Fact Sheets on the European Union
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Employment policy

The European employment strategy, dating back to 1997, established a set of common objectives for employment policy and contributed to ‘soft coordination’ among the Member States through a monitoring process and connected funding instruments. Creating more and better jobs was one of the main goals of the Europe 2020 strategy. Since the turn of the decade, the Commission has proposed new and more ambitious targets in the areas of employment, skills and social protection in order to build a strong social Europe by 2030. EU law is relevant in certain areas, even if the responsibility for employment and social policy lies primarily with national governments.

Legal basis

Article 3(3) of the Treaty on European Union (TEU) and Articles 8-10, 145-150, 156-159 and 162-164 of the Treaty on the Functioning of the European Union (TFEU).

Objectives

According to Article 3 TEU, the Union has the duty to aim at full employment and social progress. The horizontal clause in Article 9 TFEU lays down that the objective of a high level of employment must be taken into consideration in the definition and implementation of EU policies and activities. Member States and the Union are also tasked with working towards the development of a coordinated strategy, particularly with regard to the promotion of a skilled, trained and adaptable workforce, and labour markets responsive to economic change, as described in Article 145 TFEU.

Achievements

A. From the early stages (1950s to 1990s) to the post-2020 targets

As long ago as the 1950s, workers benefited from ‘readaptation aid’ in the European Coal and Steel Community. Aid was granted to workers in the coal and steel sectors whose jobs were threatened by industrial restructuring. The European Social Fund (ESF) (2.3.2 European Social Fund), created in 1957, was the principal tool for combating unemployment.

In the 1980s and early 1990s, action programmes on employment focused on specific target groups, and a number of observatory and documentation systems were established.

In a context of high unemployment in most EU countries, the White Paper on growth, competitiveness and employment (1993) launched a debate on the EU’s economic and employment strategy by bringing the issue of employment to the top of the EU agenda for the first time.

The new chapter on employment in the Amsterdam Treaty (1997) provided the basis for setting up the European employment strategy (EES) and the permanent Employment Committee with advisory status to promote the coordination of the Member States’ employment and labour market policies. The competence for employment policy remains, however, primarily with the Member States. The inclusion of a ‘social protocol’ in the Treaty enhanced the involvement of the social partners (2.3.7 Social dialogue).

The extraordinary Luxembourg Job Summit in November 1997 launched the EES together with the open method of coordination - the so-called Luxembourg process, which is an annual coordination and monitoring cycle for national employment policies based on the Member States’ commitment to establishing a set of common objectives and targets. The EES placed a high level of employment on the same footing as the macroeconomic objectives of growth and stability.

In 2000, the Lisbon European Council agreed on the new strategic goal of making the EU ‘the most competitive and dynamic knowledge-based economy in the world’, embracing full employment as an overarching objective of employment and social policy, and on concrete targets to be achieved by 2010 (the Lisbon strategy).

Following the 2007-08 financial crisis, the Europe 2020 strategy was adopted in 2010 and the European Semester was introduced as the mechanism for financial and economic policy coordination. This 10-year strategy for jobs and smart, sustainable and inclusive growth defined a number of headline targets for the first time, such as increasing the labour market participation of people aged 20 to 64 to 75% by 2020. All headline targets had to be translated into national targets by the Member States.

In 2017, the Commission presented the European Pillar of Social Rights (EPSR), which sets out 20 key principles and rights to support a renewed process of convergence towards better living and working conditions. These are divided into three categories: (i) equal opportunities and access to the labour market, (ii) fair working conditions, and (iii) social protection and inclusion. The EPSR is accompanied by a ‘social scoreboard’ to monitor progress. At the Social Summit in Gothenburg in November 2017, Parliament, the Council and the Commission highlighted their shared commitment by adopting a common proclamation on the EPSR.

The action plan on the implementation of the EPSR of 4 March 2021 set out three new EU headline targets to be achieved by the end of the decade, including the following:

  • Employment: at least 78% of the population aged 20 to 64 should be in employment by 2030;
  • Skills: at least 60% of all adults should participate in training every year.

B. Strengthening coordination and monitoring

The annual monitoring cycle for employment policies within the European Semester includes the following components:

  • Employment guidelines, drawn up by the Commission and adopted by the Council after consulting Parliament;
  • A joint employment report, published by the Commission and adopted by the Council;
  • National reform programmes;
  • Country reports and country-specific recommendations, drawn up by the Commission, with the latter being adopted by the Council.

The four employment guidelines (Article 148 TFEU) present strategic objectives for national employment policies and contain policy priorities in the fields of employment, education and social inclusion. The employment guidelines form part of the eight integrated guidelines, which also feature four broad economic policy guidelines (Article 121 TFEU).

In 2018, the employment guidelines were aligned with the principles of the EPSR (2.3.1 Social and employment policy: general principles). In agreement with Parliament, these were maintained for 2019. In 2020, they were further refined to integrate elements relating to the consequences of the COVID-19 crisis, the green and digital transitions, and the UN Sustainable Development Goals. In 2021, they were carried over, although the recitals were adjusted in line with the outcomes of the Porto Social Summit and the EPSR action plan. The Commission proposes revising the guidelines for 2022 by adapting the text to the post-COVID-19 environment, bringing in more elements relating to fairness in the green transition, reflecting recent policy initiatives and adding policy elements of particular relevance in the context of the Russian invasion of Ukraine.

As a key monitoring tool used in the European Semester, the Commission proposed a revised social scoreboard (annexed to the EPSR action plan) to better reflect the policy priorities and actions set out in the action plan. The social scoreboard consists of 17 headline indicators, endorsed by the Council, assessing the employment and social performance of Member States in three broad dimensions: (i) equal opportunities, (ii) fair working conditions, and (iii) social protection and inclusion.

C. Binding legal acts – EU law

Based on the provisions laid down in the TFEU relating to the fields of employment and social affairs, a number of directives, regulations and decisions have been adopted to ensure minimum standards across the EU Member States in the following areas:

  • Health and safety at work: general and specific rights and obligations, work equipment, specific risks, e.g. dangerous substances, carcinogens (2.3.5 Health and safety at work);
  • Equal opportunities for women and men: equal treatment at work, pregnancy, maternity leave, parental leave (2.3.9 The fight against poverty, social exclusion and discrimination);
  • Protection against discrimination based on sex, race, religion, age, disability and sexual orientation (2.3.9 The fight against poverty, social exclusion and discrimination);
  • Working conditions: minimum wages, part-time work, fixed-term contracts, working hours, employment of young people, informing and consulting employees (2.3.6 Workers’ right to information, consultation and participation; 2.3.7 Social dialogue);
  • Supporting services: Decision No 573/2014/EU of the European Parliament and of the Council of 15 May 2014 on enhanced cooperation between Public Employment Services (PES), which was prolonged for a further seven years (2021-2027) in November 2020.

Further EU law supports the fundamental freedoms governing the movement of persons, services and capital within the EU (single market) as follows:

  • Free movement of workers: equal treatment, access to social benefits (2.1.5 Free movement of workers);
  • Posting of workers: duration, pay, sectors covered (2.1.13 Posting of workers).

D. Coordination through recommendations and other policy initiatives

In addition to the so-called ‘hard law’ listed above, further measures help to increase coordination among the EU Member States through ‘soft law’. The latter encompasses Council recommendations, which are non-binding legal acts, and other policy initiatives introduced by the Commission. These can have a considerable impact, if well prepared, supported and monitored at EU level.

The European Youth Guarantee, established by a Council recommendation of April 2013, aims at ensuring that all people under the age of 25 receive a good-quality offer of employment, continued education, an apprenticeship or a traineeship within four months of becoming unemployed or leaving formal education. In July 2020, the Commission launched the Youth Employment Support package, built around four strands: a reinforced Youth Guarantee, vocational education and training, renewed impetus for apprenticeships and additional measures supporting youth employment. In its recommendation of 30 October 2020 on a bridge to jobs, the Council called on all EU countries to implement the reinforced Youth Guarantee.

A Council recommendation on the integration of the long-term unemployed into the labour market was adopted in February 2016.

Numerous policy initiatives have been adopted in the area of skills, including the European Skills Agenda of 2020, building upon the 2016 Agenda and containing 12 actions focused on skills for jobs, in order to ensure that the right to training and lifelong learning is fulfilled across Europe.

In May 2020, in response to the COVID-19 outbreak and its social and economic consequences, a new temporary European support instrument was established, known as ‘Support to mitigate Unemployment Risks in an Emergency’ (SURE). It provides financial assistance for Member States to protect jobs and workers through short-time work schemes or similar measures.

In March 2021, the Commission presented a recommendation on effective active support to employment following the COVID-19 crisis. It outlines a strategic approach to promoting the transition from emergency measures taken to preserve jobs during the pandemic towards new measures needed for job creation and job-to-job transitions.

The strategic framework on health and safety at work 2021-2027 (June 2021) identifies key challenges and strategic objectives for health and safety at work and presents actions and instruments to address these.

The European care strategy (September 2022) aims to ensure high-quality, affordable and accessible care services across the EU and improve the situation for both care receivers and the people caring for them, whether professionally or informally. The strategy is accompanied by two recommendations for the Member States on the revision of the Barcelona targets on early-childhood education and care, and on access to affordable, high-quality, long-term care.

E. Supporting EU funding instruments

A number of EU funding programmes provide support in the area of employment.

  • The European Social Fund Plus (ESF+) (2.3.2 European Social Fund) is the main EU instrument for investing in people and brings together a number of funds and programmes, notably the ESF, the Youth Employment Initiative, the Fund for European Aid to the Most Deprived and the Employment and Social Innovation programme. ESF+ aims to tackle the socio-economic consequences of the COVID-19 pandemic, promote high employment levels, build social protection and develop a skilled and resilient workforce that is ready for the transition to a green and digital economy.
  • The European Globalisation Adjustment Fund for Displaced Workers supports people who have lost their jobs due to structural changes in world trade patterns, digitalisation, automation and the transition to a low-carbon economy. It has an annual budget of EUR 210 million for 2021-2027. It can fund between 60% and 85% of the cost of projects designed to help workers who have been made redundant find another job or set up their own businesses.
  • The Recovery and Resilience Facility is the centrepiece of NextGenerationEU. It entered into force on 19 February 2021 and makes EUR 723.8 billion available to support reforms and investments undertaken by the Member States until 31 December 2026. The aim is to mitigate the economic and social impact of the COVID-19 pandemic and make European economies and societies more sustainable and resilient, and better prepared for the challenges and opportunities of the green and digital transitions.

Another instrument, set up by the Commission to help the Member States fund their COVID-19 crisis response, is the Coronavirus Response Investment Initiative. The funds go to healthcare systems, small and medium-sized firms, labour markets and other vulnerable parts of EU countries’ economies.

Furthermore, to finance the SURE instrument, the Commission has been issuing SURE social bonds.

The Just Transition Fund (JTF), with an overall budget of EUR 17.5 billion, aims to alleviate the social and economic costs resulting from the transition towards a climate-neutral economy by helping people adapt in a changing labour market. The JTF is the first pillar of the Just Transition Mechanism, which is part of the European Green Deal.

Role of the European Parliament

Parliament’s role in this area has developed gradually. Since the Amsterdam Treaty came into force, Parliament must be consulted on employment guidelines before they are adopted by the Council. In addition, the open method of coordination has enhanced the role of the national parliaments, which are expected to be involved in the setting and achievement of national targets.

Parliament gave its strong backing to the Europe 2020 strategy. A number of the initiatives aimed at combating youth unemployment stem from Parliament proposals for concrete, practical actions, namely the EU Youth Guarantee and minimum standards on internships. Since 2010, Parliament has strongly supported the establishment of the Youth Guarantee Scheme and monitors its implementation. In its resolution of 17 July 2014 on youth employment, it called for an EU legal framework introducing minimum standards for the implementation of the Youth Guarantee, including the quality of apprenticeships and also covering people aged 25-30. In a resolution adopted in 2018 on the EU’s next long-term budget, Parliament called for a significant increase in funding for the implementation of the Youth Employment Initiative. On 8 October 2020, Parliament adopted a resolution expressing concern about the voluntary nature of the Youth Guarantee (currently a Council recommendation) and called on the Commission to propose a binding instrument. Parliament also condemned unpaid internships and urged the Commission to review existing European instruments such as the quality framework for traineeships and the European framework for quality and effective apprenticeships. Parliament insisted that quality criteria be incorporated into the offers made to young people, including the principle of fair remuneration for trainees and interns, access to social protection, sustainable employment and social rights.

Furthermore, Parliament supported the approach taken in the recommendation on long-term unemployment in its resolution of 29 October 2015. Parliament’s intensive work on skills development had an impact on the European Skills Agenda.

Parliament’s resolution of 13 March 2019 on the European Semester stressed that the EU’s social goals and commitments are just as important as its economic goals. Since the outbreak of COVID-19, Parliament has been trying to mitigate the negative consequences of the crisis, particularly for the labour market. In a resolution adopted on 10 July 2020 on EU employment guidelines, MEPs called for radical measures to cushion the shock caused by the pandemic, in particular a revision of the forthcoming guidelines in light of the situation, and highlighted the need to tackle youth unemployment through an improved Youth Guarantee.

In its resolution of 17 December 2020 on a strong social Europe for just transitions, Parliament called for legally enforceable social rights and for specific social objectives to be reached by 2030.

 

Monika Makay