Covid-19: The short-term OECD mapping of employment and social policy issues

The OECD released a new web portal in response to the Covid-19 virus outbreak, “Tackling the coronavirus – Contributing to a global effort” including useful policy analysis and listing short-term policy solutions to cushion the impact of the crisis. In what follows the TUAC provides a trade union reading of the response on employment and social policy.

It is obvious at this point that the Covid-19 emergency hits all workers hard – some in terms of access to sick leave, unemployment or social security benefits, others in terms of intensified workload and the risk of contagion. Many fear to loose their jobs entirely or have already been laid-off. Those on temporary, casual and precarious jobs are facing even more risks. The OECD released a mapping on employment and social policies late last week.

‘Supporting people and companies to deal with the Covid-19 virus: Options for an immediate employment and social-policy response’ (link) is a collection of what governments have been doing in the last couple of weeks. The briefing highlights existing gaps in statutory rights and access to leave and compensation for different types of workers. It applies very similar categories to the TUAC briefing on policy responses in its labour market section and evokes some of the examples covered in our trade union mapping.

The OECD does acknowledge the strain on household incomes and the risk of a demand shock. This is welcome. Regrettably, it never explicitly recommends coordination with social partners and social dialogue as a steering or governance mechanism. The paper only addresses short-term policy solutions at this point. Policy recommendations as such remain scarce. In short, it appears to offer bandages to address a pandemic requiring multi-organ transplants. This might have more to do with government responses thus far than with the OECD assessment itself – which is very complete and illustrative.

Going forward, the following shortcomings should be redressed in a subsequent rendition by the OECD:

While collective agreements or unions are mentioned here and there (in view of agreements or as pillars of existing schemes that now need to be relaxed), the paper does not evoke the specific role of social partners and never recommends social dialogue as a steering or governance mechanism.
In discussing some of the coverage gaps, the paper does not take a stance on the underlying problems concerning entitlements and the rise in flexible and non-standard working arrangements (also as a result of past crisis induced structural reforms).
While discussing short-term employment schemes which are important to prevent mass unemployment, the paper does not go into the lessons learned from the previous crisis of preventing the over-use of STW schemes and lay-offs post-emergency state. All of this bearing in mind that labour market institutions are considerably weaker now than they were in 2008. The TUAC calls on the OECD to express a preference for short-term unemployment schemes to be limited and transitional.
No OHS measures are evoked – given the risk of contagion, especially for those on the frontlines, this needs to be discussed further.
The discussion on measures for workers in essential sectors falls too short – for example concerning their safety, their intensified workload, their care responsibilities, etc. This is also due to the fact that governments have been slower to react, yet many agreements with unions are emerging.
There needs to be further discussion on the financing of any of the measures evoked depending on the national system but also in terms of the time horizon in view of a longer emergency period.

The main question on everyone’s mind hence is how policies can extend and be tailored to all workers over a longer time horizon with adequate funding. The TUAC has alerted to the fact that many of the proposed measures in OECD countries are regressive in nature, and they will not reach most exposed worker categories or be tailored to occupational needs in sectors and their supply chains:

Health professionals fighting the coronavirus on the frontlines, workers in manufacturing, retail, logistics (including transport) and others that are not lucky enough to work from home and lack effective protection of their health and working time regulation as they are faced with intensified work rhythms;
In general, teleworking implies IT capacity and connectivity that is often beyond the reach of SMEs and regions suffering from digital divides, cutting out a big share of workers;
Employees in transport, food, tourism and hospitality industries, which often coincide with the least paid and less protected workers, and see their jobs endangered.
Self-employed and precarious workers who are not adequately covered by sick and temporary-leave benefits.

The OECD briefing delivers a comprehensive overview on policy measures taken thus far regrouped in its 5 sections. Several aspects in the paper highlight the need to optimise policy responses further:

Securing workers’ jobs and the economic viability of firms

In “Securing workers’ jobs and the economic viability of firms”, the first solution evoked is short-term work schemes: the German Kurzarbeit regulation that has now been extended to temporary workers (“to prevent labour market segmentation”) with 100% of the social insurance will be publicly covered (vs. 50% in 2008/9); the Danish social partner agreement, the extensions made in Korea, the unification of schemes in France and the introduction of a temporary lay-off scheme in Portugal. The OECD argues for a rapid take-up of these and thus the relaxation of requirements including existing collective agreements. Some caution is given against unduly subsidising of jobs that would remain redundant post crisis. The TUAC calls on the OECD to express a preference for STW schemes to be limited and transitional. A further discussion would be needed on countries where such policy options are limited, yet the need remains to avoid lay-offs and a relaxation of job protection. Also, conditionality criteria on jobs and wages need to be tied to the support of private business. As the OECD mentions France and Italy introduced limitations to economic dismissals to force companies to use the expanded STW schemes.

The paper briefly refers to the need to staff essential sector and recommends here the relaxation of hiring but also firing rules – the second point seems unnecessary. There is no need to relax ‘firing’ rules. It would be detrimental to job security in the crisis aftermath. Overall, in tackling this topic the OECD could address the lack of job protection for non-standard and self-employed workers more. When the OECD starts discussing the crisis aftermath, re-deployment obligations, conditionality clauses and the need to reverse some of the relaxation measures have to be front and center. So is the strengthening of labour market institutions to caution against labour market segmentation.

Providing financial support to firms affected by a drop in demand

In “providing financial support to firms affected by a drop in demand,” it seems likely all business will experience a drop in demand. Government support is inevitable but should not be unconditional. Public grants, subsidies, tax relief are privaleges of the public trust, granting a licence to operate in the post-pandemic economy. In consideration, for such financial privilege, recipients of government backed capital should be asked to provide evidence of their commitments to social cohesion and stability, including sector-wide agreements with workers, worker representatives and trade unions.

Providing income support for those losing their job or their self-employment income

In “providing income support for those losing their job or their self-employment income”, valuable points are made on securing household incomes. The paper re-groups countries into coverage rate for standard workers upon job loss – showing significant differences in protection. It points to the fact that non-standard workers are 40-50% less likely to receive support and if they do, it is lower than for standard workers. It then goes on to point to recent measures of coverage extension, means-tested social safety net benefits etc. Other measures such as for low-income families (UK) or lump-sums are also evoked. The paper rightfully points to the need to postpone certain reforms (France), evokes new measures to relax interaction with public employment services (incl. online) and points to other measures to help households (rent/ mortgage relaxation, utility bills’ deferrals, etc.).

Sick leave and care responsibilities

The OECD identifies 3 sick leave provisions: (1) Extending paid sick leave coverage to non-standard workers, including the self-employed. (2) Extending the duration of paid sick leave or waiving waiting periods and aligning them with quarantine and medical recommendations. (3) Adapting reporting requirements to access paid sick leave, e.g. by waiving the need for medical certification. It is welcome that the OECD clearly argues in favour of paid sick leave and underlines that it “helps to slow the transmission of the virus”. The OECD rightly points to the lack of statutory provisions in some countries (US, Korea) and the fact that a full wage coverage or sufficient time span is not given in others. It is positive that the OECD discusses the need to extend coverage to short-time and part-time workers and their exposure (as they find themselves in the service sector). They point to non-coverage in some countries (Australia), and difficulties with entitlement criteria and waiting time (e.g. in Italy).

The paper further discusses specific sick leave measures for quarantined workers. In our view, special attention needs to be given to low wage workers. The OECD could do more to emphasize the need for job and income security to relieve intense pressures for low wage workers to keep working through illness.

Meanwhile, the discussions on parental duties in times of school and childcare facilities closings is fairly complete and rightfully points to different family configurations (e.g. single parents). The paper signals the absence or unclear rights on unforeseen parental leave and the limited time frame where they exist. Portugal and France are identified as the countries with greater coverage in regard to benefits. Not much is said about taking leave to take care of other adult family members – which at this point in time becomes more important than ever.

Telework

Measures to encourage broader telework include subsidies to SMEs and negotiations and guidance by social partners. The OECD is pointing to the need to relax protection over telework and go without prior approval by unions or – as in Italy – find a tripartitie exceptional agreement. It rightly mentions housing and connectivity conditions as an obstacle to telework. Therefore, the OECD should be careful not to lean so heavily on internet-only benefit processes or assume that workers, whose income security is challenged or who are already in lower income households, will keep on affording sufficient broadband coverage. The digital divide has been real before the Covid-19 emergency, it shows its repercussions even more now.