5 ways Denmark is preparing for the future of work

 

Denmark 2018

Mr Lars Lokke RASMUSSEN, Danish Prime Minister. Copyright: European Union Event: 60th anniversary of the Rome treaties

This article is brought to you thanks to the strategic cooperation of The European Sting with the World Economic Forum. 

Author: Troels Lund Poulsen, Minister for Employment, Denmark

How do you prepare a traditional welfare state, with its institutionalized and tax-funded benefits, for the future of work? How do you maintain a healthy labour market, a level playing field, collective agreements and strong social dialogue, without killing the potential of new technology and innovation? Denmark has taken important steps to accommodate its changing labour landscape.

Rise of the platform worker

One of the game-changing consequences of the internet has been the birth of e-commerce. Consumers and companies have embraced buying and selling products online for mutual benefit, and traditional business models have been disrupted by new ones. For companies in retail with the ability to adapt, e-commerce has been a vehicle for growth. For law-makers, e-commerce has challenged legislation concerning taxation and consumer rights.

The transition from traditional retail has, to a large extent, been successful. Today, a new challenge has arrived. Digital platforms are facilitating physical labour, creating a fast, flexible connection between supply and demand for work. Once again, legislators are faced with opportunities and challenges.

A safety net for everyone

With a growing number of platform workers, a key issue is ensuring their labour market rights – both statutory rights concerning work safety, health and holiday allowances, and rights settled in collective agreements, such as wages and working conditions.

In Denmark, where wages are settled by social partners, the government plays a crucial role by ensuring a level playing field for competition between traditional workers and platform workers. Yet legislators depend on social partners to engage in dialogue and enter into agreements.

Another critical issue is ensuring that current legislation does not stand in the way of potential benefits. Platform work provides flexible alternatives to traditional employment for people who have limited abilities, or who want to plan their own working hours, or who need a stepping stone to more permanent employment.

In these cases, platform work can provide a gateway from unemployment and a fast track to the labour market. Yet legislation concerning social benefits and unemployment benefits must acknowledge platform work as work, and income from platform work as having the same value as income from traditional employment.

The Danish way

To handle the impact of technological change on the labour market, the Danish government established the Disruption Council in 2017. The council is headed by the Prime Minister, and comprises eight ministers and 30 members, including CEOs, social partners, researchers and others.

Discussion has centred around how public policy can embrace new forms of work while maintaining a well-functioning labour market. It has resulted in the following five steps to support innovation and the competitiveness of new technologies.

1. Adjusting the unemployment benefits system

Regulation concerning unemployment benefits for self-employed and atypical employees, such as platform workers, will be harmonized with rules for ordinary employees. This gives everyone, regardless of their form of employment, a better safety net and greater security if they lose their income. All types of employment count, meaning that a person who is both self-employed and an employee will be able to use both types of employment to earn unemployment benefits.

The new system will to a larger extent be based on objective, register-based and digital solutions that provide greater transparency for everyone. In addition, there will be more similarities between the unemployment benefits system and the tax system. Under the new agreement, all taxable income can be used to earn unemployment benefits.

2. Platform work is recognized as work with regard to social benefits

Not only will income from platform work be considered as equal to income from traditional work in relation to unemployment benefits, platform work will be made equal to traditional work when it comes to maintaining rights to social benefits.

Until now, a substantial barrier for unemployed people to engage in the platform economy has been uncertainty about the current legislation – specifically on how income from platforms will affect their right to unemployment benefits, offsetting and vesting rules. To strengthen transparency, the Ministry of Employment has made clear to unemployment insurance funds and municipal job centres that platform work is to be acknowledged as work. This removes the red tape blocking unemployed recipients of social benefits from using platform work as a stepping stone to enter the labour market.

3. The first collective agreement with a platform company

In April 2018, the platform Hilfr entered a historic, collective agreement with the union 3F. This was the first agreement between a union and a platform company in Denmark. It ensures the platform’s users have employee rights, including a pension and a holiday allowance. The contract acts as a bridge between the strong tradition of collective agreements in Denmark and the new digital platforms, providing platform workers with the potential to unionize.

4. Boosting the future potential of the sharing and platform economies

A short while ago, the government entered into a political agreement to strengthen the growth potential of the platform economy. It requires checking whether regulation concerning platform companies needs clarifying or adjusting, and launching a dedicated web platform to provide the platform industry with one point for answers concerning public regulation. The agreement also includes the establishment of a council with social partners and industry to advise the Minister for Business on developments regarding the sharing and platform economies.

Furthermore, it eases and clarifies tax terms for renting out cottages, full-year homes, cars and boats through a platform or rental agency. The tax authorities have also entered into cooperation with Airbnb, to ensure a clear framework for short-term rentals and automatic reporting of rental income to the Danish tax authorities.

5. Upskilling the workforce to meet changing conditions

This is crucial in preparing for the future of work in a broader context. The Danish government has entered into a tripartite agreement with social partners on vocational training and education. It is investing in future competencies with more flexible solutions, in easier access to education and training, and in strong lifelong learning possibilities. The agreement contains several initiatives targeting companies, workers’ incentives and opportunities to begin training and upskilling. One of these is a “transition fund” which offers free training to both skilled and low-skilled people.

Similar to how we have grown accustomed to e-commerce over the years, adapting to new conditions does not happen overnight. However, these initiatives are important steps towards creating an innovative ecosystem that drives healthy competition within the framework of the Danish Flexicurity model, ensuring a sound labour market with a proper social safety net.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Impact Investment needs global standards and better measurement

FROM THE FIELD: ‘Miraculous’ music made by hearing-impaired children

On Youth Education: “Just a normal day in the life of a medical student”

EU-Turkey relations: Will Turkey manage to revive the EU accession process talks?

Multilateralism more vital than ever, as World War centenary looms: Security Council

ECB steadily continues monetary easing policy as EU economy gains momentum

October’s EU strong digital mix: From Safe Harbour to Net Neutrality, Roaming and Snowden

Europe turns out more jobs this summer

EU regional differences betray an unjust arrangement

World Retail Congress Dubai 2016: Retail’s night of nights

WEF Davos 2016 LIVE: Banking moguls continue brandishing financial Armageddon to intimidate us all but in Davos they worry about the very distant future

“There are many converging visions and interests between the One Belt One Road initiative and the Juncker Investment Plan”, Ambassador Yang of the Chinese Mission to EU highlights from Brussels

Could switching between summer and winter time end in 2021?

Parliament ready to fight for a different EU budget

Why are the financial markets shivering again?

Parliament makes it easier to organise a European Citizens’ Initiative

Military escalation will have ‘serious consequences’ for Yemeni civilians, warns UN Special Envoy

Austerity ends in Eurozone, Germany is isolated

This is why Dutch teenagers are among the happiest in the world

Does the EU want GMOs and meat with hormones from the US?

MEPs want ambitious funding for cross-border projects to connect people

Data show EU Economy in a stubbornly subdued state

Silk Road Unlimited

EU to Google: How to dismantle European search engines in 13 steps

Burundi: Inclusive dialogue ‘only viable option’ for resolving country’s political crisis says, UN envoy

It’s time for the circular economy to go global – and you can help

The next 48 hours may change the European Union

CHINA: five letters that could mean…

Faith can overcome religious nationalism. Here’s how

Our Digital Future

‘Agile’, multilateral response vital to combat terrorism – UN chief Guterres

Teamgum @ TheNextWeb 2014

Dangerous Trumpism in the Middle East with an anti-European edge

Charlie’s tragedy energized deeper feelings amongst Europeans; back to basics?

Food system failures in our age of abundance

South Korea once recycled 2% of its food waste. Now it recycles 95%

US prosecutors now target Volkswagen’s top management, upsetting Germany

EU to increase spending and improve delivery of education in emergencies and protracted crises

UN lauds special chemistry of the periodic table, kicking off 150th anniversary celebrations

UN expert condemns new sentence for jailed Venezuelan judge as ‘another instance of reprisal’

The deforestation risks lurking in the banking sector

Brexit effect: Public opinion survey shows that EU is more appreciated than ever

Disaster Medicine in Medical Education: the investment you just can´t afford to ignore

Here’s how data can shine a light on financial crime

EU Youth Report casts stark light on life for young Europeans

Syria: UN-backed watchdog says chemical weapon ‘likely used’ in February attack

“Two Pack” approved: Is democracy chased away from Brussels?

China Unlimited: an exclusive interview with the former Ambassador of Hungary to China

Can a Bavarian Oktoberfest beer indulger bring down the Berlin government?

3 autonomous vehicle trends to follow in 2019

UN’s Grandi slams ‘toxic language of politics’ aimed at refugees, migrants

Why the Fourth Industrial Revolution needs more arts graduates

Cyprus banks under scrutiny

This forgotten element could be the key to our green energy future. Here’s why

The European Sting @ the European Business Summit 2014 – Where European Business and Politics shape the future

If people aren’t responding to climate warnings, we need to change the message

Mali facing ‘alarming’ rise in rights violations, warns UN expert

10 million Yemenis ‘one step away from famine’, UN food relief agency calls for ‘unhindered access’ to frontline regions

On eve of Gaza border protest anniversary, UN’s top humanitarian official for Palestine calls for calm

EU-U.S. Trade Talks: European Commission presents draft negotiating mandates

More Stings?

Trackbacks

  1. […] How do you prepare a traditional welfare state, with its institutionalized and tax-funded benefits, for the future of work? How do you maintain a healthy … Source link […]

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s