Research program ReflecT 2014-2018

Labour Market Dynamics, Employment Regulation and Flexibility-Security Outcomes

Joint Research Program: ReflecT / Labour Law and Social Policy at Tilburg University, 2014-2018

The 5-year Research Program 2014-2018, was developed in joint collaboration between the former research institute ReflecT and the former Department of Labour Law and Social Policy. It was be conducted jointly with other research departments within Tilburg University, notably the departments of HR-studies, Economics and Sociology.

The increasing dynamics on the labour market resulting from globalisation, technological change (automatisation, robotisation) and demographic developments (ageing, migration) impacts the flexibility-security balance and social participation and wellbeing outcomes through its impact on the behaviour of individual and social actors and the regulations and governance of the employment relationship. The study of the relation between labour market dynamics, the regulation of the employment relationship and the flexibility-security, participation and wellbeing outcomes create new avenues for multidisciplinary research to which lawyers, economists, sociologists, psychologists and HR-scholars may contribute.

Within each of the distinct traditions of research only single parts of this relationship are studied. Lawyers focus on the consequences of the increasing dynamics for regulation and governance, departing from the foundations and principles of law. Economists study the relationship between these dynamics and efficiency-equity outcomes from the foundations of economic behaviour. Finally, psychologists, sociologists and HR-scholars study the impact of these dynamics on individual and social (group) behaviour and their outcomes, departing from the perceptions, motivations, preferences, social norms and values of individual and social actors. The multidisciplinary research program seeks to combine the various perspectives to shed new light on the relationships studied.

A common challenge to modern labour markets, according to all three disciplinary perspectives, is the extent to which and the way in which the increasing dynamics on the labour market and behavioural responses to these changes influence the classical efficiency-equity balance or the balance between economic and social outcomes translated into the flexibility-security balance, participation and wellbeing. Economic outcomes with respect to the labour market pertain to the demand and supply of labour, to human capital formation and to wages. Economic research in this domain therefore focuses on the way economic behaviour impacts on job matching, productivity and on wage and employment careers. Social outcomes pertain to the level of (social) protection or income and employment security but also to inequality, well-being, education, participation and social cohesion. These outcomes are however strongly affected and mediated by the design of regulatory regimes and practices and modes of governance at all levels: from the individual and company (HR policies) level, through the sectoral, regional and national to the supra-national level.

At all these levels the challenge is to design a regulatory and institutional set-up that is able to facilitate and support a proper efficiency-equity balance and high levels of participation and wellbeing. To give one example: The European Union has articulated the flexibility-security balance in the Treaty as a key mission: “to develop and maintain a strong competitive and dynamic social market economy with full employment and high levels of protection”. This requires proper strategies and new forms of governance. It also raises questions about the feasibility of real win-win strategies. Is it possible to fully reconcile economic and social outcomes in the labour market domain, or does one of the objectives inevitably suffer?

Key themes

The four key themes within the research program 2014-2018 were:

Regulation and governance of labour markets ...

Regulation and governance of labour markets and how they shape outcomes

As a first connecting theme, several projects within the research program focused on modes and forms of governance and regulation of labour markets and how they shape labour market outcomes. Key concepts here are “Globalization”, “Europeanization”, “decentralization” and regional and transnational governance. In general, this research at different levels of the labour market addressed issues of regulation and governance with respect to inclusive labour markets and flexibility-security and wellbeing outcomes against the backdrop of labour market dynamism (e.g. flexibilisation, ageing and innovation). It thus related well to the Horizon 2020 program priority on inclusive and secure societies.

  • Focusing at the EU-level and at the interplay with the national level, one specific emphasis of research was on the effect of the increasing economic governance by the EU, strengthened as a result of the continuing financial and economic crisis, on the social goals and performance of the EU and the Member States.
  • At the global level, the way in which different public, private, binding and non-binding regulatory regimes affect the lives of people in formal and informal employment relationships is studied. A globalizing economy in which people, capital and goods flow between countries at an unprecedented pace calls for an analysis of the scope, content and impact of fundamental labour standards. With inequality on the rise, it is especially the legal and social-economic position of vulnerable groups that has to be addressed. Further emphasis within this research theme should be on the roles and responsibilities of different global actors like international governmental organizations (IGO’s), global workers’ and employers’ organizations and other NGO’s, transnational corporations and national governments in order to find a fair balance between social and economic values and outcomes worldwide.
  • Another research topic focuses on the individual and company level of employment and employment relationships. One study concerns the question how intellectual property (IP) rights are allocated in employment relationships and whether the current way of regulation resonates with the implications of modern labour markets where workers are expected to act in a more ‘entrepreneurial’ way.  This entrepreneurship regards both workers’ activity on the labour market (they are expected to be mobile and actively work on their employability) and their activity within the employment relationship. Arguably, these developments should have an effect on the division of IP rights in employment. Indications are, however, that they do not:  the laws in this sphere mostly stay the same, meaning that in principle the employer is entitled to the rights in any intellectual property developed by employee, unless the parties agree otherwise.  It is known that in employment relationships it is difficult for an individual employee to indeed ‘agree otherwise’. The question is whether workers’ representatives – who traditionally and legally are equipped to countervail the power imbalance – manage to negotiate alternative IP rights for workers in collective agreements. Another question concerns the implications of modern labour markets on the EU’s efforts in standardizing the IP rights at European level. For this research collaboration will be sought with other TLS researchers in the area of IP rights.
Labour market dynamics and labour mobility

The first subtheme in this research line on labour market dynamics focuses on the way ongoing structural changes on the labour market such as flexibilisation, ageing and innovation impact the position and careers of particular groups in the labour market such as youngsters, the elderly or solo self-employed people. Particular interest exists for the long-term or life-course consequences of exposure to particular risks caused by unemployment, health impairments and disability, low skill and insecure employment. One of the issues here pertains to the “scarring” and cumulating disadvantage effects of exposure to these risks for career-long income and employment security and wellbeing. Use is made of repeated cross-sections and long running panel studies while employing methods of pseudo experimental designs, treatment models and event history models.     

A second subtheme of this research line concerns the topic of “working and labour mobility across borders”. As the dynamics of international labour migration are increasing, and will most likely tend to do so over the next years, this represents a key topic, which includes issues, from both an empirical and legal-normative viewpoint, such as transnational careers and their impact on life-courses, the posting of workers and other forms of temporary labour mobility or migration, the role of transnational manifestations of self-employment and the impact on national and local terms of employment.

  • A specific topic of this second subtheme, at the transnational sectoral level, will be examined together with researchers from other TiU Schools. This concerns the concept of “circular migration”. The circular migration concept aims to be potentially responsive to both the labour market needs of EU Member States in view of the ageing of society and the needs of the countries that might (temporarily) supply labour forces that can help match these needs.
  • Another subtheme of this research theme focusing at transnational level concerns the enforcement of labour law. Since subsequent enlargements in 2004, 2007 and 2013, labour mobility is rapidly increasing within the European Union. This line of research aims to analyse the influence of this development on the possibilities for transnational workers to claim their rights and the possibilities for national actors such as labour inspectorates and trade unions to enforce labour law. Crucial for transnational and national actors alike is to create a balance between guaranteeing effective protection of workers’ rights and facilitating free movement of labour for economic purposes on the internal market. The main purpose is to identify and assess effective, dissuasive and proportionate tools and methods to claim and enforce workers’ rights. In this respect, special attention will be paid to innovative tools such as designed by public and private cooperation, and alternative governance tools such as Alternative Dispute Resolution and Online Dispute Resolution (ADR and ODR) as an alternative to traditional judicial compliance tools in the area of workers’ rights. Insights from behavioural economics and concepts such as ‘nudging’ may also be explored in this context.
  • At the interplay of the sector and national level, another line of research here concerns the role and future of sector level/multi-employer bargaining and collective labour law in changing   labour markets, especially with regard to the growth of non-standard workers and migrant workers. The program will inter alia look into the position of specific groups in the labour markets, such as flexible work forces, young people, migrant workers, knowledge workers, the self-employed and older workers and investigate the labour market careers, access to facilities and entitlements of these groups.
Foundations of labour law, labour market behaviour and outcomes

The third theme connects the theoretical issues related to the study of labour law and labour market behaviour and their outcomes. It transcends the different levels of the labour market while focusing on the theoretical questions associated with the foundations of labour law and labour market behaviour. With regard to the latter this research line departs from labour economic theory and the fundamental difference between labour markets and other markets and the implications for labour market outcomes. This means that the research focuses on the issue why labour markets are imperfect, that is which factors can be held responsible for it (institutions, social norms, values), and how they can be made less imperfect through reshaping the regulatory and institutional context. It also concerns the broader theoretical and empirical issue of how institutions may affect the social and economic performance of labour markets with a view to the flexibility-security balance, social participation and wellbeing outcomes.

Results of these empirical studies may be useful as impetus for legal research, for instance on the so called open norms such as ‘good faith and fair dealing’ and ‘good employership and good employeeship’. These legal norms also imply a certain ‘moral’ behaviour on the part of the contracting parties, while at the same time the basic premise of contract law is that the contracting parties should be as free as possible in the agreements they make. That means a certain ‘economic behaviour’ is also implied, since the concept of freedom of contract hypothesizes people acting in their best interest.

This research line hence focuses on the impact of institutions and the consequences of structural changes on the labour market for the flexibility-security balance, social participation and wellbeing outcomes. In this research attention will also be devoted to the social and moral dimensions of economic behaviour referring to the notions of bounded rationality and moral or ethical sentiments (including concepts such as social comparison, altruistic behaviour and empathy, social capital and social trust). In analytical terms the research studies the causal relationships between preferences, values, labour market behaviour and flexibility-security, participation and well-being outcomes. A particular interest exists for the way institutions, which partly reflect common values and social norms in society, affect these relationships. These causal relationships are studied in three main research areas: human capital, productivity and innovation (e.g. automatization and robotisation); labour market behaviour, inequality and inclusive labour markets, and health, well-being and quality of life. These three areas are also connected to the priorities expressed in the innovation agenda of the Dutch government and the government’s top sector policy in particular the human capital agenda. They also resonate well with the major goals of the Europe 2020 Strategy especially those on smart and inclusive growth.

HRM policies and inclusive labour markets: ...

HRM policies and inclusive labour markets: agency, governance and outcomes

The fourth theme concerns a new perspective in HRM policies to view employees as active agents in organizations and in the labour market. At the company level research will be conducted to explore the importance of new concepts of HRM such as corporate social responsibility, the psychological contract, hybrid work statuses and individual arrangements (i-deals), as well as discrimination and equal treatment of employees (e.g. of employees with flexible or standard contracts). At the sector and regional labour market level the research focuses on the way networks of organisations collaborate and shape new ways of governance of the employment relationship (e.g. labour pools, mobility centres, intra –and intersectoral work-to-work trajectories) and by doing so also impacting HRM policies at company level. These new concepts and forms of HRM policies at various levels also impact on labour market outcomes with a view to flexibility-security, social participation and employees’ health and wellbeing and therewith on attaining the goal of an inclusive labour market.

Traditionally, research on HRM has mainly treated employees as if they are passive recipients of the work environment and the HR policy and practices the organization offers. However, employees are active agents with different moods, personalities, needs, motives, life and career stages, life histories et cetera. Therefore, employees will not only respond to organization measures, but will also (try to) shape their work environment and HR practices to make sure they fit their needs, motives, abilities, life arrangements et cetera. Hence, active employees will shape their own career and employment relationship (including HR practices) as well as the content of their job. Evidently, this ‘remodelling’ of the employment relationship depends on its context shaped e.g. by legal regulations and opportunities but also by the economic conditions, values and social norms, while it also varies across different categories of workers as indicated by e.g. the level and nature of the job, health situation, education level, age et cetera. In our research we will connect this new active agency perspective with theory and research on employability, in particular regarding emerging new concepts briefly explained below.

The first two concepts concern the adaptation of the job content to meet the needs of the employee through job crafting and job carving. Job crafting concerns a specific way of how employees themselves, through agency, shape the content of their job to fulfil their needs and expectations. Job carving deals with redesigning the work organization and the workplace (e.g. through function creation) to better meet the qualifications and needs of specific categories of workers such as employees with a handicap. This pertains to the changing role and agency of the HR professional associated with appeals on corporate social responsibility (CSR) and societal pressures to strive for inclusive labour markets.

Another novel agency concept in this respect is the ‘i-deal’ (idiosyncratic deal) that relates to a specific form of active employee behaviour concerning a customization of employment conditions to fit individual needs. I-deals differ in content; it may refer to negotiations on wages and remuneration, personal development, flexible working arrangements or special needs arrangements. I-deals can be of particular importance for improving employees’ employability. Following this line of reasoning, the concept of idiosyncratic deal may be a valuable enrichment of the theory and empirical research on employability. The quest for talent in the knowledge economy implies that organizations need to at least react to employee needs for tailored work and work arrangements. Taken together, a relevant theoretical and empirical question therefore is how organizations best respond strategically to employee initiated changes in work and employment relations.

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