As the number of persons infected with COVID-19 continues to rise and death tolls increase across Europe, the impact of restrictions imposed by public authorities to try to halt the virus are deeply impacting both societal life as well as the labour markets and employment.
Social distancing, travel bans and the closure of non-essential businesses and shops have been necessary to try to contain the virus as far as possible and prevent even further health risks and damages. The impacts this has had on the economy – and hence workers – have already been tremendous.
Numerous SMEs, self-employed persons and even larger companies are experiencing severe demand and supply shocks, financial losses and liquidity problems, which acutely threaten their economic survival and have already led to dismissals of workers and employees. At this stage the macroeconomic impact that the Corona virus will lead to can only be guessed. But it is beyond doubt that it will lead to countless insolvencies and bankruptcies which may lead to a serious global economic recession, including mass unemployment.
In fact, there are reasons to believe that it will be workers in precarious employment relationships that will be particularly affected by the consequences of the spread COVID-19. As an ILO from March 18 on ‘COVID-19 and the world of work: Impact and policy responses’[1] finds, “the [novel Corona] virus and the subsequent economic shocks will [have] effects on specific groups who are more vulnerable to adverse labour market outcomes.”
The ILO report goes on to make a rather explicit link to consequences of the virus to those workers that are commonly considered as being in precarious employment: “Unprotected workers, and also the self-employed, casual and gig workers, are likely to be disproportionately hit by the virus as they do not have access to paid or sick leave mechanisms, and are less protected by conventional social protection mechanisms and other forms of income smoothing.”
Across the EU and its Member States, a significant portion of the service-providing workforce is employed outside the ‘traditional’ work contracts of indefinite duration that usually contain strong social safeguard clauses, often also negotiated by trade unions as social partners with their employer counterparts. Work contracts that are not of indefinite duration can be described as atypical, and many atypical jobs remain unregulated, with workers not having adequate social safeguards in economically troubling times. In these cases, atypical work becomes precarious. Such precarious work can arise from employment regimes such as zero-hour employment, fixed-term and temporary work, or bogus self-employment and (dependent) solo elf-employment. As sketched out by recent overview report of the EU’s agency for the improvement of living and working conditions, Eurofound, on new forms of employment, the diversity of further new forms of employment has become substantial, with some of them leading to precarious work.
These workers are particularly at risk in the current COVID-19 crisis, for their precarious employment relationship: the absence of contractual social safeguards against, for instance, unjustified dismissal and adequate social plans and social protection which they often face makes them particularly vulnerable to economic crisis that lead to severe labour markets disruptions with dismissals and reductions of work and pay at large scales. These unprotected workers are the first to be hit, they are the first to be laid-off or dismissed. They will be the first to face poverty and financial difficulties, leading many of them to (the brink of) personal insolvencies.
The EU and the Member States have not been inactive in the management of the crisis. The European Commission’s Corona Response Investment Initiative and its proposal for a new 100bn euro heavy European instrument for temporary Support to mitigate Unemployment Risks in an Emergency (SURE) to grant swift support to the healthcare sector, to the labour market and to SMEs from all affected sectors were necessary measures. Also the announced additional flexibility on state aid rules and (overdue) flexibility in the Stability and Growth Pact (SGP) will allow Member State governments to more or less freely run into debt themselves and to subsidise companies and sectors in trouble without running into problems as regards the EU’s deficit criteria for national budgets and the internal market’s competition and non-discrimination rules.
The European Central Bank’s bank commitment to do “whatever it takes” to protect the euro (and company liquidity!) has also been an important measure to reassure the financial markets as well. Many states subsequently quickly adopted massive economic stabilisation packages and financially protect and ensure monetary liquidity for all affected companies, businesses, employees and citizens, in an attempt to prevent or at least mitigate larger-scale economic downturn, rising unemployment and financial problems of households and families.
However, these hasty – and costly! – measures have only been about fixing problems that could have prevented prior by more anticipatory and preventative economic, employment and social policies. Moreover, it is questionable whether these measures will especially come to the aid of those at the lowest end of the labour market – those in precarious work and ‘outside the system’ in the grey zones of the labour markets – or rather first protect the jobs of those that are already in standard employment and relatively well protected and ‘inside the system’. Those in precarious work that are now running into difficulties and are now paying the price for lacking smart preventative policies by the EU – and, of course, the Member States.
In this sense, CESI has for long called for binding EU framework directives on decent work and on social protection for all, in order to coerce Member States to finally establish a labour market that brings predictable employment and social protection for all those in de-facto dependent work relationships.[2]
Such frameworks would ensure (1) the right to and the possibility of interest representation by trade unions for all, including the (bogus) solo-self-employed, (2) effective, affordable and swift and uncomplicated access to adequate social protection and healthcare for all, and (3) basic labour rights for all, including on working time predictability, hourly wages, and training. Importantly, it would make clear that, in principle, all atypical work relationships which currently give rise to precarious work or bogus solo-self-employment must entail the same entitlements and benefits as comparable permanent contracts, the only exception being their temporary duration or restricted time of applicability.
What to do now? It is essential to raise awareness among trade unions, social partners and governments about the particular problems that people in precarious work are currently facing in the COVID-19 crisis and make sure they are not forgotten. And when the acute crisis is over, hopefully soon, finally establish effective and functioning policy frameworks at the EU and national levels to ensure that precarious work will no longer persist.
Because all workers count!
The particular situation of migrants (undocumented workers)
A contribution by Michele LeVoy, Director of PICUM, the Platform for International Cooperation of Undocumented Migrants: ‘While workers and families of all nationalities and across sectors are being affected, migrant workers are facing particular challenges. Many are excluded from social protection systems, and risk losing their permits, as well as their only source of income due to measures to stem the pandemic. Self-isolation is a luxury they simply cannot afford, even if going to work will risk their health. People who are already struggling to survive will be plunged into extreme poverty and homelessness. A series of measures can and must be taken to ensure that undocumented migrants are also protected against the health, economic and administrative consequences of this unprecedented health crisis. The battle against this virus will only be won once the situation of marginalised communities is also addressed.’
[1] https://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/documents/briefingnote/wcms_738753.pdf
[2] https://www.cesi.org/wp-content/uploads/2014/02/CESI-Presidium-Future-of-work-position-paper-20191211_adopted.pdf
