“More than 61 million jobs have been lost since the start of the global crisis in 2008 and our projections show that unemployment will continue to rise until the end of the decade. This means the jobs crisis is far from over so there is no place for complacency.”

(ILO Director-General Guy Ryder, 20 January 2015)

Introduction

In the era of economic crisis, the dramatic increase of unemployment and poverty levels have alarmed the international community to take drastic measures and improve the protection of labour and welfare rights. The International Labour Organization (ILO) is a specialised agency of the United Nations, which aims among others to promote labour rights and enhance social protection.  Employment security is a fundamental form of security, which plays a key role in addressing economic challenges. Here, I attempt to give a brief introduction to the concept of employment security and examine to what extent employment security has been integrated in the ILO instruments.

Defining Employment Security

Employment security is defined as “the protection against loss of income-earning work” (ILO Socio-economic programme, 2004). It is noteworthy that “employment security” is defined differently between self-employed and wage/salary workers.  Particularly, the definition of “employment security” for salary/wage workers refers to “the strong protection against unfair or arbitrary dismissal”.  Whereas, for self-employed workers, it refers to “the protection against sudden loss of independent work, and/or business failure”.

The Report titled as “Economic insecurity is a global crisis”, based on the ILO’s Socio-Economic Security Programme (SES), has prescribed that economic security is an umbrella term that constitutes two major divisions: basic social security and work-related security.   Employment security differs from job security but both are two core components of the work-related branch of economic security.  Employment security refers to the opportunity of a worker to retain his employment, whereas job security refers to the ability of a worker to retain his job which is very suitable to him (i.e. a job position which is in conjunction with his interests, abilities, training and skills).

ILO Instruments on Employment Security

In 1944, the ILO has firstly introduced the concept of employment security through the adoption of the Declaration of Philadelphia. The Declaration of Philadelphia, which is binding upon all ILO member States, has embedded employment security under the umbrella of economic security (Part II(a) of the Declaration of Philadelphia).  Few decades later, the ILO has adopted Convention on the Termination of Employment (No.158) and its corresponding Recommendation (No.166)Recommendation (N.166).  Convention No.158 sets out the core principles for the protection of workers against unfair dismissals.  It stipulates that a dismissal can be justified only for reasons related to “capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service” (article 4 of Convention No.158).  Furthermore, it prescribes that particular reasons, such as race and marital status shall not constitute valid reasons for termination of employment (article 5 of Convention No.158).  After Slovakia has ratified Convention No.158 in 2010, the total number of ratifications to Convention No.158 has increased to 36.  The limited number of ratifications shows that Convention No.158 has not been warmly embraced by the ILO Members.  This should create concerns regarding the reasons lying behind the reluctance of the ILO member States to implement international labour standards on employment security.

Just before the outbreak of economic crisis, the ILO has managed to set employment security at the centre of effective labour protection by adopting the Declaration on Social Justice for a Fair Globalization (2008).  The Declaration 2008 has prompted all ILO member States to adopt the ILO Instruments on Employment Security.  Particularly, it has urged ILO member States to implement Convention No.158 and Recommendation R.166 (as legal framework) in order to examine to what extent Decent Work Agenda has been implemented at the national level (ILO, “Manual on Concepts and Definitions of Decent Work Indicators”, 2012).

Conclusion

The ILO has taken an important step by adopting the Declaration on Social Justice for a Fair Globalization (2008), which is binding upon all ILO member States.  However, this step should have been taken well-before the outbreak of economic crisis. This would have been given time for preparation to both, the ILO member States and the ILO, to adopt the appropriate legal framework in order to enhance employment security and increase resilience to future economic shocks.  As Ashleigh Brilliant stated “Nothing we can do can change the past, but everything we do changes the future.”  Hence, even if the ILO has not placed employment security at the heart of effective labour protection before the outbreak of economic crisis, it should continue and intensify its efforts to promote employment security.  According to the “Report of the Committee on Employment and Social Policy: 12th Item on the Agenda” (306th Session, November 2009), this goal should only be achieved by creating employment opportunities, enhancing workers’ skills, abilities, job experience and by integrating them into labour market.

Useful Material

1. ILO official website (about the ILO)
2. Employment protection legislation database – EPLex  (this database gives useful information on the legislation on termination of employment for each country)

Post by: Christiana Antonoudiou, PhD Candidate in Labour Law and Human Rights at University of Bristol Law School

Introduction

My research interests concern the roles of the numerous stakeholders in occupational pensions, including scheme members, employers, governments and the European Union. The OECD produces an international comparative review of pension systems across OECD countries, the latest version of this report was published on 1 December 2015. The following comment briefly considers some of the recent reforms to the UK pensions system and highlights the need to maintain a focus upon the social importance of occupational pensions, particularly in light of their increasing role in the UK in providing for people in old age through initiatives such as automatic enrolment.

The UK position

The OECD Pensions at a Glance report provides a global perspective of pension systems in OECD countries over the two year period between September 2013 and September 2015 (the “OECD report”). It was observed that there has been a period of “intense reform activity” over the past ten years.  The UK is amongst the many countries that have taken action to address the pressing social and economic issues involved with pension provision.

Since the introduction of the state pension in 1908, the UK has typically provided a low level of state pension which has encouraged individual citizens to save for themselves through private arrangements or through being members of occupational pension schemes provided by their employers.  According to the OECD report, the UK state pension will provide 22% replacement of average earnings following the reforms to the state pension system to be introduced in April 2016. This will improve the rate of the state pension in the UK,  but the level will still be below that in many other countries. The UK system is contribution based, being dependent upon National Insurance Contributions whereas other systems such as in New Zealand are residence based and provide 40% replacement of earnings. The total public spending on pensions according to the OECD report is 5.6% of GDP whereas the average is 7.9%.  It must be remembered that any consideration of state pension provision must be seen in the context of the welfare system, tax rules and occupational pension provision specific to that country.

The political philosophy of encouraging citizens to provide for themselves is routed in liberal, individualistic traditions and is evident from the original welfare system reforms that followed the Beveridge Report of 1942. The early reforms saw the introduction of a contributory state pension provided to everyone at a flat rate for the rest of their lives. However, the low level of the state pension created an opening for more employers to provide occupational pensions. In the current environment, an uncertain economic situation and longer life expectancy has meant that state systems are under considerable strain and the role of the employer in providing for employees in their old age is of ever increasing importance.

Current pensions policy in the UK has seen a continued increase to the role for the employer, with the introduction of automatic enrolment being phased in between October 2012 and February 2018.  Following initial legislation in the Pensions Act 2008, employers are now compelled to enrol their employees into a pension scheme and to make contributions to that scheme.

The current government has also enacted legislation to permit members of defined contribution schemes (also known as money purchase schemes), to access their pension on retirement as cash instead of being obliged to purchase an annuity, increasing the individual’s control over their retirement finances.

Looking to the future, the Summer Budget statement in July 2015 announced the launch of the consultation into whether tax relief for pension contributions should continue in its existing form. The consultation ran from 8 July 2015 to 30 September 2015 and the responses are being considered, according to the Chancellor’s Autumn Statement and Spending Review (issued on 25 November 2015) an announcement will be made in the 2016 Budget.

A global outlook

The OECD report observed that about half of OECD countries have enacted pension reforms such as reducing indexation (increases to make allowance for inflation), amendments to pension tax relief, increasing contribution rates and increasing retirement ages. Such reforms seek to reduce the negative effects of an aging population, the slow recovery after the global economic crisis, low returns on investments and low interest rates.

The OECD report observes that recent pension reform to pay-as-you-go systems have had an impact but sees the next major issue for pensions as being one of “social sustainability” and whether pensions will be adequate to support people in their increasing old age.

Conclusions

There are numerous actors within the occupational pensions system, each with financially motivated agendas which often come into conflict. For example, an employer providing a funded defined benefit scheme in the UK will often be faced with difficulty funding a scheme with a significant deficit and seek to save costs; the government must balance the complex issues of state pension spending and incentivising occupational and private pension savings through tax reliefs; and a scheme member is primarily concerned with ensuring that they receive the benefits that they expected to receive in order to provide for them in their retirement.

With the increasing role of occupational pensions in providing for employees in their retirement, the social function of occupational pensions must be kept at the forefront of any policy initiatives. The EU as a stakeholder in pensions has emphasised the need for adequate, safe and sustainable pensions following its 2012 White Paper and has provided useful resources for considering pension provision thorough initiatives such as the EU Ageing Working Group and the OECD report which is part funded by the European Commission. The perspectives gained from working with other countries to develop and share information on addressing concerns about aging, sustainability and adequacy of pensions from a social, member focused perspective, provides an example of a positive benefit from EU involvement in pensions.

James Kolaczkowski

PhD Candidate
University of Bristol Law School

The University of Bristol Law School hosted a one–day conference on legal research methods and methodologies on 16 September 2014. The conference was organised by a committee of postgraduate researchers with the intention of showcasing a diverse range of methods and methodologies across doctrinal, conceptual, comparative, international, socio-legal and empirical research.

The organisers are very grateful to all the participants and to the university for the opportunity to successfully host this conference which gave postgraduate researchers and more experienced academics the opportunity to present about their research and share experiences of using various methods and methodologies.

Details of the conference and materials can be found at the conference website by following this link here.