Insecurity and Limited Flexibility:An example from the construction sector in Bulgaria.

Darina Peycheva (ISKS-BAS)

1. The flexicurity concept: key principles

2. Questioning the main flexicurity principles

3. Main line of arguments

4. The walqing study and the data used

5. Short description of the construction sector

6. Flexicurity and consequences on workers: the different perspectives

7. Conclusions

Presentation overview

The flexicurity concept: key principles

1) An integrated strategy to enhance at the same time flexibility and security in the labour market: Flexibility and security should be considered not as contradictions but as mutually reinforcing and complementary components. (COM, 2007)

2) Combines the interests of both employers and workers: Enterprises and workers should both benefit from flexibility and security. (EMCO,2009)

Questioning the key flexicurity principles

1) Flexibility and security at the same time: - Do the dimensions of flexicurity run in same direction? - - Do flexible employment arrangements correspond to high levels of security (at the work place)?- Do labour market policies effectively support people to manage with periods of unemployment and transition from one work place to another?

2) Flexibility and security benefit interests of both employers and workers:- Flexibility for whom? Are the temporary contracts or the part time work, or the unpaid leaves workers` choice?

Main line of arguments

1) The paper questions the quality of employment in the construction sector, arguing that some of the forms of flexibility and security have negative consequences on workers.

2) The application of flexible forms of employment is considered negative with regard to decreased levels of employment security and forced flexibility in terms of fixed term labour contracts, reduced or irregular payment, reduced social security contributions, reduced working time, forced (paid or unpaid) leave, etc.

3) The forms of flexible employment in the construction sector is not an individual choice of the workers, but a forced choice imposed by the limited number of jobs with typical (standard) forms of employment (e.g. open-ended labour contracts, 8-hours working day, regularly paid wage, etc.) and even a measure to stay in the labour market.

Operationalizing the flexicurity concept

Area of Job Quality Dimension Sub-

Dimension

Characteristics

A. Work Quality 1. Work organisation Job DemandsJob Resources

Workload, ambient demands, cognitive demands.Job discretion, social support, autonomous work groups

B. Employment Quality

2. Wages and payment system

Wage level, performance related pay, benefits;

3. Security and flexibility

Security Flexibility

Contractual status, Flexible working arrangements, Working time arrangement

C. Empowerment Quality

4. Skills and

development

Training provided, opportunity for development

5. Engagement and representation

Employee engagement practices

Source: Holman, 2010. [Based on the tripartite framework of Grimshaw and Lehndorff (2010)]

Summary of classification of job quality

Operationalizing the flexicurity concept at the level of the job- Job security and job flexibility are typically considered to be two key dimension of job quality. Job security is often considered in relation to job flexibility because a key aim of the European Employment Strategy is to promote flexible employment markets in which employees also have high levels of job security, a combination commonly referred to as flexicurity (Wilthagen and Tros, 2004).

Key forms of job security: 1) the security of tenure in relation to a specific job; 2) employment security – the security of having a job; and, income security – the security of income when ill or unemployed (Pacelli et al., 2008; Standing, 1999).

At the level of the job, flexibility is expressed in terms of temporary contracts, part-time contracts, working time arrangements (e.g., flexible leave, working time accounts).

- At the level of the job, flexicurity is expressed in the extent to which a job combines high levels of job flexibility and job security (Holman, 2010).

The WALQING study and the data used Background of the paper is a qualitative research done within the walqing project, integrating different levels of empirical data:

- expert interviews with social partners and public authorities (4 interviews with trade unionists, employers` associations representatives, executive agencies representatives)

- management of enterprises (3 interviews), and

-in-depth interviews with employees at different hierarhical levels (24 interviews).

In total 31 interviews in the construction sector.

Data was collected in 2011 and the beginning of 2012.

Short description of the construction sector

- Seriously hit by the economic and financial crises

(sharp descrease in all main economic indicators since2008)

- No longer such an important employer

(in the period 2008-2010, the share of persons employed has shrunk with 29%)

Core and periphery workers

- Predominantly private sector with small enterprises up to 50 persons (20488 in total or 97% of all construction enterprises, employing 54% of the workforce in construction )

Fixed term employment

Seasonal work (seasonal employment)

- Strong social partnership at sectoral level

Core and periphery, permanent and temporary, seasonality

“Actually, construction is a sector with obvious difference in core and periphery workers. The core workers – known as permanent construction company personnel consisted mainly of engineers, administration and highly qualified construction workers, and floating periphery workers of approximately 50% of the jobs (in company) working 6-7 months in the year, then this group get unemployed. Those workers are in the manual work“

(Employers` association representative)

Social partners` perspective on quality of employment: the aspect of contractual arrangements

„ Construction is done during the convenient time of the year, during the warm season. Then (during the winter, note of editor) workers go home, become unemployed, and then in the spring are being employed or self-employed again... And this is a normal practice.“ (Employers` association representative)

„Labour contracts are permanent in general. However there is a lot of seasonality. But the main core of workers, those with qualification, taking responsibilities, know-how, innovations, are employed on permanent contracts. These are the people that make the company... Although the crises these people have been kept. The labour productivity has increased because the low-qualified has been dismissed first. “ (Employers` association representative)

BulConstruction EcoConstruction GreenConstructionContractual arrangement

Open-ended contracts for administration and engineersFixed term contracts (for a certain period or until the completion of a certain work) for construction workers

Open-ended contracts Fixed term contracts for construction workersOpen-ended contracts for administration and technicians

Working time Recently no overtime work. Working time fixed to 8 hours per day. Practices of reduced working time mainly for the administration (4-hours per day/mainly for the administration), (forced) paid and unpaid leave for construction workers .

Fixed 8-hour working day for particular groups. Overtime for others (mainly rough construction workers).

Fixed 8-hour. No overtime recently.

Wage Hourly-paid scale depending on the qualification level

Fixed remuneration, accord system

Fixed remuneration, accord system

CLA at enterprise level

No No No

Company practices: contracts, wages,working time

The other side perception: workers` perspective on contract arrangements

„… the company could not afford to pay salaries and social security contributions for people who are actually not working for certain significant periods of time.“ (project manager, construction company)

„ - No, there are no open ended contracts for us. Our contracts are until the site is finished. Until certain operations are finished or until the entire site is constructed and finalized? Until the work is finished. The work at the site is finished and we go, we are dismissed, that’s it.“ (qualified onstruction worker)

The coverage of this practice goes beyond the studied companies:

„...We frequently change our employers. It is not like in the past when we had our jobs for three, four, sometimes five years in a row. Now we switch employers and sites. When there is nothing to be done and no sites to build the companies keep just very few people.” (qualified construction worker).

„… I am in the construction sector since 1998 and I have always switched sites. I take rests from time to time and then again. “ (qualified worker).

Flexibility in regard to contractual arrangements is not a workers` choice themselves and this aspect of flexibility do not work for the interests of the workers (in both the company or the labour market):

- at the level of the company fixed term employment means insecurity of losing a jobs;

- reduced working time or part time work mean reduced remuneration;

-unpaid leave (if longer than 30 days) means no social security contributions (no wage as well)

- quitting the job (before the expiry date) means less unemployment benefits (than dismissed by the employer or expiration of the contract)

Flexibility for whom? Concequencies on workers

Flexibility for whom? Concequencies on workers

- During unpaid leave, the employer covers social security contributions for a period of 30 working days. The rest of the unpaid leave (exceeding the 30 working days) is not considered period of insurance.

- Additionally consequences on workers differ depending on whether the worker have quit the job or the employer did it (or the contract has expired): unemployment benefits and period of receiving unemployment benefits differ.

- Right for unemployment benefits have the workers with covered social security contributions (unemployment insurance), at least 9 months within the last 15 months (before termination of the insurance).

- Unemployed with the right of unemployment benefit before the expiry of a 3-year period since the last benefit from an unemployment compensation, receive minimum unemployment benefit for a period of 4 months.

ConclusionsThe key aspects of flexibility (still) do not work the way they are expected as dimensions run in different directions.

The flexibility in the contractual arrangements is increasing but at the same time security to stay in the job or the security in the transition from unemployment to employment is decreasing.

Flexible contractual arrangements are mainly forced by the employers and imposed without considering the interests of workers.

Workers are just not in a situation to choose but to accept and adhere to the interest of the employer because otherwise they could be in danger of losing their jobs.

Change in one element provokes changes in others but in what direction?

Flexibility and security run in different directions and do not benefit simultaneously the interests of both employers and the workers.

www.walqing.eu

dpeicheva@gmail.com