H en riett Rab
PhD. Associate Professor, University o f Debrecen Faculty o f Law, Hungary
Does human resource management correlate
with flexible employment?
Introduction
The title o f this paper requires som e prelim inary explanation. Researchers of hu m an resource (HR) m anagem ent w ith an econom ic slant argue th at the answer to the question raised in the title can only be “yes.” This m eans th at H R m anagem ent (H R M ) presumes and requires flexibility in th e provisions o f labour law and it is merely out o f self-interest that it views one aspect o f the security o f employees w ith exceptional attention. Fluctuation in job security has a harm ful effect o f creating a destructive workplace environm ent, and leads to dissatisfaction, anxiety and insecurity am ong the employees. Beyond acknowledging these straightforw ard effects, th e issue m ust also be addressed from another angle, that is the extent to w hich legal regulation considers the interest o f H R m anagem ent and, in the course o f analyzing proceedings, w hether legal provisions take into account the requirem ents and concerns of H R m anagem ent. The issue discussed here leads us to these basic questions: w hether developm ents o f codification and th e need for flexibility in labour law accom m odate the needs o f H R -m anagem ent and in w hat ways the right o f the employees to social security should be taken into consideration during th e strategic utilization o f capitalization in hu m an resources.
As a starting p o in t we can state th at the w orld o f labour has becom e in creasingly international and this process has resulted in a new direction o f the evolution o f labour law in Europe, especially in th e E uropean U nion. This evolution is m arked by the concept o f flexicurity. Em ploym ent has always been closely related to econom ic stability because o f the employers’ interests; yet soaring p roduction and o u tp u t have been increm entally determ ined by
th e rapid evolution o f new technologies.1 A n im po rtant h u m an instrum ent o f this is increasingly efficient em ploym ent, for w hich flexible forms o f em ploym ent are appropriate alternatives. It is always difficult to distinguish cor relation from causation w hen analyzing the links between econom ic perfor mance, em ploym ent creation, and labour m arket organization.2 Em ploym ent regulations are constantly changing; and both the interest o f the employers and the needs o f the labour m arket are becom ing part o f this regulation. Flexibility emerges in connection w ith the establishm ent o f legal frameworks for atypical forms o f em ploym ent, and these forms are widespread. This p h e nom en on also plays a key role in connection w ith guaranteeing fundam ental labour rights.
Actors o f the econom y regard labour law as an instrum en t th at creates equal conditions for com petition. This drives them to seek the extension o f the boundaries o f legal regulations. In other words: their goal is a reduction o f labour law guarantees. The recent liberalization o f the European U nion, in particular, the liberalization o f the services m arket resulting from Directive 2 0 0 6 /1 2 3 /E C , have shown th at in the single m arket there is a strong im bal ance between business interests an d the protection o f social rights.3
Relation of HRM and social law
Social rights com e into play on several accounts: m ost predom inantly, they provide fundam ental guarantees in the w orld o f labour, thereby ensuring se curity and protection for employees. H R m anagem ent has a vital interest in protecting the feeling o f security o f employees, since the role o f stable w ork environm ents is essential. The question here is how to strike the right bal ance: provisions o f labour law and entitlem ents to social rights also lim it eco nom ic com petition and are thus am bivalent instrum ents for H R M , w hich inherently intends to increase w ork efficiency. This paper discusses the fram e w ork for this interrelationship, w hich hopefully will provide an answer to the question raised in the title.
The institutions o f labour law take a basically neutral stance towards as pects o f H R m anagem ent. Elem ents o f labour law are m ainly specified by 1 H . Rab, P. Sipka, Are social rights obstacles to flexibility? “Social Justice 2 0 1 4 ” conference
abstract, 01-02. A ugust 2014.
2 M . D e Vos, European Flexicurity a n d Globalization: A Critical Perspective, “The International Journal o f C om parative Labour Law an d Industrial Relations” 2009, 25, 3, 209.
3 A. M attei, Prospects fo r Industrial Relations: Overriding M andatory Provisions in the Transna
tional Labour M arket, in: Blanpain R. (ed.), Labour Markets, Industrial Relations a n d H um an Resources Management, Grom Recession to Recovery, Bulletin o f C om parative L abour Rela
th e dem ands o f national and international politics and codified accordingly. The w orld o f econom ic labour law is intrinsically capable o f taking the con siderations o f H R m anagem ent into account w itho ut particular dem and for relevant regulation. O n the other h an d however, the public sector, w hich is w ithout such com petition, requires som e authoritative inclusion o f provi sions required by H R -m anagem ent.4 A measure o f this k in d is unacceptable in the labour law o f the private sector on account o f the principle o f the right to enter a contract freely, w hich is laid down in the code o f civil rights. The redressing o f labour law in the m anner o f the regulations o f the private sector (if we acknowledge the prior existence o f public sector labour law at all) evolved sim ultaneously w ith the increasing prevalence o f international dem and for m ore flexibility; perhaps it even triggered th e process. W ith the intensification o f the effects o f civil law the inten tio n to perfect th e p rin ciple o f freedom o f contract has appeared.5 In this context flexibility can be regarded as a com plex concept; it means th e regulation o f a flexible labour m arket, flexible forms o f em ploym ent and also the flexibility o f th e legal regulation itself.6
W ith the em ergence o f the no tion o f flexibility, the need for th e protec tio n o f social security has resurfaced once again, as this serves as a key ele m ent o f the aforem entioned balance. In m y view, these developm ents are not part o f H R m anagem ent, although they are also n o t independent o f it: the requirem ents o f the private sector for increasing efficiency manifests itself in ternally as H R -m anagem ent, however to the outside as th e desire to influence em ploym ent policies and regulations, w hich by th e end o f th e day comes dow n to the urge (often dem and) to induce codification. The role o f em ploy m ent policies in influencing the codification o f labour law is undeniable, yet this connection is also m odified by political considerations.7
The dem and for the intro ductio n o f flexible em ploym ent is a constant p o in t on the agenda at international professional labour law fora, w ith several diverse ideological backgrounds and various sets o f instrum ents and schemes o f realization. Beyond the search for the role o f labour law, all approaches
4 See for example the H ungarian act o n public servants (act C X C IX o f 2011), w hich prescribes an obligatory system o f aspects for application in connection w ith perform ance assessment. 5 Firlei K., N eue Formen u n d Aspekte atypischer Arbeitsvehältnisse, [in:] Österreichische Landes
berichte zu m Internationalen Kongress f ü r das Recht der A rbeit u n d der Socialen Sicherheit in Caracas, ed. H . Floretta, M anzsche Verlag, W ien 1985, 32.
6 C. Brewster, T. M ayne, O . Tregsakis, Flexible working in Europe, JW B 1997, 2, 67. 7 In H u ngary the official reasons b eh in d the creation o f the new labour code o f 2012 was to
adjust the labour law regulation to the changed em ploym ent situation, guaranteeing relief for employers affected by the econom ic crisis an d increasing an d readjusting productivity in general.
share the desire to offer alternatives to the current regulations th at serve the labour m arket by protecting the security o f employees. The debates focus on questions regarding th e extent th at the econom y can influence labour legislation and also w hether the law should offer solutions for the econom y or can only serve as an underlying instrum ent. These issues often overlap into th e realms o f the theory o f law and are irrelevant to the deliberations o f this paper, since the questions at stake here pertain to the science o f labour law and law-making, in particular to the role o f these, bu t ignore the direct con nection o f labour law to H R m anagem ent.
A m ore exciting p o in t could be the investigation o f how H R m anagem ent and labour m arket dem ands are related, and in w hat ways they interact and induce changes in each other. As a starting p o in t we can argue th at both are rooted in the same field: H R m anagem ent serves the requirem ent o f the employers through the purpose o f rationalizing hu m an resources in order to increase corporate (and production) efficiency. The well-being o f employees is also a factor in this rationalization process. At the same tim e th e labour m arket aims to maximize em ploym ent, in particular m arket-driven em ploym ent, while employees dem an d guarantees for the job protection. The achievem ent o f employee satisfaction and job security strongly correlate in m ost o f the cases. In the eye o f the employers, as econom ic actors, H R m an agem ent is an instrum ent to maximize profits; hence the various practices o f H R -m anagem ent aim to attain m ore flexible forms o f em ploym ent. In this respect, the idea o f flexicurity is principally the m anifestation o f the em ploy ers’ interests through the loosening o f the rigid provisions o f labour law, the elaboration o f individual forms o f em ploym ent an d throu gh th e appreciation o f alternative solutions for em ploym ent regulations. It could be argued th at the evolvement o f H R m anagem ent after W orld W ar II h ad a significant im pact on the p rofo u n d transform ations in the structure o f em ploym ent, w hich as a result constantly reshape the w orld o f labour law. The desire for renewal, per se, relates to the new approaches to H R in organizational developm ent, since the essence o f efficiency is the ability to adjust and adapt to changes in the environm ent, w hich can be clearly detected in th e dem and for m ore flexible em ploym ent. As the desire for the protection o f social security and the underlying guarantees em erged in connection w ith striking a balance in flexible em ploym ent, procedures o f H R m anagem ent em phasized greater at tentio n to employees and em braced social factors in m otivation, assessment o f perform ance and even in exploring reasons for fluctuation.
The level o f social protection depends on how it is approached: it encom passes a spectrum from basic labour law guarantees, th rou gh work-safety and w ork-health measures to initiatives th at im prove the well-being o f employees.
In this respect, the different understandings o f social protection lead to issues o f equality and non-discrim ination and to their relation to H R m anagem ent, especially rem uneration.8 Several papers and legal practice have proved th at equal opportunities are a vulnerable aspect o f em ploym ent, as discrim ination was significantly high in connection w ith w ork and em ploym ent.9 In this respect, flexibility and equal opportunities m ight be seen as contradictory, tho ugh the question is rather this: can both notions exist w ithin the field o f labour law?
Taking this idea further, the occurrence o f equal opportunities in H R m anagem ent is an interesting subject to exam ine,10 even if it m ust be adm it ted th at equal opportunities are no t a priority for H R m anagem ent. The principle o f fairness is however a standard notion in m otivation, perform ance assessment or even the w orking environm ent, w hich allows for the idea o f non-discrim inatory em ploym ent. In labour law w hich accepts the principle o f private law, the freedom to enter into a contract, and w hich views em ploy ees as h u m an capital, i.e. an instrum ent for achieving efficiency, the applica tio n o f the principle o f equal treatm ent is merely an obstacle w ith a social function. In H R m anagem ent it is furtherm ore an incom patible, deterrent instrum ent.
Beyond doubt, the role o f fairness in H R m anagem ent is im po rtant from th e p oint o f right proportions: the im provem ent o f efficiency should be com bined w ith the objective o f elim inating personal envy and dissatisfaction, as econom ic efficiency does not allow such risks.
Fairness, from another angle, also m eans lack o f discrim ination. W ithin th e boundaries o f efficiency, this can be com patible w ith th e doctrines o f H R m anagem ent. For instance, differentiation based on perform ance assess m ent cannot be considered discrim inatory. O n the other hand, rem uneration outside a previously agreed salary structure is no t just discrim inatory, but also contradicts the idea o f equal opportunities. M otivation, therefore, as a fundam ental elem ent o f H R m anagem ent, can evolve throu gh th e observa tio n o f the notion o f equal opportunities. A nother elem ent, th e recruitm ent and selection process, w hich poses great risks to equal opportunities, is defi nitely neutral to discrim ination: if there no requirem ent for discrim ination
8 Z. G urm ai, A. Benedek, Egyenlo m unkaert egyenlo bert? Egy aktualis kerdes europai vizsgalata, „Europai T ukor” 2009, 14, 4, 65—70.
9 See in connection w ith age discrim ination, w hich is a very typical form o f w orkplace dis crim ination: E. Barakonyi, A z eletkor szerepe a munkajogi szabalyozasban, „ H R & M unkajog” 2013, 10, 4 7 -5 2 .
10 See for typical aspects: B. Sandor, Diszkrim inacio a munkahelyen, „F undam entum ” 2002, 6, 3 -4 , 1 5 4 -1 6 2 .
during the form ation (descriptive) period o f a position, the em ployer will observe the requirem ents o f equal opportunity. However, if a discrim inatory approach appears m ore convenient for any reason, from a purely H R m an agem ent p oin t o f view, it will not pose an obstacle. Therefore, the role o f rules and regulations in labour law and social security is also to restrict H R m anagem ent by legal provisions.
The connection between HRM and labour law
Regulations o f labour law are created prim arily in order to define the legal fram ew ork o f em ploym ent. A rem arkable feature o f the legal status o f em ploym ent is th at the parties can agree on th e co nten t o f this legal relation w ithin the boundaries set by the liberal regulations o f private law.11 The p u r pose o f labour law should solely be to provide a framework. However, in real life, the parties’ equal and equivalent status is skewed due to the disparity o f leverage, and so the role o f labour regulations gains im portance. Beyond providing a framework, the principal purpose o f labour law is th e creation o f a set o f guarantees that restores the equilibrium between the parties. These elements are set by labour law, however they are considered parts o f social rights. The ground for developm ent and alterations in labour law is rooted in this feature, since participants o f the labour m arket are found at the opposite sides o f em ploym ent, and thus require the interference o f labour law in their otherwise liberal legal status (of em ploym ent) on a different level and w ith a diverging purpose. A prim ary aim o f labour law is to find a balance: under stable econom ic conditions it tilts towards social security, while in gloomy labour m arket situations the liberalization o f regulations and the reduction o f guarantees become m ore dom inant. It is significant th at som e experts o f labour law claim that the evolving legislation o f the E U is the m ost im p o r tan t route to m aintaining social and labour protection in th e face o f m arket fundam entalism .12
As a result o f these achievements employees becom e a protected group, and this protection m ainly originates from the respect o f social rights. At in ternational level sim ilar processes can be observed. The question also appears at E U level, as it is obvious in the case o f flexicurity, w hich was developed as a response.
11 Gy. N adas, M iert es hogyan felelu n k a munkaviszony eseteben? A ttekinto gondolatok a munkajo-
g i kafelelosseg celja es lehetseges modozatai koreben, „M iskolci Jogi Szemle” 2014, 9, 1, 48 —56.
12 B. H epple, Fundam ental Social rights since the Lisbon treaty, “E uropean L abour Law Jo u rn al” 2011, 2, 2, 151.
W ith the introduction o f flexicurity the situation however was no t re solved, since the dem and for flexibility derives from th e fact th at require m ents o f labour law are continuously transform ing w ith changes in econom ic tren ds.13 The dem and for flexible em ploym ent on the one h an d leads to the in tro duction o f atypical forms o f em ploym ent; on th e other hand, the fram e w ork o f labour law also undergoes m odification resulting in alterations in the labour regulations th at were previously deem ed stable. Atypical forms o f em ploym ent accom m odate the requirem ent th at particular needs o f the labour m arket involving a vast num ber o f employees can be m et w ithin th e rules o f labour law, thereby reducing the risks th at the employees’ social security are exposed to. A feature o f em ploym ent is th at in order to achieve econom ic effi ciency, participants o f this legal relationship are willing to transgress the lim i tations o f labour law and find loopholes to reduce th e burdens o f regular em ploym ent. However, in this respect, the social security system - understood here as a legal protection system - appears as a barrier in th e im plem entation o f labour law rules. Flexibility is today’s ideology14 to im prove th e state o f the labour m arket and at the same tim e for satisfying the need for labour law, w hich is in accordance w ith the expectations to im prove econom ic efficiency.
W e m ust no t forget that the solutions th at offer a com petitive m ethod for the em ployer can m ean at the same tim e uncertainty an d danger for the em ployee.15 B ehind the notio n o f flexicurity lies an am bivalent situation in w hich, for th e sake o f m aintaining labour law guarantees, th e legislation al lows deviation from, and even reductions in general labour regulations.
It is often unfeasible to group elem ents o f H R m anagem ent w ithin the fram ew ork o f labour law: for instance the rotation or expansion o f the scope o f activity, un derstood as the m odification o f th e em ploym ent contract by m utual consent; or - in contrast - the job description, w hich by definition is a range o f duties set by m utual consent on the basis o f the principles o f H R m anagem ent, is acknowledged by th e labour law as the discretionary direc tive o f the employer. These differences dem onstrate the correlation between H R m anagem ent and labour law. As a general rule, H R m anagem ent operate w ithin the frameworks o f the labour regulations: the rem uneration system can be designed w ith respect to the labour regulations, or th e recruitm ent 13 Em pirical Analysis o f Legal Institutions a n d Institutional Change: M ultiple-M ethods A p proaches an d T heir A pplication to C orporate G overnance Research E C G I Law W orking Paper 2 3 8 /2 0 1 4 February 2014.
14 B. Caruso, The Concept o f Flexibility in Labour Law. The Italian Case in the European Context, U niversita degli Studi d i C atania, C atania 2004, 22.
15 R. Fahlbeck, Towards a Revolutionised Working Life. The Information Society and the Transfor
mation o f the Workplace, “International Journal o f C om parative Labour Law an d Industrial
process can be brought in harm ony w ith these rules. Nevertheless, the points o f contact in these cases are relative: the recruitm ent process precedes the em ploym ent status, w hich requires labour law regulations, thus legal rules rather aim to m aintain equal opportunities, than provide a fram ew ork for the em ployer. The perform ance assessment process lies even beyond the frontiers o f legal guidelines: labour law does no t intercede; in other words: perform ance assessment does not endanger the set o f labour law guarantees th at protect social security.16
D em ands o f H R m anagem ent were least m et in the areas o f incentives and also term ination o f work. In the sphere o f incentives th e issues to tackle are not related to obstacles set up by labour law: the m otivating power o f salary and allowances are lim ited by the laws on taxation, w hich eventually lim it employers’ ability to use them . Still, it is interesting to observe th at representative organizations o f employees refrain from dem anding different taxation o f benefits and allowances in kind, than those tools w ith social func tion. The reason behind this could be in the fact the pressure from soci ety appears in achieving measures w ith social benefits. O n th e other hand, anti-discrim ination rules, rooted in the principle o f equal opportunity, also hinder the employers’ inten tio n to pass m otivating measures th at lead to dif ferentiation am ong the employees; and o f course this k ind o f differentiation is pro h ib ited .17 These im pedim ents, in the end, result in the same outcom e as a regulation based on labour law (see term ination), even if it is n o t incom patible w ith the aims o f labour law to open windows to pass measures th at increase w ork efficiency, (e.g. perform ance-linked rem uneration, term ination o f holiday, replacem ent, etc.).
The term ination o f a legal relationship is a field in w hich the m ost es sential aspect is the existence o f guarantees. Even reforms intend ed to make labour law m ore flexible do no t in general aim to elim inate these guarantees th at protect employees. Rather, the measures taken specify atypical forms o f term ination to alternative forms o f em ploym ent.
The correlation between labour law and H R m anagem ent is also deter m ined by the support for the set o f guarantees in labour regulations em anat ing from other sources. The dem and o f H R m anagem ent, in itself, is insuf ficient to overturn and abolish labour law regulations. However, in th e event
16 Public sector em ploym ent o f the is the only sphere o f lab o u r law in H un g ary w here assess m en t perform ance emerges as a legal n orm a t all because o f the obligatory application an d the strict hierarchy in w o rk organization.
17 A lthough this is a c om m on p h en o m en o n especially betw een w om en a n d m en. See: K. Koncz,
M unkaero-piaci szegregacio nemek szerinti jellem zoi, „M unkaugyi Szemle” 2009, 53, 2, 53
dem ands from the labour m arket or the requirem ent to support the econom y arise, reforms o f the labour law m ight be anticipated. Regulations pertaining to the term ination o f w ork are evidence o f this: protection o f the employee has rem ained unaffected despite the growing dem and for higher flexibility, and even national am bitions to liberalise rules have been m et w ith obstacles in international law18. O n the contrary, atypical forms o f em ploym ent were paired w ith alternative forms o f term ination regulations. A fundam ental ob stacle for the creation o f unified regulation and protection at E U level is the lack o f a unified system o f concepts related to employees, the self-employed and even the em ploym ent relationship.19 This gap is th e result o f the protec tio n o f the legal system o f the M em ber States and the prim ary econom ic purpose o f the regulation o f labour law.
Conclusion
To summ arize, supposed correlations can be discerned between H R m an agem ent and labour law, and also between H R m anagem ent and the new processes th at influence labour law. However, the nature o f these depends on the developm ents and dem ands o f the labour m arket, an d should always be exam ined w ith a holistic approach. H R m anagem ent finds its place either w ithin or beyond the boundaries o f labour law, yet it apparently does not contradict it directly. In order to precisely m ap th e relationship, the appli cability o f individual legal instrum ents o f labour law for H R m anagem ent should be investigated separately.
Also, from another p o in t o f view, the recognition o f certain H R tools by and in the fram ework o f labour law raises interesting questions to inspect. F urtherm ore, a thorough study o f th e labour m arket processes will also lead to a better understanding o f the correlation. The outcom e m ight yield results th at are n o t new for H R m anagem ent, bu t could co ntribute to the innovation efforts aim ed at increasing flexibility in labour law. D arw in’s thesis - accord ing to w hich not the strongest or the m ost intelligent species survives, but the one w hich can change and adapt the fastest - can be the starting point. This can be im ported into labour law as follows: the labour law system th at adopts the best solutions in the shortest period o f tim e will be the “winner.”20 18 E uropean Social Charter, C h arter o f F undam ental Rights o f the E uropean U nion, conven
tions o f the International L abour O rganization (ILO).
19 T. Gyulavari, Szurke, Z o n a — A munkaviszony es a z onfoglalkoztatas kozotti jogviszonyok E u-
ropaban es Magyarorszagon, H abilitacios Ertekezes, Eotvos L orant Tudom anyegyetem , Al-
lam-es Jogtudom anyi Kar, B udapest 2010. (m anuscript closed: 0 7.06.2010), 1 4 6 -1 4 7 . 20 Z. Banko, A z atipikus munkajoviszonyok, D ialog C am pus Kiado, B udapest - Pecs 2010,
Abstrakt
Czy istnieje korelacja między zarządzaniem personelem i elastycznością zatrudnienia?
Artykuł dotyczy zarówno prawa pracy, prawa społecznego, jak i zarządzania persone lem, ponieważ analizuje związek między tymi dziedzinami. Zdaniem autorki można wyciągnąć różne wnioski dotyczące elastycznego zatrudnienia. Badania m ogą pozwo lić sformułować rozwiązania na temat elastyczności zatrudnienia i prawa pracy. Punkt wyjścia może stanowić tu teza Darwina, że to nie najsilniejszy ani najinteligentniejszy gatunek przetrwa, ale raczej ten, który umie najszybszej zmieniać się i dostosowywać do nowych warunków.
Słow a kluczowe: elastyczność i bezpieczeństwo w pracy, zarządzanie personelem, pra
