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Heinz Koller, ILO Regional Director For Europe And Central Asia

We Need A New Social Contract

The unprecedented pace and scale of the changes triggered by Covid-19, as well as the technological changes, represent a challenge to the Decent Work Agenda, which is structured around its four interdependent pillars: labour standards, employment, social protection and social dialogue. What is at stake today is not to change the Decent Work Agenda, but to make it work for all workers across the world, regardless of their occupation and status

The latest ILO World Employment and Social Outlook (WESO) Trends 2022 report forecasts that the global recovery of employment in 2022 will be slower than expected, with the workinghour deficit amounting to the equivalent of 52 million full-time jobs, due to crisis-induced labour market disruptions being nearly twice as high as in the previous full-year estimate, which predicted a deficit equivalent to 26 million full-time jobs.

This downgrade of jobs recovery is hardly a surprise, due in particular to new waves of the pandemic and decisions on new shutdowns in several countries during the second half of 2021, says ILO Regional Director for Europe and Central Asia, Heinz Koller. Global unemployment is expected to remain above pre-Covid-19 levels until at least 2023, while the 2022 level is estimated to stand at 207 million, compared to 2019’s 186 million.

From a regional perspective, all countries in Europe and Central Asia have been hit hard, with many countries having faced several rounds of lockdowns. However, our region experienced the smallest loss of hours worked compared to pre-pandemic levels (2.5 per cent), followed by Asia and the Pacific, at 4.6 per cent, emphasises our interlocutor.

“In most countries of the region, the policies implemented succeeded in mitigating employment losses and unemployment hikes through heavy use of employment retention schemes. Nevertheless, close to 2.7 million workers shifted out of employment in the subregion in 2020, 1.1 million of whom became unemployed and another 1.6 million exited the labour force,” says the ILO regional director.

On the demand side, there was a disconnect between high economic growth and employment creation in many countries. Thus, in the recovery phase, labour market (re)activation will be key for the region, through the extending of active labour market programmes to groups marginally attached to the labour market, particularly young people “not in education, employment, or training” (NEET), emphasises Koller. “In that regard, the ILO in Serbia – in partnership with the European Commission – has already played a decisive role in assist ing in the design of the Youth Guarantee Implementation Plan, which is due to be ready by June 2022, as the key measure for the activation and employment of NEETs.”

The Covid-19 pandemic led the ILO to come up with a new statistical approach to measuring working hours. How does the region stand in terms of this measurement?

The ILO has indeed resorted to the measurement of working hours and full-time job equivalents lost due to the various aspects and stages of the Covid-19 pandemic, using its “nowcasting” model. This is a data-driven statistical prediction model that provides a real-time measure of the state of the labour market, drawing on real-time economic and labour market data.

Globally speaking, this measurement method has captured a “great divergence” between richer and poorer economies, which reflects the evolution of the pandemic to a large degree, but also the uneven availability of fiscal stimulus and vaccines. High-income countries have experienced a stronger but still incomplete recovery, with working hours still 3.6 percentage points lower in the third quarter of 2021 than the pre-crisis benchmark, while low- and lower-middle-income economies, which have the lowest vaccination rates combined with limited fiscal stimulus, suffered recovery setbacks.

We need effective social dialogue at all levels, greater international cooperation and international regulations that safeguard the rights and conditions of all workers, regardless of their employment status

From a regional perspective, Europe and Central Asia has been the most successful region in terms of closing the gap on the pre-crisis benchmark of Q4 2019, with a gap of 2.5 per cent, followed by Asia and the Pacific, at 4.6 per cent. The reasons behind such a result for the region are twofold. At the early (pre-vaccination) stages of the pandemic, the countries of this region were among the leaders in launching fiscal stimulus programmes on an unprecedented scale in response to the massive labour market disruptions caused by the pandemic. On the other hand, generous stimulus packages led to concerns about inflationary pressures, while the premature withdrawal of fiscal support could risk exacerbating labour market disruptions or slowing down job recovery.

At the later stage of the pandemic, most countries of the region reached high vaccination coverage, which allowed the progressive lifting of shutdowns and reduced losses of working hours, as measured by the “nowcasting” model.

The region that you cover (Europe and Central Asia) is indeed extremely diverse, with a rapidly shifting geopolitical and economic context. How can current changes impact on the possibilities of fulfilling the Decent Work Agenda?

Although the vast region of Europe and Central Asia is very diverse in terms of its geopolitical and economic context, the major challenge faced by all these countries recently has not been a result of any geopolitical impact, but rather the Covid-19 crisis, the impact of which has been quite severe. The Covid-19 pandemic particularly emphasised the importance of occupational health and safety as an element of the Decent Work Agenda.

The second element of the Decent Work Agenda to come under the spotlight in particular in this region, both during and after the pandemic, has been social protection. The pandemic exposed deep-rooted inequalities and significant gaps in social protection coverage, comprehensiveness and adequacy across all countries of the region.

How should governments respond to these challenges?

The pre-Covid-19 global struggle against the growth of working poverty and inequalities, including in Serbia, has suffered a temporary slowdown due to the global public health crisis. As the crisis persisted, the initial policy response, which aimed to provide emergency assistance, evolved into a more profound paradigm shift of global economic policymaking. The world’s major economies and multilateral institutions reached a consensus around the concept of “building back better”, i.e., rebuilding the economy in ways that address systemic and structural inequalities and other long-term socioeconomic challenges that pre-dated Covid-19, such as climate change.

The key response to these challenges is in coordinated action, whereby the ILO Centenary Declaration for the Future of Work provides a blueprint for a human-centred agenda to overcome the crisis, address existing challenges and lead to a better future. Its successful implementation will rely on four pillars: (a) inclusive economic growth and development; (b) protection of all workers; (c) universal social protection; and (d) social dialogue.

The world of work is undergoing deep transformations, driven by technological advances. What do you recognise as major patterns influencing working norms and changing standards that were set 100 years ago?

The world of work is being placed under tremendous pressure, under the combined effects of globalisation, demographic and environmental changes, and the technological revolution. The Covid crisis has even further exacerbated the pressure on labour markets.

Such transformations certainly offer hope for the advancement of our societies, but also provoke disruptions on the labour market and in the personal lives of millions of workers who fear job losses and dehumanisation within our societies. Major disruptions in the world of work are generating great uncertainty, leading some to question the sustainability of existing social models, as we have seen with the pandemic crisis over the last two years.

The ILO in Serbia, in partnership with the European Commission, played a decisive role in assisting in the design of the Youth Guarantee Implementation Plan, which is a key measure for the activation and employment of young people not currently in employment or education

What has really changed over the last 100 years? Work is getting faster, more mobile and often more precarious. At the same time, we see very high unemployment rates across the world, especially among the youth, but also an increasing number of senior workers, leading to rising poverty and inequalities. We are witnessing rapid transformative changes triggered by digitalisation. In particular, the rise of nonstandard (or new forms of) employment has transformed the classical concepts of workplace and employment relations radically, with the spread of crowd-work and the platform-based economy representing a major change.

These trends also bring a lot of advantages. Remote work, especially telework, has gained popularity over past decades and became a widespread practise during the pandemic. At the same time, such transformations have huge implications for workers and employers. The boundaries of employment contracts and relations have been blurred. From part-time, short-term, self-employed workers, to internet platform work, many are low-paid jobs requiring an intense pace of work, limited flexibility and strong control over workers. Many workers lack the protection of labour and social security laws, including those related to fundamental rights, such as the freedom of association and collective bargaining.

To what extent are automation, digitalisation and AI impacting on the world of work?

As mentioned previously, current changes have a huge transformative impact, as they not only influence the nature of jobs, but may also change the nature of the employment relationship and raise a lot of questions in terms of labour law, fundamental rights at work and human rights.

The pandemic has accelerated these changes and deepened the digital divide which – if unaddressed – could widen the development gap between developed and developing countries in an era of digital work. The crisis has also revealed the extent and potential of supply chain disruptions, which has prompted a lot of firms to automate production in order to hedge against future disruptions.

Unlike some parts of Europe, where there are a lot of experiments with a shorter work week or flexible working hours, people in Serbia work more than the prescribed 40 hours. What developments do you observe across the region in terms of the work-life balance?

The issue of reduced working hours is not new. It was as far back as 1930 that John Maynard Keynes predicted that the generation of his grandchildren would be working three hours a day or a 15-hour workweek. Let’s not forget that ILO Convention No. 1, adopted in 1919, is on working time. Since then, working time reductions have been a trend across the world, albeit with variations among countries.

In a paper issued in 2018, entitled “Working time and the future of work”, the ILO cited evidence showing that reducing full-time working hours, combined with basic guarantees regarding minimum working hours for part-time workers, has many advantages for workers, enterprises and society: fewer occupational safety and health issues and lower costs; more and better jobs; a better work–life balance; and more motivated and productive employees and more sustainable enterprises.

At the same time, we’ve already seen how new models, such as remote and telework, tend to blur the boundaries between work and private life. Remote work has a lot of advantages, including for workers with family responsibility. However, rather than a work-life balance, we seem to see a trend to “work-life blending”. Workers are indeed expected to be available at all times. And yet, being over connected may have detrimental effects, not only on working time and the work-life balance, but also on fair working conditions, fair remuneration, and health and safety at work.

Our region experienced the least losses of hours worked compared to prepandemic levels, due to the policies implemented. They succeeded in mitigating employment losses and unemployment hikes through the heavy use of employment retention schemes

How has teleworking, as well as the specifies of work during the Covid-19 pandemic, influenced social dialogue and the promotion of labour standards around the region?

During the first quarter of 2020, the urgent measures implemented by governments, under “fast-track” laws and the “state of emergency”, were often decided upon without proper consultations – not only with parliaments, but also with social partners. Moreover, as underscored by the trade unions, including the ETUC, certain governments have used the Covid-19 crisis as an alibi to “temporarily” undermine labour rights, including trade union rights like collective bargaining and collective actions, as well as basic human rights. Moreover, Labour Code exemptions have been chosen by some governments, including with regard to the extending of working hours in several economic sectors.

Occupational safety and health issues have regained their crucial importance with the Covid crisis, making it more legitimate than ever to decide to include OSH in the fundamental principles and rights at work, as was already recommended at the ILO Centenary Conference in 2019. In November 2021, the ILO Governing Body finally decided that the agenda of the 2022 Conference would include the item of the “Inclusion of safe and healthy working conditions in the ILO’s framework of fundamental principles and rights at work”.

Our region, like many others, is struggling to overcome adverse demographics and a mismatch in skills, both of which are seriously hampering further growth and prosperity. What is the ILO’s role in addressing these challenges?

The negative demographic trends and skills mismatch extend as problems far beyond Southeast Europe. In this connection, the International Labour Conference just adopted (in December 2021) a Resolution on Skills and Lifelong Learning that calls on the ILO to develop a coherent, inclusive and genderresponsive ILO strategy and action plan on skills and lifelong learning for 2022–2030. These measures should include strengthening the ILO’s work in this area.

As deficiencies in the rule of law, high informality and the sluggish reform of labour legislation contribute to labour force outflows and widening the skills gap in this region, the ILO will pursue its Decent Work Country Programmes, with the main objective of assisting member states in the region in adopting and enforcing international labour standards and creating more and better opportunities for decent employment, as the only sustainable tool for the retention of skilled labour.

In this respect, the ILO welcomes Serbia’s recent decision to cooperate with the European Commission in addressing the challenges confronting social dialogue, occupational safety and health and capacity-building of the institutions in charge of labour rights and the enforcement of labour standards.

PRIORITY

What is at stake today is not to change the Decent Work Agenda, but to make it work for all workers across the world, regardless of their occupation and status

TELEWORKING

Teleworking is attractive, but may also have detrimental effects not only on the work-life balance, but also on fair working conditions, fair remuneration and health and safety at work

AMBIGUITIES

The various working arrangements introduced during the crisis have impacted on labour rights in many ways, with both positive and negative aspects

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