Complicating matters in some countries, according to Matthew
Taylor, is a “fuzzy boundary between work, self-employment, and
casualisation”. High-profile lawsuits in the US and Europe related
to the employment status of those platform workers remind us
that the search for labour flexibility can be a contested process,
where both sides claim the support of the law.
Taylor’s recent UK government review of working practices
in the modern economy recommended legal changes around
employment status so that workers and companies have a clearer
set of rules and mutual expectations. But he also believes that
applying current law could go a long way towards preventing
misclassification: “Even when recognising the boundary can
be blurred, for most people you can distinguish between
employment categories.”
Social protection is an essential partner to flexibility. The same
market volatility that makes labour flexibility essential for
companies also makes social protection essential for workers.
“You can’t ask people to take risks if all the risks fall on their
shoulders” without compensating benefits, says Philip Jennings.
He therefore expects “a rebirth of the idea of a universal social
protection net and a reconsideration of what it looks like. It won’t
just be about keeping poverty away, but also about how we can
accompany people through the dislocations to come.”
This will not only be important for individuals. Companies will
soon be facing smaller, ageing workforces in European and Asian
countries. What they offer potential talent, including around
social protection, will have to be sufficiently attractive to a
wider age range. Social cohesion will also demand answers to
social protection challenges. If a larger number of millennials,
for example, compared with other generations, are interested in
diverse forms of work, says Rebekah Smith,“ We have to ensure
that there is intergenerational solidarity – that the generations just
coming into the labour market have adequate access to social
protection but in an economically sustainable way.”
A New Social Contract: Who Pays?
One of the strengths of direct, open-ended, full-time employment
contracts is their legal clarity about who shoulders the various
risks that social protections are designed to address. This sort of
clarity is often lacking for other forms of work. With their share in
the marketplace increasing, it’s crucial to decide how to strike that
social bargain.
The demands of flexibility and social protection are currently
discussed as if they were in opposition. “The big question that
comes out of this is who bears responsibility for offering certain
types of flexibility and for certain types of social protection?” says
Professor Mark Stuart. “Who’s going to cover the costs?” Bettina
Schaller adds that any potential solution to these questions faces
two further challenges: “Is the funding sustainable in a broader
societal discussion, and is it going to actually stand the test of
time?”
Without a solution, those not covered by social protection may
have to fall back on the last resort of the state. Stijn Broecke
points out that this will be funded by general taxation, so firms
that use diverse forms of working arrangements to avoid providing
social protection could end up paying for it anyway through higher
taxation.