Employers: EU’s social pillar threatens the Nordic model

The fact that 20 policies and guidelines in the EU’s new social pillar are not to be legally binding for member states is seen as an important victory for Nordic employers’ organisations. It means Nordic countries can continue following the Nordic model, where many solutions are being found through talks between employer’ and employee’s organisations rather than being imposed via legislation.

Yet it is a temporary victory. In the longer term, the social pillar could lead to the erosion of the foundations on which the model is built, according to Christiane Mißlbeck-Winberg, Director of European and International Affairs at the Confederation of Danish Employers, DA:

“In the political preamble to the agreement on the social pillar it says that is does not touch the Danish model, but in reality the EU Commission has already introduced several concrete proposals for areas which are 100 percent within national jurisdiction. That worries us a lot,” she says.    

Among the issues that cause concern among employers is the EU Commission’s desire to legislate for paternal leave, and a directive on employment contracts that will prescribe minimum terms in areas which until now have been built on agreements between the social partners. 

A Nordic alliance

Mißlbeck-Winberg says preventing this development will be one of DA’s main tasks going forward. DA has already joined with Nordic sister organisations in this fight.   

DA has penned a joint reaction to the social pillar together with the Confederation of Swedish Enterprise, the Confederation of Finnish Industries and the Confederation of Norwegian Enterprise, NHO. The four organisations say they believe the EU Commission is pursuing the social agenda from a completely wrong starting point.

“As employers we completely agree there is a need for social responsibility in times of high European unemployment, especially among young people. But we worry and do not understand why the Commission believes this can be solved by establishing rights. This is false security, because rights do not create jobs for the young unemployed in for instance southern Europe. This can only be solved through major structural reforms which secure growth and create jobs, and this is not part of the social pillar,” says Christiane Mißlbeck-Winberg.

Instead she recommends focusing on the element of the Danish model known as flexicurity:

“Flexicurity is not based on the principle that employees have a right never to be dismissed. Instead it secures proper conditions if this does happen, and the employee will be well prepared for finding new work because the labour market is dynamic and open. This is something we are far more positive to.

The EU Commission has previously been an ally for the Nordic countries when it comes to expanding the flexicurity model to the rest of Europe. There is now renewed interest in this, believes Christiane Mißlbeck-Winberg, and this is an opportunity which should be seized.

EU rules through the back door

Mikkel Mailand is an associate professor at the Employment Relations Research Centre (FAOS) at the University of Copenhagen. He agrees with DA’s Director of European and International Affairs that the EU Commission used to be a proponent of the flexicurity concept. But as the economic crisis set in, backing for member states disappeared, he says, and he believes the EU’s social pillar can help move things in a new direction.

“The social pillar will probably not bring enormous change in itself, but it could help changes happen though the back door. The pillar is so comprehensive and broadly formulated that it can act as a resource for those who want a stronger social dimension in the EU, and to push politicians towards supporting European legislation and other regulations on social issues,” he says.

However, he does not see any immediate sign in the pillar that indicate the EU wants to change a central issue in the Danish and Nordic model: that wage formation happens though an agreement between the social partners.

Nordic employers are mobilising and getting together to defend the model. But they cannot expect joint backing for their drive from Nordic Governments, for instance when it comes to the pillar’s content, believes Mikkel Mailand.

“The Nordic countries have different views of the EU social pillar. The Swedish and Danish governments agree the proximity principle should be respected, while the Swedish government is more positive to the pillar’s content than the Danish government,” he says.

A key issue for Denmark

During negotiations about the pillar, the Danish government has been among the keenest proponents of keeping the social pillar limited to political principles, and not giving the EU the right to overrule agreements reached by the social partners. The Danish Minister for Employment Troels Lund Poulsen (the Liberal Party), sees it as a victory for Denmark that this was included in the agreement text on the social pillar which the EU Council of Ministers ended up adopting.

“Denmark is not one of the countries that has been asking for the European pillar of social rights. So it has been crucial for the Danish government to make sure the introduction to the pillar makes it clear that this is about political principles, and that the pillar does not grant any further competences to the EU. 

“It has also been a priority for Denmark that the social partners’ autonomy be respected. From a Danish point of view we are happy that this has been made completely clear. We presented a declaration that contained these priorities, and got backing from Poland and Hungary,” Troels Lund Poulsen said after the social pillar was adopted.