Tag Archives: labour market

Studying Finnish labour law: reflections from a research visit to Leeds

by Liisa Lähteenmäki, Postdoctoral Research Fellow (University of Turku)

Liisa Lahteenmaki presenting at CERIC Seminar

Liisa Lahteenmaki talks about labour law and political discourses in Finland.

I had great pleasure to be a visiting researcher at the Centre for Employment Relations Innovation and Change (CERIC) in September-October 2018. I found CERIC to be an inspiring, multi-disciplinary research environment hosting a wide array of projects dealing with contemporary key employment issues, such as platform employment, employees’ health and welfare, and regulation of transnational labour markets. I also had the opportunity to give a CERIC research seminar about my current research project, which examines the changes made to the Finnish labour and employment legislation during the last 20 years.

Since 2003, Finland has witnessed a period of conservative or right-wing governments, the country being led by either the Centre party or the National Coalition. Historically, protective and empowering labour and employment legislation was forged by social democratic governments, and the period from the 1970s throughout the 1980s is carved into the collective memory of the nation as the years of stable progress in employment rights, labour protections and social welfare. This development was abruptly broken by the 1990s recession as the repercussions mainly meant degradation of welfare, wages, education, health services and stable employment.

Since the 1990s, neoliberal policies and market enhancing ideologies have swept Finland similarly to any other country, rendering the currency and ideals of labour protection and social welfare under attack. The triumphs of the welfare state were suddenly conceptualized as problems, even obstacles to economic growth. These turns have inevitably had effects on law-making.

Besides being interested in the trends and changes in labour and employment legislation per se, my research discusses the interplay between legislation, the reality of the labour markets, and other employment relevant phenomena in the Finnish society. I am particularly interested in the practice of law-making bases on the ideals of unbiased information and broad participation while the outcome, the actual law, is seen as a result of disinterested and rational decision making. Furthermore, I am interested in examining the interplay of legislation imposed and passed in ‘separate’ fields of society that are nevertheless always unavoidably interconnected: Legislation regulating migration, economy or human rights have percussions in the labour markets and vice versa, and this tends to be  ignored in discussions about changing employment and welfare.

Law itself upholds practices of sectoral decision making by, for example, restricting assessments of influence to sometimes generic issues (e.g. influences on the economy and administrative burdens), and by repeating the idea of law as an endogenous system, with its own internal rules and discourses. Laws regulating employment nevertheless always influence a multitude of other domains in everyday life: family and habitation, migration, and education, just to mention a few. Also, events taking place in ‘real life’ – that is, migration, families and lifestyle choices people make – do affect labour market outcomes. In this vein, my research examines what the possible repercussions of labour legislation are beyond the obvious, and how this ‘two-way traffic’ should be better taken into account when planning and justifying new labour legislation.

From the starting point of the idea of social protection as a critical concept, I will be evaluating the changes in the Contracts of Employment Act, the Health and Safety at Work Act, and the Unemployment Benefits Act. My research will ask whether we are still following the original paradigm and ideals of labour law (protecting the weaker party of the employment relationship) and Nordic welfare state (equality and leveling down of social and economic differences) when making changes to labour legislation. Borrowing from Lappi-Seppälä (2007) and Pratt (2008), I will use the idea of Scandinavian Exceptionalism in mapping the trends of labour legislation through some of the most critical years in the Finnish economy: From the unparalleled economic depression of the 1990s to the joining to the EU, the miracle of Nokia, the closures of the paper mills, and the rise of the gaming industry (e.g. Supercell and Rovio) in the 2000s. While Lappi-Seppälä and Pratt refer to the penal policies and the low levels of imprisonment in the Nordic countries, I will use the term in reference to the employment policies which have traditionally emphasized both the social democratic model of tripartite negotiations and the recognition of the unions, as well as the idea of social protection over maximum profits and insecure employment.

It truly was encouraging to be part of this community for a while. I would like to express my gratitude especially to CERIC Member Dr. Jo Ingold for taking an active part in organizing my visit. I hope that my visit in CERIC and Leeds University will lead to inspiring cooperation as my aim is to broaden my research to include international comparisons. It would indeed be an honour to work together again with CERIC colleagues.

The growing problem of zero hours contracts in the UK

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Chris Forde
Chris Forde is Professor of Employment Studies at CERIC.

@CERIC_LUBS

In May, Vince Cable announced a review of zero hours contracts, amidst concerns that such contracts may be ‘abusing workers at the margins of the labour market’. Under zero hours contracts, workers agree to be available as and when required, but they have no guaranteed hours or times of work.  In healthcare, hospitality, and education, such ‘on-call’ workers are increasingly commonplace, cleaning hotel rooms, waiting in restaurants, or providing care to people at home. A number of reports have highlighted the precarious nature of many zero hours contracts, characterised by low pay, few employment rights, and little opportunity for progression.

Getting a handle on the numbers engaged in zero hours contracts has proved difficult. A Resolution Foundation report, using Labour Force Survey data, puts the number of workers on zero hours contracts at 200,000, although the authors recognise that this is likely to be an underestimate.  This would certainly seem to be backed up by figures cited last week by Norman Lamb, the Care and Support Minister who stated in Parliament that in social care alone, 300,000 workers – one fifth of the workforce – were employed on zero hours contracts. Why have they have become so commonplace in some sectors, and what are the experiences of those workers at the sharp end of these contracts?

In our recent research at the Centre for Employment Relations Innovation and Change (CERIC) at the University of Leeds, Ioulia Bessa, Sian Moore, Mark Stuart and I have been able to look at the realities of zero hours contracting in the domiciliary care sector. Our study for the Low Pay Commission examined contracts, hours of work and pay for workers who provide care for clients in their own homes. We have looked at pay levels in this sector in a previous blog, but what about the prevalence of zero hours?  One of the most striking findings from our analysis of a national dataset on work and employment in social care was that zero hours contracts have become the norm for domiciliary care workers over the last few years. Between 2009 and 2012, 56% of domiciliary care workers were employed on zero hours contracts. As figure 1 below shows, in the private sector, it is rare to see a care worker on a standard employment contract: in 2012, a staggering 4 in 5 domiciliary care workers was on a zero-hours contract. Our analysis suggests that there were approximately 100,000 domiciliary care workers in total on zero hours contracts in 2012.¹

Figure 1: Proportions of Domiciliary Care Workers on zero-hours contracts, 2009-2012, National Minimum Data Set for Social Care.

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Source: Bessa, Forde, Moore and Stuart (2013) Report for Low Pay Commission

Our case studies showed that it was changes in the commissioning process and well-documented falls in ‘block contracts’ (where providers are given guaranteed numbers of hours of care under local authority contracts) that had driven the rise in zero hours contracting. As a manager from one large national home care provider put it:

‘It would be difficult to not sustain a zero hours contract because  you don’t have any guaranteed or block hour contracts from the local authority, because they’re all commissioned and framework (agreements), there’s no guarantee of business, it’s difficult to guarantee a workforce business or work’ .

Advocates of zero hours contracts point to the flexibility of such arrangements, and the benefits to both employer and worker of adaptable work schedules. To be sure, we found some evidence of workers who valued flexibility over how many hours they worked (in particular those with second jobs, students or those with other commitments). However, the problem is that zero hours contracts remove any element of continuity for workers in the hours they worked from one week to the next. One respondent who had worked as a care worker described how his ‘heart sank every Sunday night’ when he received a work schedule for the coming week from his employer, typically setting out less hours for the worker than they were expecting. Whilst these hours were often topped up by the employer with additional hours during the week, it made planning very difficult. Our case studies also highlighted how working variable hours each week also had implications for the receipt of Statutory Sick Pay, and benefits such as Working Family tax Credits.

Some have called for these contracts to be outlawed, whilst others suggest tighter regulation, and better enforcement of those rights that zero hours contract workers do have. As one commentator has noted, those on zero hour contracts do have a modest advantage over those on casual contracts, in that an employer does have an obligation to provide work to employees on fixed-term contracts over casual workers, if work is available.  The problem is that under zero hours contracts, the risks associated with work not being available are predominantly borne by the worker, .

If we are arguing that commissioning practices in social care are one of the causes of the rise in zero hours in the sector, are there better solutions? Our case studies highlighted how the practice of contracting for hours of care from suppliers (with no specified pay rates or employment conditions that suppliers must adhere to) was a barrier to improving contract arrangements of the care workforce. ‘Fair fee models’, where authorities could give a specified rate for hourly pay and for overheads (with the capacity for increases), or ‘open book’ approaches, where the local authority would pay what a service costs and then allow a certain percentage profit might lead to a reduction in the reliance by employers on zero hours arrangements to maintain margins. However, the dominance of the current commissioning model in social care would seem to suggest that such radical changes are unlikely to happen any time soon.

¹ Our analysis of zero hours in the NMDS-SC dataset in 2012 was primarily concerned with wages and hours worked, and we focused on the 42,908 zero hours contract workers who provided information on their contracted hours and additional hours. We excluded from the analysis of those workers who indicated that their contracted hours were zero, but who provided no information on actual hours worked in a given week. These involved the exclusion of 60% of cases from the dataset. Including these workers in the count of zero hours contracts would give the higher count of 100,000 reported above.