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Labour Market Regulations and Diverse Forms of Work

Labour market regulation is key to ensure rights and certainty for workers and employers in their employment relationships. Labour law and employment protection legislation provide a framework for the functioning, flexibility and quality of the labour market.

The implementation of labour law needs to reflect the labour market needs and dynamics. If it is too flexible or too strict, this can impact employment and productivity.  Moreover, it also impacts informality rates as labour regulation defines the ease with which a formal and legal job can be found. Many countries have allowed and regulated various forms of work such as fixed-term, open-ended, part-time, casual and agency work employment contracts as well as self-employment.

These diverse forms of work have grown in recent decades as a response to changing work preferences and labour market needs. As these trends are expected to increase, policy-makers and social partners are increasingly focused on securing rights and benefits that are appropriately balanced across them.

Diverse forms of work such as fixed-term, open-ended, part-time, agency-work and self-employment are often regulated at national level. This regulation is important to ensure rights, certainties and benefits for both workers and employers. Still, the differences in protections and rights provided can vary greatly across different forms of work and countries.

In the past, policymakers spoke of ‘standard’ workers as opposed to ‘non-standard’ workers, somehow framing work as a static, standardised and repetitive activity. This is reflected in the way that different employment contracts are regulated. Often the differences between open-ended and other type of contract create labour market dualism and rigidity. Luckily, more and more national and international policymakers recognise that there is no  ‘standard’ work  and that labour markets need different forms of work for decent work and economic growth.

In making the transition from standard to diverse forms of work, policy-makers need to ensure that all forms of work have effective access to appropriate rights and protections. This goal is high on the agenda of national and international policy-makers as reflected in key international labour policy documents such as the ILO Future of Work Declaration, the OECD 2018 Jobs Strategy and the World Bank’s ‘Changing Nature of Work’ report.

Diverse forms of work are crucial to labour markets. They allow both businesses and workers to accommodate their labour market needs and preferences. Moreover, they define the ease of accessing the (formal) labour market. The World Employment Confederation has developed the Smart Regulatory Index. This Indicator showcases the ease of contracting an employment agency in a country and the way rights and social protections are provided through agency work.

For their optimal functioning an appropriate regulatory framework is needed in order to secure work quality, prevent abuse and allow for proper classification and enforcement. Such a framework exists for agency work, the specific triangular form of employment, which clearly identifies the rights and obligations of the three parties in the relationship.

An important element in the regulation of diverse forms of work is the portability of rights across different forms of work, jobs and sectors. Where rights, benefits and social protections are created, it is important that they are implemented in an appropriate and contract-neutral way. This ensures that people are free to change jobs without fear of losing the rights and/or benefits that they might have built up.

 

Source: WEC – Smart Regulatory Index (2018)

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