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.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

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

The three US financial war fleets

‘Moral obligation and political imperative’ to support Syria on path to peace: Guterres

Combatting terrorism: EP special committee calls for closer EU cooperation

Migrants and refugees face higher risk of developing ill-health, says UN report on displaced people in Europe

Veteran UN Syria Envoy to step down, pledges to work ‘until the last hour’ for peace

Dozens killed and injured by new airstrikes in western Yemen, UN coordinator condemns ‘outrageous’ toll

Cross-border cooperation: the EU Interreg programme celebrates 30 years of bringing citizens closer together

Commission adopts €4 billion investment package for infrastructure projects across 10 Member States

The EU resumes budget support assistance to the Republic of Moldova

EU Parliament approves CETA: the EU-Canada free trade deal sees the light in Trump’s gloomy era

Revamp collective bargaining to prevent rising labour market inequalities in rapidly changing world of work

Seize the opportunities of digital technology to improve well-being but also address the risks

The influence of the multilateral agreement on migrant health

Russia must urgently step up fight against foreign bribery

Achieving a European Education Area by 2025 and resetting education and training for the digital age

Light at the end of the Eurozone tunnel

European Business Summit 2015: In search of a vision for the future

The most unlikely innovators are changing ICT for development – it’s time we took notice

These photos show some of the world’s smallest things massively magnified

Harmonised Unemployment Rates (HURs), OECD – Updated: February 2020

Quality Education on the table at the European Parliament

We need to rethink neuroscience. And you can help us

State aid: Commission approves €300 million public support for the development of ultrafast broadband network in Greece

A long German political winter is on the way

Greece will probably stay in the Eurozone but at what cost?

The Parliament accuses core EU countries of exploiting their dominant political position

Visa facilitation and readmission: agreements with Belarus now in force

Microplastics, microbeads and single-use plastics poisoning sea life and affecting humans, says UN Environment

Busting the myths about coronavirus

Why education and accountability are important for developing countries?

Governments, businesses ‘walk the talk’ for investment in sustainable development: UN forum

Germany caught with selfish double standards in euro area policy

COVID-19 has hit Black Americans hardest. Healing this divide would lift the nation

“Be aware where you put your I Agree signature on and something else”; now Facebook by default opts you in an unseen private data bazar

Guterres lauds UN peacekeeping, highlights need to bridge ‘critical’ gaps

France pushes UK to stay and Germany to pay

The clothes of the future could be made from pineapples and bananas

COVID-19 not yet a pandemic, says UN health agency chief

Which EU countries have to correct their economic policies?

Mental Health in the COVID-19 era

EU fundamental rights under threat in several member states

Why income inequality is bad for the climate

What options the new President of Ukraine has?

“China is the only BRICS country to have either met or possibly slightly surpassed my expectations”, BRICS inventor Jim O’ Neil from Switzerland; the Sting reports live from World Economic Forum 2015 in Davos

The right approach to addressing overcapacity problem from a Chinese perspective

Sustainable Infrastructure and Connectivity in the Belt and Road Initiative (BRI): a stimulating China-EU dialogue at European Business Summit 2018

Three scenarios for the future of geopolitics

4 innovative renewable energy projects powering Europe’s green future

Media and entertainment in flux: it’s time for the close-up

FROM THE FIELD: Finding refuge in the ‘beautiful game’

Our tourism system is broken – time to customize

Jordan flash flooding: UN chief ‘saddened’ by loss of life

Is corporation tax good or bad for growth?

Impacting society with digital ingenuity – World Summit Award proclaiming the top 8 worldwide

VP McGuinness on women’s rights: “Not an option, but a duty”

Banks get trillions and the unemployed ECB’s love…

The Eurogroup protects Germany and blames others

How one traumatised child survived genocide and started a movement for mental health

United States: UN chief ‘deeply saddened’ by deadly California wildfires

New UN-Syrian Action Plan signals an ‘important day’ for child protection, says UN envoy

More Stings?

Advertising

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