Fact Sheets on the European Union
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Employment policy

The European employment strategy, dating back to 1997, established common objectives for employment policy and contributed to ‘soft coordination’ among the Member States. Creating more and better jobs was one of the main goals of the Europe 2020 strategy. Since the turn of the decade, the Commission has proposed new and more ambitious targets in employment policy. EU law is relevant in certain areas, even if the responsibility for employment policy lies primarily with national governments.

Legal basis

Article 3(3) of the Treaty on European Union (TEU) and Articles 8-10, 145-150, 156-159 and 162-164 of the Treaty on the Functioning of the European Union (TFEU).

Objectives

According to Article 3 TEU, the Union has the duty to aim at full employment and social progress. The horizontal clause in Article 9 TFEU lays down that the objective of a high level of employment must be taken into consideration in the definition and implementation of EU policies and activities. Member States and the Union are tasked with working towards the development of a coordinated strategy for employment, particularly with regard to the promotion of a skilled, trained and adaptable workforce, and labour markets responsive to economic change, as described in Article 145 TFEU.

Achievements

A. From the early stages (1950s to 1990s) to the post-2020 targets

As long ago as the 1950s, workers benefited from ‘readaptation aid’ in the European Coal and Steel Community. Aid was granted to workers in the coal and steel sectors whose jobs were threatened by industrial restructuring. The European Social Fund (ESF) (2.3.2 European Social Fund), created in 1957, was the principal tool for combating unemployment.

In the 1980s and early 1990s, action programmes on employment focused on specific target groups, and a number of observatory and documentation systems were established.

In a context of high unemployment in most EU countries, the White Paper on growth, competitiveness and employment (1993) launched a debate on the EU’s economic and employment strategy by bringing the issue of employment to the top of the EU agenda for the first time.

The new chapter on employment in the Treaty of Amsterdam (1997) provided the basis for setting up the European employment strategy (EES) and the permanent Employment Committee with advisory status to promote the coordination of the Member States’ employment and labour market policies. The competence for employment policy remains, however, primarily with the Member States. The inclusion of a ‘social protocol’ in the Treaty enhanced the involvement of the social partners (2.3.7 Social dialogue).

The extraordinary Luxembourg Job Summit in November 1997 launched the EES together with the open method of coordination - the so-called Luxembourg process, which is an annual coordination and monitoring cycle for national employment policies based on the Member States’ commitment to establishing a set of common objectives and targets. The EES placed a high level of employment on the same footing as the macroeconomic objectives of growth and stability.

In 2000, the Lisbon European Council agreed on the new strategic goal of making the EU ‘the most competitive and dynamic knowledge-based economy in the world’, embracing full employment as an overarching objective of employment and social policy, and on concrete targets to be achieved by 2010 (the Lisbon strategy).

Following the 2007-08 financial crisis, the Europe 2020 strategy was adopted in 2010 and the European Semester was introduced as the mechanism for financial and economic policy coordination. This 10-year strategy for jobs and smart, sustainable and inclusive growth defined a number of headline targets for the first time, such as increasing the labour market participation of people aged 20 to 64 to 75% by 2020. All headline targets had to be translated into national targets by the Member States.

In 2017, the Commission presented the European Pillar of Social Rights (EPSR), which sets out 20 key principles and rights to support a renewed process of convergence towards better living and working conditions. It is accompanied by a ‘social scoreboard’ to monitor progress. At the Social Summit in Gothenburg in November 2017, Parliament, the Council and the Commission highlighted their shared commitment by adopting a common proclamation on the EPSR.

The 2021 action plan on the implementation of the EPSR set out three new EU headline targets to be achieved by the end of the decade, including the following:

  • Employment: at least 78% of the population aged 20 to 64 should be in employment by 2030;
  • Skills: at least 60% of all adults should participate in training every year.

B. Strengthening coordination and monitoring

The annual monitoring cycle for employment policies within the European Semester includes the following components:

  • Employment guidelines, drawn up by the Commission and adopted by the Council after consulting Parliament;
  • A joint employment report, published by the Commission and adopted by the Council;
  • National reform programmes;
  • Country reports and country-specific recommendations, drawn up by the Commission, with the latter being adopted by the Council.

The four employment guidelines (Article 148 TFEU) present strategic objectives for national employment policies and contain policy priorities in the fields of employment, education and social inclusion. The employment guidelines form part of the eight integrated guidelines, which also feature four broad economic policy guidelines (Article 121 TFEU).

In recent years, the employment guidelines have been aligned with the principles of the EPSR (2.3.1 Social and employment policy: general principles) and have integrated elements relating to the consequences of the COVID-19 crisis, the green and digital transitions, fairness during the green transition, the UN Sustainable Development Goals and the Russian invasion of Ukraine.

As a key monitoring tool used in the European Semester, the Commission proposed a revised social scoreboard (annexed to the EPSR action plan). It consists of 17 headline indicators, endorsed by the Council, assessing the employment and social performance of Member States in three broad dimensions: (i) equal opportunities, (ii) fair working conditions, and (iii) social protection and inclusion.

C. Binding legal acts – EU law

Based on the provisions laid down in the TFEU relating to the fields of employment and social affairs, as well as to freedom of movement, a number of directives, regulations and decisions have been adopted to ensure minimum standards across the EU Member States in the following areas:

  • Health and safety at work: general and specific rights and obligations, work equipment, specific risks, e.g. dangerous substances, carcinogens (2.3.5 Health and safety at work);
  • Equal opportunities for women and men: equal treatment at work, pregnancy, maternity leave, parental leave (2.3.9 The fight against poverty, social exclusion and discrimination);
  • Protection against discrimination based on sex, race, religion, age, disability and sexual orientation (2.3.9 The fight against poverty, social exclusion and discrimination);
  • Working conditions: minimum wages, part-time work, fixed-term contracts, working hours, employment of young people, informing and consulting employees (2.3.6 Workers’ right to information, consultation and participation; 2.3.7 Social dialogue);
  • Supporting services: enhanced cooperation between public employment services.
  • Free movement of workers: equal treatment, access to social benefits (2.1.5 Free movement of workers);
  • Posting of workers: duration, pay, sectors covered (2.1.13 Posting of workers).

D. Coordination through recommendations and other policy initiatives

In addition to the ‘hard law’ listed above, further measures help to increase coordination among the EU Member States through ‘soft law’, including non-binding Council recommendations and other policy initiatives introduced by the Commission.

  • The European Youth Guarantee aims to ensure that all people under the age of 30 receive a good-quality offer of employment, continued education, an apprenticeship or a traineeship within four months of becoming unemployed or leaving formal education.
  • A Council recommendation on the integration of the long-term unemployed into the labour market focuses on registration, individual in-depth assessments and job integration agreements to be offered to the registered long-term unemployed.
  • The European Skills Agenda contains 12 actions focused on skills for jobs in order to ensure that the right to training and lifelong learning is fulfilled across Europe. The year spanning from 9 May 2023 until 8 May 2024 has been designated as the ‘European Year of Skills’ with the aim of addressing skills shortages in the EU and promoting a mindset of reskilling and upskilling to help people develop the right skills for quality jobs.
  • A Commission recommendation on effective active support to employment following the COVID-19 crisis outlines a strategic approach to gradually transition between emergency measures taken to preserve jobs during the pandemic and new measures needed for a job-rich recovery.
  • The 2021-2027 Strategic framework on health and safety at work includes key challenges, strategic objectives for health and safety at work and actions and instruments to address these.
  • The European care strategy aims to ensure high-quality, affordable and accessible care services across the EU and improve the situation for both care receivers and the people caring for them, whether professionally or informally.

E. Supporting EU funding instruments

A number of EU funding programmes provide support in the area of employment.

  • The European Social Fund Plus (ESF+) (2.3.2 European Social Fund) is the main EU instrument for investing in people and brings together a number of funds and programmes, notably the ESF, the Youth Employment Initiative, the Fund for European Aid to the Most Deprived and the Employment and Social Innovation programme.
  • The European Globalisation Adjustment Fund for Displaced Workers supports people who have lost their jobs due to structural changes in world trade patterns, digitalisation, automation and the transition to a low-carbon economy.
  • The Recovery and Resilience Facility, the centrepiece of NextGenerationEU, is a temporary instrument to support reforms and investments undertaken by the Member States between February 2020 and 31 December 2026. The aim is to mitigate the economic and social impact of the COVID-19 pandemic and make European economies and societies more sustainable and resilient, and better prepared for the challenges and opportunities presented by the green and digital transitions.
  • REACT-EU (Recovery Assistance for Cohesion and the Territories of Europe) is a top-up to the 2014-2020 structural fund programmes and is additional to the 2021-2027 cohesion allocations. It prolongs and expands the crisis response and repair measures delivered through the Coronavirus Response Investment Initiative and the Coronavirus Response Investment Initiative Plus.
  • SURE (Support to mitigate Unemployment Risks in an Emergency) provided financial assistance to the Member States during the COVID-19 crisis, enabling short-time work schemes or similar measures to protect jobs and workers.
  • The Just Transition Fund aims to alleviate the social and economic costs resulting from the transition towards a climate-neutral economy by helping people adapt in a changing labour market. It is the first pillar of the Just Transition Mechanism, which is part of the European Green Deal.

Role of the European Parliament

Parliament’s role in this area has developed gradually. Since the Treaty of Amsterdam came into force, Parliament must be consulted on employment guidelines before they are adopted by the Council.

Parliament gave its strong backing to the Europe 2020 strategy. A number of the initiatives aimed at combating youth unemployment stem from Parliament proposals for concrete, practical actions, namely the EU Youth Guarantee and minimum standards on internships. In its resolution of 17 July 2014 on youth employment, Parliament called for an EU legal framework introducing minimum standards for the implementation of the Youth Guarantee, including the quality of apprenticeships and also covering people aged 25-30. In a resolution adopted in 2018 on the EU’s next long-term budget, Parliament called for a significant increase in funding for the implementation of the Youth Employment Initiative. On 8 October 2020, Parliament adopted a resolution expressing concern about the voluntary nature of the Youth Guarantee (currently a Council recommendation) and called on the Commission to propose a binding instrument. Parliament also condemned unpaid internships and urged the Commission to review existing European instruments, such as the quality framework for traineeships and the European framework for quality and effective apprenticeships. Parliament insisted that quality criteria be incorporated into the offers made to young people, including the principle of fair remuneration for trainees and interns, access to social protection, sustainable employment and social rights.

Furthermore, Parliament supported the approach taken in the recommendation on long-term unemployment in its resolution of 29 October 2015. Parliament’s intensive work on skills development had an impact on the European Skills Agenda. Parliament has highlighted the importance of lifelong learning and vocational education and training, including upskilling and reskilling. It has repeatedly called on the Commission and the Member States to establish a European Vocational Education and Training Area. It has also recognised the need for high-quality traineeships and called on the Commission to update and strengthen the related 2014 Council Recommendation and to turn it into a stronger legislative instrument.

Parliament’s resolution of 13 March 2019 on the European Semester stressed that the EU’s social goals and commitments are just as important as its economic goals. Following the outbreak of COVID-19, Parliament tried to mitigate the negative consequences of the crisis, particularly for the labour market. In a resolution adopted on 10 July 2020 on EU employment guidelines, MEPs called for radical measures to cushion the shock caused by the pandemic, in particular a revision of the forthcoming guidelines in light of the situation, and highlighted the need to tackle youth unemployment through an improved Youth Guarantee. Against the backdrop of the energy and cost-of-living crisis, Parliament called on the Member States and the Commission to prioritise the fight against unemployment and to reinforce the SURE instrument to support short-time work schemes, workers’ income and workers that would be temporarily laid off because of the increase in energy prices, among other causes, as well as to mitigate the effects of asymmetric shocks.

For more information on this topic, please visit the website of the Committee on Employment and Social Affairs.

 

Monika Makay