Social dialogue can be an essential component in delivering well-functioning labour markets and can be a significant benefit to the employment and recruitment industry. Effective social dialogue achieves a correct balance between flexibility and security and while it is probably most developed in Europe, it is beginning to gather support in Latin American markets and beyond. The Ciett board will be travelling to Brazil in March and will meet with local and regional union leaders during their visit to foster debate and share experiences. We are convinced that a strong social dialogue can bring significant benefit to all players within the labour market. An openness to explore collective labour agreements and find consensus solutions to the organisation of labour within companies and organisations ensures that labour markets are fit for the 21^st century. It delivers more inclusive labour markets that keep workers in the system and in employment rather than forcing them out of the system where they have none of the social protections afforded to declared workers.

But what exactly is social dialogue? Essentially it describes a situation where the social partners – employers and worker representatives (and sometimes governments in a tripartite framework) engage in a constructive and ongoing dialogue and negotiation over labour laws and regulations. In these markets, private employment services and labour laws are strongly influenced by negotiation between the social partners and they are able to establish rules through collective bargaining.  As employment and recruitment agencies are recognised as the employer they, rather than the user companies, are the ones to enter into dialogue with the trade unions to discuss working conditions of agency workers.

In the Ciett report ‘Adapting to Change’ carried out with the Boston Consulting Group, three distinct types of social dialogue-based systems are identified:

• The Western European System – as illustrated by markets such as Austria, Germany, the Netherlands and Switzerland – where there is a moderate level of legislation with varying balances of flexibility and security. These labour markets are organised and regulated by collective agreements between social partners and enjoy a significant degree of agency work penetration;
• The Nordics – Denmark, Finland, Norway, Sweden – where the unique Nordic social and economic model allows social partners to define the level of regulation needed;
• Parts of Latin America and Asia where the economy is generally liberal but a high value is placed on security and social acceptance which has an impact on labour markets and labour organisation.

While the three systems differ in the way that they operate, the commitment to flexibility and finding solutions that work for everyone is common throughout. The research finds that labour market efficiency – and thus, global competitiveness is consistently higher in these social dialogue based models compared with legislator-driven models as there is a greater capability for social partners to define appropriate levels of regulation and fewer barriers to entry for private employment services. It is also interesting to note that markets operating under the social dialogue-based model typically have lower levels of unemployment among youth and disadvantaged groups as well as lower levels of undeclared work.

In addition to the social dialogue models at a national level, there has been a strong track record at EU level. Eurociett, which represents the employment and recruitment industry in Europe has worked alongside European trade union UNI-Europa, for a number of years to increase knowledge and understanding of the sector and the contribution it can make. Eurociett and UNI-Europa have undertaken studies and research projects together exploring topics such as the transition from agency work into longer lasting employment, and the training available to agency workers. As a result the two organisations have made a number of joint declarations including one on training in 2009 and one to EU policy makers in 2012 on maximising the role of temporary agency work in facilitating labour market transitions.

Research due to be published in March 2015, seeks to compare agency work with other forms of work such as fixed-term contracts, self-employment, seasonal work, and open-ended contracts. Indications to date suggest that agency work compares extremely well in terms of job satisfaction and career progression and that it suits both workers and employers.

Modern labour markets need flexibility and agility if they are to function well and social dialogue can be a constructive way of delivering this while also meeting the needs and expectations of both employers and workers.

About Denis Pennel

Managing Director of Ciett and Eurociett, Denis Pennel is a labour market expert with deep knowledge and years of experience relating to employment at global and EU levels. He recently published “Travailler pour soi”, a book about the new realities of work.

Follow Denis on Twitter @PennelDenis

About Ciett, www.ciett.org

As the International Confederation of Private Employment Services, Ciett is the authoritative voice representing the interests of agency work businesses. Founded in 1967, Ciett consists of 51 national federations of private employment agencies and eight of the largest staffing companies worldwide. Its main objectives are twofold: to help its members conduct their businesses in a legal and regulatory environment that is positive and supportive; to gain recognition for the positive contribution the industry brings to better functioning labour markets.

Follow Ciett on Twitter @ciett_waytowork