The European employment strategy (EES), dating back to 1997, established a set of common objectives for employment policy and contributed to ‘soft coordination’ among Member States with its monitoring process and connected funding instruments. Creating more and better jobs was one of the main goals of the Europe 2020 strategy. As Europe enters a new 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

Among the important principles, objectives and activities mentioned in the TFEU is the promotion of a high level of employment through the development of a coordinated strategy, particularly with regard to the creation of a skilled, trained and adaptable workforce and labour markets responsive to economic change. According to the horizontal clause in Article 9 of the TFEU, the objective of a high level of employment must be taken into consideration in the definition and implementation of EU policies and activities.

Achievements

A. From the early stages (1950s to 1990s) to the Europe 2020 strategy

As long ago as the 1950s, workers were benefiting from ‘readaptation aid’ in the European Coal and Steel Community (ECSC). 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 the early 1960s, was the principal weapon in 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 Employment title in the Amsterdam Treaty, which entered into force in May 1999, provided the basis for setting up the European Employment Strategy and the permanent, Treaty-based Employment Committee (EMCO) 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 European employment strategy (EES) together with the open method of coordination - the so-called Luxembourg process, which is an annual coordinating and monitoring cycle for national employment policies based on the Member States’ commitment to establishing a set of common objectives and targets.

The EES set 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).

The EES was reviewed in 2002 and re-launched in 2005, with the focus on growth and jobs. In order to simplify and streamline processes, a multiannual time framework was introduced (the first cycle being 2005-2008) and the employment guidelines were integrated into the broad economic policy guidelines (BEPG).

Following the financial crisis, in 2010, the Europe 2020 strategy was adopted 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 for the first time a number of headline targets, including:

  • Labour market: increase the labour market participation of people aged 20 to 64 to 75% by 2020;
  • Social inclusion and combating poverty: lift at least 20 million people out of the risk of poverty and exclusion;
  • Improving the quality and performance of education and training systems: reduce the proportion of early school leavers to 10% (from 15%), and increase the share of 30-34-year-olds having completed tertiary or equivalent education to at least 40% (instead of 31%).

All five headline targets had to be translated by Member States into national targets, taking into account their relative starting positions and national circumstances.

The monitoring cycle for employment policies includes the following components:

  • Employment guidelines, formulated by the Commission and adopted by the Council;
  • Joint Employment Report, published by the Commission and adopted by the Council;
  • National Reform Programme plans (NRPs);
  • Country reports and country-specific recommendations (CSRs), formulated by the Commission and the latter adopted by the Council.

The employment guidelines (Article 148 of the TFEU) present strategic objectives for national employment policies and contain policy priorities in the fields of employment, education and social inclusion. They combine policy priorities with a number of ongoing key elements. Four employment guidelines form part of the 10 integrated guidelines, which also feature six broad economic policy guidelines (Article 121 of the TFEU).

In 2018, the employment guidelines were aligned to the principles of the European Pillar of Social Rights (2.3.1 Social and employment policy: general principles). In agreement with the European Parliament, these have been maintained for 2019. The most recent guidelines (2020) integrate the four dimensions of the Annual Sustainable Growth Strategy (ASGS), and in particular its sustainability dimension, reflecting the narrative of the Commission’s January 2020 Communication entitled ‘A Stronger Social Europe for Just Transitions’, and integrating the UN Sustainable Development Goals (SDGs). They target four domains:

  • Boosting demand for labour (job creation, labour taxation and wage setting);
  • Enhancing labour and improving access to employment, skills and competences;
  • Better functioning of labour markets and effectiveness of social dialogue;
  • Promoting equal opportunities for all, fostering social inclusion and fighting poverty.

B. Post-2020 targets

The Action Plan on the implementation of the European Pillar of Social Rights (EPSR) of 4 March 2021 sets out three new EU headline targets to be achieved by the end of the decade in the areas of employment, skills and social protection.

  • Employment: at least 78% of the population aged 20 to 64 should be in employment by 2030. In order to achieve this overall goal, Europe must halve the gender employment gap, increase the provision of formal early childhood education and care and decrease the rate of NEETs aged 15-29 from 12.6% (2019) to 9%;
  • Skills: at least 60% of all adults should participate in training every year;
  • Social protection: the number of people at risk of poverty or social exclusion should be reduced by at least 15 million by 2030.

C. Strengthening coordination and monitoring

As a key monitoring tool used in the European Semester, the Commission, in agreement with Member States, proposed a revised Social Scoreboard to better reflect the policy priorities and actions set out in the Action Plan. The updated Social Scoreboard will also be used in the Economic Reform Programme (ERP) process for candidate countries to monitor progress on the implementation of the Pillar, subject to data availability.

The Social Scoreboard consists of 12 headline indicators that assess employment and social performances of Member States in three broad dimensions: (1) equal opportunities, (2) fair working conditions, and (3) social protection and inclusion. The set of indicators is intended to contribute to tracking progress towards the Pillar principles in a more comprehensive manner and to monitor the implementation of policy actions proposed by the Action Plan. In this context, the Commission will expand the scope and deepen the analysis of the Joint Employment Report and organise dedicated events to present progress on Pillar implementation.

D. Binding legal acts – EU law

Based on the provisions laid down in the Treaty on the Functioning of the European Union relating to the fields of employment and social affairs, a number of directives, regulations and decisions have been adopted to ensure minimum standards across 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: 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) 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):

  • 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).

E. Coordination through Recommendations and other policy initiatives:

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

  • Council Recommendation on establishing a European Youth Guarantee (April 2013), which aims at ensuring that all young 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 a resolution adopted on 8 October, Parliament expressed its desire for the Youth Guarantee to become binding;
  • European Alliance for Apprenticeships (launched in July 2013);
  • Council Recommendation on a Quality Framework for Traineeships (March 2014);
  • Council Recommendation on the integration of the long-term unemployed into the labour market (February 2016);
  • European Solidarity Corps (2016) for young people, which focuses on providing assistance in the event of natural disasters or helping to tackle social issues in communities;
  • Skills Agenda for Europe (June 2016). This policy package brought together 10 key actions to equip citizens with skills that are needed in the labour market. Building upon the 2016 Skills Agenda, in July 2020 the Commission presented a new five-year plan to help individuals and businesses develop more and better skills. It contains 12 actions focused on skills for jobs, in order to ensure that the right to training and lifelong learning becomes a reality across Europe.

To improve working conditions, including social protection and fair mobility, all three EU institutions supported the European Social Pillar in a common proclamation in November 2017 (2.3.1 Social and employment policy: general principles).

In May 2020, in response to the COVID-19 outbreak and its social and economic consequences, a new European instrument was established for temporary 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 July 2020, the Commission launched the Youth Employment Support package built around four strands that together provide a bridge to jobs for the next generation: a reinforced Youth Guarantee, vocational education and training, renewed impetus for apprenticeships and additional measures supporting youth employment. In the Council Recommendation of 30 October 2020 on A Bridge to Jobs, all EU countries committed to the implementation of the reinforced Youth Guarantee, which steps up the comprehensive job support available to young people across the EU, now reaching out to a broader target group of 15 to 29 year-olds with a more targeted approach towards vulnerable NEETs.

In October 2020, the European Commission published its proposal for a Directive on adequate minimum wages in the European Union. The proposal seeks to ensure that minimum wages are set at an adequate level and every worker can earn a decent living in the European Union.

In March 2021, the Commission adopted a proposal for a Council recommendation on establishing a European Child Guarantee. The objective of this initiative is to foster equal opportunities for children and combat child poverty by guaranteeing the access of children in need to a set of key services. In the same month, the Commission also adopted the Strategy for the rights of persons with disabilities 2021-2030. The strategy aims to protect persons with disabilities from any form of discrimination and to ensure equal opportunities in and access to justice, education, culture, sport and tourism, as well as to all health services and employment.

In March 2021, the Commission presented a Recommendation on effective active support to Employment following the COVID-19 crisis (EASE). It outlines a strategic approach to promote 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 three policy recommendations of the EASE strategy consist of hiring incentives and entrepreneurial support, up- and reskilling opportunities and enhanced support by employment services.

F. Supporting EU funding instruments

A number of EU funding programmes support programme development, measures and capacity building in the Member States:

  • The European Social Fund (ESF) supports a broad range of initiatives in the Member States. In addition, the European Council agreed in February 2013 to create a Youth Employment Initiative (YEI) to target young people aged 15-24 who are neither in employment nor in education or training (NEETs) in regions particularly affected by unemployment (2.3.2 European Social Fund);
  • The EU programme for employment and social innovation (EaSI), adopted by Parliament and the Council, brings together three programmes (PROGRESS - Programme for Employment and Social Solidarity; EURES - European Employment Services; and Microfinance and Social Entrepreneurship);
  • The European Globalisation Adjustment Fund (EGF) supports people who have lost their jobs due to structural changes in world trade patterns.

In May 2018, the Commission adopted a proposal regulating support for the European Social Fund Plus (ESF+) for the period 2021-2027. The ESF+ merges a number of funds and programmes, notably the ESF, the YEI and the EaSI programme. The ESF+ and EGF will complement each other, as the ESF+ supports preventive and anticipatory measures, while the EGF remains a reactive emergency fund, outside the multiannual financial framework.

In May 2020, the Commission proposed a major recovery plan for Europe, amending the original ESF+ proposal. The new plan aims to repair the economic and social damage caused by the COVID-19 pandemic, in particular by protecting and creating jobs (2.3.2 European Social Fund).

To help Member States fund their COVID-19 crisis response, the Commission has also set up the Coronavirus Response Investment Initiative (CRII). The funds will 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) is a new instrument with an overall budget of EUR 17.5 billion that 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 (JTM), 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 the employment guidelines before they are adopted by the Council. In addition, the open method of coordination has enhanced the role of parliaments - not only that of the European Parliament, but also that of the national parliaments, which should be involved in the setting and achievement of national targets.

Parliament has given 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, it called for an EU legal framework introducing minimum standards for the implementation of the youth guarantee - including the quality of apprenticeships - which covers young people aged 25-30. In a resolution on the EU’s next long-term budget adopted in 2018, Parliament called for a significant increase in funding for the implementation of the Youth Employment Initiative. 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 New Skills Agenda for Europe issued by the Commission in June 2016.

Parliament’s resolution of 13 March 2019 on the European Semester stresses 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 on the labour market. In a resolution on EU Employment Guidelines adopted on 10 July 2020, 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 the need to tackle youth unemployment through an improved Youth Guarantee.

On 8 October 2020, the European Parliament adopted a resolution that welcomed the Commission proposal on a reinforced Youth Guarantee. Nonetheless, MEPs were concerned about the voluntary nature of the Youth Guarantee (currently a Council recommendation) and called on the Commission to propose a binding instrument for all Member States to ensure that no one is left behind. 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 insists that quality criteria be included in 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.

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

 

Regina Konle-Seidl / Francesca Picarella