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EU Labour Market Reforms

Reforms are essential to ensure that labour markets fit the changing world of work. For any country, an efficient labour market is a prerequisite for economic growth and competitiveness. Countries with forward-thinking labour policies and effective labour markets are more resilient and more likely to prosper.

One way to improve the efficiency of labour markets is to allow the private employment sector to fully play its role in the creation of jobs and growth . Appropriate regulation of the private employment industry is thus also a key element in supporting a country’s competitiveness.

In Europe, employment policies remain mostly a national competence but the European Union aims to better coordinate these policies through the European Employment Strategy for Smart, Sustainable and Inclusive Growth. Its implementation is mostly achieved through the European Semester process, the EU’s annual cycle of economic and social policy coordination. Part of this process is the country-specific recommendations which provide policy guidance tailored to each EU country on how to boost jobs and growth, while maintaining sound public finances.

Several European countries have recently introduced new conditions and restrictions on temporary agency work. These include restrictions on the provision of services, restrictions on the range of labour contracts that can be offered, pricing and tax policies that discriminate against flexible forms of work and new regulation on equal treatment and equal pay.

The World Employment Confederation-Europe is concerned by these adverse regulations imposed on the private employment industry which eventually prevent the sector from delivering the benefits it can bring to individuals, businesses and society as a whole. As demonstrated by the Smart Regulation Index developed by the World Employment Confederation, there is a clear positive correlation between smart regulation of the private employment industry and the efficiency of labour markets and overall competitiveness.

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