A Tale of Oversimplification and Deregulation: The Mainstream Approach to Labour Market Segmentation and the Recent Responses to the Crisis in European Countries

Abstract

After advocating flexibilization of non-standard work contracts for many years, some European and international institutions and several policy makers now indicate the standard employment relationship and its regulation as a cause of segmentation between the labour market of "guaranteed" insiders, employed under permanent contracts with effective protection against unfair dismissal, and the market of the "not-guaranteed" outsiders, working under non-standard contracts. Reforms of employment legislation are therefore promoted and approved in different Countries, allegedly aiming at balancing the legal protections afforded to standard and non-standard workers. This paper firstly argues that this approach is flawed, since it oversimplifies reasons of segmentation as it concentrates on an "insiders-outsiders" discourse that cannot easily be transplanted in Continental Europe. After reviewing new legislative changes in different European Countries, it is then argued that lawmakers focused on "deregulation" rather than "balancing of protections" when approving recent reforms. The mainstream approach to segmentation and some of its derivative proposals, such as the calls to introduce a "single permanent contract", are lastly called into question, as they seem to neglect the essential role of job protection in underpinning the effectiveness of fundamental and constitutional rights at the workplace.

Keywords: Responses to the crisis, labour market segmentation, dualist labour markets, non-standard work contracts, single permanent contract

JEL Classification: J23, J42, J51, J58