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Peer Review on ‘The rise of precarious work (including bogus self-employment) – causes, challenges and policy options’, The Hague, The Netherlands, 19-20 April 2018

19/04/2018

This Peer Review explored the different possible causes of the rise of precarious work (with a focus on workers on flexible contracts against their preference and bogus self-employment), as well as the different forms in which precarious work manifests itself in European countries and the societal and political debates that it creates.

According to the ILO definition, precarious work is “usually defined by uncertainty as to the duration of employment, multiple possible employers or a disguised or ambiguous employment relationship, a lack of access to social protection and benefits usually associated with employment, low pay, and substantial legal and practical obstacles to joining a trade union and bargaining collectively”.

The Netherlands, in particular, has seen a rapid growth in the proportion of the labour force in precarious work. This includes:

  • self-employed without employees (not all of whom are precarious, but some are); and
  • flexible employment (with the largest rise in on-call work (oproep/ invalwerk) which also has the weakest employment and social protection).

There are a number of incentives to promote self-employment, including favourable tax treatment and lower social and non-tax contributions. Such incentives risk distorting the labour market by fostering bogus self-employment. For example, the exemption from social contributions for employers makes this group an attractive alternative to traditional employees. As such, there is a need to reduce institutionally driven self-employment, whilst still promoting entrepreneurship and innovation.

The objective of the Peer Review was not to compare the institutional set-ups (and the specific policies that depend greatly on the understanding of specific institutional set-ups). The different institutional situations regarding self-employment and flexible work are too divergent among European countries to make a meaningful comparison of the entire institutional set-up possible.

Rather, the focus of the Peer Review was to discuss the experiences of other European countries with precarious work in order to understand what is happening with the rise of flexible contracts, bogus self-employment and other non-standard forms of work. Many European countries seem to struggle with the rise of precarious work and bogus self-employment.

The Peer Review was hosted by the Dutch Ministry of Social Affairs and Employment and attended by government representatives and independent expert from nine other European countries, as well as representatives from Eurofound and the European Commission.