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13.5.3.  Social protection in the EU

    The European Social Protection Committee (ESPC), composed of two representatives from each Member State and two representatives of the Commission, is an advisory body responsible for assisting the Council and the Commission (Article 160 TFEU and Decision 2015/773). Its main tasks are to monitor social protection policies in the Member States and the Union, to foster exchanges of information, experience and good practice between the Member States and with the Commission, and to prepare an annual report. In 1990, the Commission set up a system for mutual information on social protection (the MISSOC programme), which is run by a network of national correspondents and coordinated by the European Institute of Social Security.

    As part of the implementation of the Charter of workers' fundamental social rights, the Council adopted, in 1992, two important Recommendations. The first is aimed at helping the most disadvantaged by inviting the Member States to recognise a general right to guaranteed resources and benefits for anyone living in a Member State who has insufficient means [Recommendation 92/441]. The second is aimed at promoting a harmonisation of social protection objectives and policies, so that the free movement of people is not impeded by the different levels of social protection in the Member States and social protection is not adversely affected by competition between the various national systems [Recommendation 92/442]. This last Recommendation is particularly important because the Member States acknowledge in it that comparable trends lead to common problems and challenges (unemployment, ageing, changing family structures) and that a single market can be created while maintaining the diversity of social protection systems in the Member States, mainly as regards the arrangements for financing and organising them, but that the long-term objective of the Union is the convergence of social protection systems. In view of this objective and the changes made necessary by the deteriorating relationship between the size of the labour force and the number of pensioners, the Commission launched a debate on the future of social protection, particularly concerning its financing and the way to make it more employment-friendly [COM/95/466].

    Article 151 of the Treaty on the functioning of the EU (ex Article 136 TEC) names proper social protection and improved living and working conditions among the objectives of the Union and the Member States. Article 153 (TFEU) states that the Union shall support and complement the activities of the Member States concerning, inter alia, social security and social protection of workers. Social protection in the strict sense usually means social security, while social protection in a broad sense includes social security among other social rights of the citizens. In fact, under the heading "solidarity", the Charter of Fundamental Rights of the European Union [see section 9.2] mentions several rights, such as: the workers' right to information and consultation within the undertaking; the protection in the event of unjustified dismissal; fair and just working conditions; protection of young people at work; and, of course, social security and social assistance.

    Concerning this last subject, namely social protection in the strict sense, the Charter of Fundamental Rights declares that the Union recognises and respects the entitlement to social security benefits and social services providing protection in cases such as maternity, illness, industrial accidents, dependency or old age, and in the case of loss of employment, in accordance with the rules laid down by European law and national laws and practices. The Charter acknowledges that everyone residing and moving legally within the European Union is entitled to social security benefits and social advantages in accordance with European law and national laws and practices. According to the subsidiarity principle, however, the Member States must apply European law if and where it exists. Concerning social security, European provisions concern only the implementation of the principle of equal treatment for certain categories of workers, i.e. immigrants [see section 6.4.2.] and women [see section 13.5.5]. For the rest, social security is covered by the national law of each Member State. Actually, social protection expenditure represented 27.5% of gross domestic product (GDP) in the EU in 2001, with marked disparities from one Member State to another, ranging from 31.3% in Sweden to 14.6% in Ireland.

    In fact, the Member States have preferred cooperation rather than harmonisation in the fields of social protection and particularly social security legislation. On these subjects the Council decides alone (after consulting the Parliament) and by unanimity, which means that any Member State may veto the adoption of European legislation (Article 153 TFEU). It is true that as systems of social protection reflect the traditions and existing social benefits of each individual State, it is not easy to change them. However, in an internal market and even more in an economic and monetary union, differences between the various social security systems can constitute distortions of competition, hinder the free movement of labour and exacerbate regional imbalances. Therefore, a regulation aims to coordinate national social security systems so as to eliminate obstacles to freedom of movement, thereby allowing EU citizens to move freely within the Union, whether for purposes of study, leisure or work, without losing any social security rights or protection to which they are entitled [Regulation 883/2004, last amended by Regulation 1372/2013 and Regulation 1368/2014]. In this framework, a Directive provides rules for facilitating the access to safe and high-quality cross-border healthcare and promotes cooperation on healthcare between Member States, in full respect of national competencies in organising and delivering healthcare [Directive 2011/24].

    The Union has already made headway when the term "social protection" is taken in its broadest sense to cover social security and the right to work. An important European measure for the social protection of employees, particularly those of multinational companies, is the Directive on the approximation of the laws of the Member States relating to collective redundancies [Directive 98/59, last amended by Directive 2015/1794]. Employers who envisage such redundancies have to hold consultations with workers' representatives on the possibilities of avoiding or reducing such redundancies. Moreover, the employer has to notify any proposed collective redundancy to the competent official authority and may not implement it before the expiry of a period of 30 days which the authority uses to try to find solutions to the problems that have arisen and/or to lessen the impact of the redundancies. This Directive is particularly important for workers employed by multinational companies which operate in one or more EU countries, as, by laying down provisions common to all Member States, it prevents multinational companies from taking advantage of differences between national laws.

    In the same vein, a Directive on the approximation of the laws of the Member States aims at safeguarding employees' rights in the event of transfers of undertakings, businesses or parts of businesses [Directive 2001/23, last amended by Directive 2015/1794]. Before any such amalgamation, the workers' representatives have to be informed of the reasons for it and of its consequences for the employees and of the measures envisaged in their favour. In principle, the workers' rights and obligations are transferred to the new employer for at least a year and agreement on the conditions of the take-over has to be reached in consultation with the work force. Failing agreement between the employer or employers and the workers, an arbitration body gives a final ruling on the steps to be taken in favour of the workers. A representation scheme not dependent on the employer's will is necessary for compliance with the Directive [Cases C-382/92 and C-383/92].

    But the workers' interests also need to be protected in the event of the insolvency of their employer, especially where assets are not sufficient to cover outstanding claims resulting from contracts of employment or employment relationships, even where the latter are privileged. To prevent such situations, a Council Directive obliges Member States to set up guarantee institutions independent of the employers' operating capital so that their assets are inaccessible to proceedings for insolvency [Directive 2008/94, last amended by Directive 2015/1794]. In such an eventuality, those institutions must settle the claims of employees arising prior to the insolvency of the employer, including contributions under social security schemes.

    A Directive on the protection of young people at work prohibits work by children (less than 15 years of age or still subject to compulsory full-time schooling), with the exception of certain cultural, artistic or sporting activities. Children of at least 14 years of age may take up combined work/ training schemes, in-plant work-experience schemes and certain light work [Directive 94/33]. The Directive asks Member States to strictly regulate work done by adolescents of more than 18 years of age, by imposing specific rules in respect of working time, daily rest periods, weekly rest periods and night work, and laying down technical, health and safety standards.

    A clear link exists nowadays between social protection systems and the European employment strategy [Commission report, see section 13.3.2]. Noting with satisfaction the views expressed by the Commission in its communication on a concerted strategy for modernising social protection, the Council, on 29 November 1999, underlined the need for cooperation between the Member States and at European level, entailing a structured and ongoing dialogue, follow-up and exchange of information, experience and good practice. The Commission proposes to make use of the "open method of coordination" for modernising social protection, calling on the Member States to draw up preliminary reports taking stock of their respective systems, for analysis by the Commission, with a view to identifying common reform objectives. The Commission refers to three principles which could serve as a basis for reform: accessibility of care, taking into account the needs and difficulties of all groups and individuals; high-quality care keeping up with medical advances and the emerging needs associated with an ageing population; the long-term financial sustainability of this care, aiming to make the system as efficient as possible [COM/2004/304].

    With the progressive ageing of Europe's population, the problems of retirement and post-retirement become increasingly acute and require cooperation between Member States. In a Resolution on flexible retirement arrangements the Council wants older people to continue to play an active part in society and maintain a link with the labour market. It emphasises that a flexible retirement policy could constitute a rational response to changing demographic patterns and to labour-market changes, but that flexible retirement arrangements are a matter for each Member State, bearing in mind the principle of subsidiarity [see section 3.2.]. However, it calls on the Commission to promote exchanges of information and to examine whether measures taken by the Member States need to be completed. To this end, the European system of integrated social protection statistics (ESSPROS) provides a methodological framework based on common standards, definitions, classifications and accounting rules to be used for compiling statistics on a comparable basis for the benefit of the Union [Regulation 458/2007].

    In a communication entitled "The future evolution of social protection from a long-term point of view: safe and sustainable pensions", the Commission proposed formalising and strengthening cooperation between the Member States by using the "open method of coordination" [COM/2001/362]. This involves setting common objectives, translating these objectives into national policy strategies and, finally, as part of a mutual learning process, periodic monitoring on the basis, inter alia, of commonly agreed and defined indicators. The overall strategy proposed by the Commission covers the three pillars of the pension systems, i.e. statutory social security schemes, occupational schemes and personal pension schemes. On the basis of the national strategy reports submitted in September 2002, the Commission noted that all the Member States had, to varying degrees, launched reforms aimed at safeguarding the adequacy of pensions in the future without undermining public finances or overburdening future generations. However, it concluded that most of the Member States would have to make further reforms to guarantee adequate and sustainable pensions in an ageing society. Extending working life was one possible solution proposed, with older workers being encouraged to stay longer in the labour market and given incentives through pension schemes [COM/2002/737].

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