted subsidies for the conversion of fixed-term contracts to permanent ones. At the same time,
these reforms increased disincentives for the use of fixed-term contracts by introducing severance
pay after their expiry, limiting the number of renewals and setting a 24-month limit to the accumu-
lated duration of contracts. Part-time work was also encouraged since 1998—with the consent of
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