Transforming policy approaches towards undeclared work in the European Union

Research impact case study by Professor Colin Williams

Money being transferred during a handshake

Research conducted since 2006 by Professor Colin Williams has shaped European-level policy towards undeclared work. His research has challenged the consensus view of the nature of undeclared work and his recommendations for a new joined-up policy approach has stimulated EU-level policy debate on how to tackle undeclared work, led to a motion being passed in the European Parliament, and informed a subsequent legislative initiative in the European Parliament to implement the platform that he designed. His research has also led directly to the creation of a new high-level UK body, which he chairs, to improve cooperation and discussion across government departments, and coordinate strategy on the hidden economy.

Underpinning research

For many decades, undeclared work was considered to be an exploitative form of waged employment conducted under ‘sweatshop-like’ conditions and governments adopted an eradication approach. Professor Williams has undertaken research which has led to a more balanced view of undeclared work.

Prior to joining Sheffield University Management School, and focusing on the UK, Professor Williams revealed firstly, that much undeclared work is conducted on a self-employed basis, such as by entrepreneurs starting a business who often test-trade its viability in the undeclared economy, and is thus a ‘hidden enterprise culture’, and secondly, that undeclared work is undertaken as ‘paid favours’ for family, friends, neighbours and acquaintances and is thus a sphere of active citizenship. Together, this work was deemed to constitute a large proportion of the UK undeclared economy. Williams’ argument was that a UK policy shift was consequently required from an eradication approach to one which helps such endeavour to be conducted legitimately.

Since joining the Management School in 2006, Professor Williams has validated this re-theorisation of the nature of undeclared work and need for a joined-up policy approach at a European level. As the only academic on a team (including three private sector consultancies - TNS, Regioplan and Rockwool) that won a European Commission tender in 2006 to design a survey for evaluating the nature of undeclared work in the European Union, he ensured that the survey design revealed the proportion of undeclared work conducted as waged work, self-employment and paid favours. This survey, subsequently implemented by the European Commission as a special Eurobarometer survey in early 2007 (and repeated in 2013) was the largest of its kind ever undertaken, comprising 26,659 face-to-face interviews in 27 countries. As Professor Williams reports, its finding was that 23 per cent of undeclared work in the EU-27 in 2007 was informal waged employment, 22 per cent self-employed entrepreneurial endeavour and 55 per cent paid favours.

Based on the 2007 research which revealed that the European undeclared economy is a ‘hidden enterprise culture’ and a realm where active citizenship occurs, he has called for a policy shift across Europe from an eradication approach to one which helps such endeavour be conducted legitimately.

To inform policy-makers how this joined-up policy approach could be best achieved, Professor Williams (with colleagues at Regioplan, a Dutch consultancy company) produced a 2008 report, Tackling undeclared work in the European Union, and developed a ‘knowledge bank’ of good practice policy measures in five countries, later expanded to 33 countries. This research was commissioned by the European Foundation for the Improvement of Living and Working Conditions (Eurofund).

Read more about Professor Colin Williams' recent work on the Management School blog.

Impact

Professor Williams presented the findings of the 2007 Eurobarometer survey to the European Commission’s Directorate-General Employment, Social Affairs & Equal Opportunities, and discussed the need for undeclared work to be harnessed and legitimised rather than eradicated across the EU-27. Following this, he was invited by the EU Presidency to present advice and policy recommendations on tackling undeclared work to the Employment Committee of the European Commission (ECOM), invited to join the European Commission delegation visiting Mexico, led by Commissioner Spidlia, to establish dialogue with the Mexican government on employment relations and social protection and invited by the French EU Presidency of the European Council to the governmental conference on ‘illegal employment practices’. The impact of this engagement was to enable Williams’ rethinking of the nature of undeclared work and his call for a more coordinated approach to take hold in EU policy circles, resulting in a resolution being passed in the European Parliament as well as a European Parliament legislative initiative being tabled.

In 2008, his work began to shape a European Parliament resolution. Italian MEP, Pier Antonio Panzeri, put a motion to the European Parliament for a resolution to tackle undeclared work – citing only Professor Williams’ 2008 paper. The Motion called for a shift towards enabling the formalisation of undeclared work, the development of a ‘knowledge bank’ of good practice policy measures to facilitate this shift, and for more coordinated action across governments, all recommendations in Williams’ 2008 report. It was passed by a large majority.

To implement the recommendation for the ‘knowledge bank’, Eurofound commissioned Williams (with Regioplan) to expand its coverage from five to 28 countries, and in 2012 to update and expand the coverage of the knowledge bank to also include the five EU candidate countries. This is the only source of ‘good practice’ policy ideas available to governments throughout the world and since its creation this knowledge bank of policy measures has had over 60,000 views.

Professor Williams’ work has stimulated EU legislation. In 2010, to implement the recommendation in the Panzeri resolution for more coordinated action at the EU-level, the European Commission issued a €460,000 tender to evaluate the feasibility of establishing a coordinated EU-level approach towards, and platform for, tackling undeclared work. Williams (again with Regioplan) won this contract, and following extensive consultation with senior government officials, as well as employer and employee representative organisations, throughout every member state of the EU-27, put forward a proposal for a European-level platform between labour inspectorates and other enforcement bodies, which would take the form of an Expert Network with the European Commission providing the secretariat, in order to coordinate and join-up action to tackle undeclared work across the EU-27.

In April 2012, this platform designed by Williams and his colleagues was then taken forward when the European Commission announced in its communication, Towards a job-rich recovery, that it would launch a “consultation on setting up an EU-level platform between labour inspectorates and other enforcement bodies to combat undeclared work, aimed at improving cooperation, sharing best practice and identifying common principles for inspections”. Following this, the European Commission’s 2013-14 Legislative Work Programme announced that legislation would be put before the European Parliament in 2013/14 to establish a “European platform” to tackle undeclared work which “aims for a more coherent approach by covering all the key areas influenced by undeclared work and supporting a more effective fight against undeclared work by way of improving cooperation, sharing best practice and identifying common principles”. This legislative initiative was passed by the European Parliament in January 2014.

Joining up policy at the national level has also been a benefit of Professor Williams’ research. Arising out of these European-level actions, and since Williams’ original call for joining-up policy arose out of research in a UK context, in October 2012, he decided to encourage implementation of the platform model he designed for the EU-27 at the UK national level. He founded and now Chairs the Hidden Economy Expert Group, whose mission is to facilitate greater coordination and cooperation of all stakeholders involved in tackling the hidden economy and, to date, a number of issues have been identified for joined-up strategy and action.

In establishing this Expert Group, moreover, Williams’ intention has been to ensure that the UK will have a national coordinating body on undeclared work, through which proposals can be channelled both upwards to, and downwards from, the proposed European platform.

Research collaborators

 Regioplan

Business/Organisation involvement

The European Commission (ECOM), European Parliament, Regioplan, Rockwool, TNS, the Hidden Economy Expert Group (membership includes representatives from [government] Her Majesty’s Revenue & Customs; the Home Office; the Department for Work & Pensions; the Department of Business, Innovation & Skills, Gangmasters Licensing Authority and [social partners] the Trade Union Congress; Federation of Small Businesses; the Chartered Institute of Taxation; Oxfam)

Funding

The European Commission (ECOM), the European Foundation for the Improvement of Living and Working Conditions (Eurofound), ESRC (RES-622-26-515)

Relevant publications:

Williams, C.C. (2008) “Evaluating public sector management approaches towards undeclared work in the European Union”, International Journal of Public Sector Management, Vol. 21, No. 3, pp. 285-294. doi: 10.1108/09513550810863187

Williams, C.C(2008) “A critical evaluation of public policy towards undeclared work in the European Union”, Journal of European Integration, Vol. 30, No. 2, pp. 273-290. doi: 10.1080/07036330802005490

Williams, C.C. (2009) “Tackling undeclared work in Europe: lessons from a 27-nation survey”, Policy Studies, Vol. 30, No. 2, pp. 143-62 doi: 10.1080/01442870902723667

Williams, C.C. (2011) “Reconceptualising men’s and women’s undeclared work: evidence from Europe”, Gender, Work & Organisation, Vol. 18, No. 4, pp. 415 – 437. doi: 10.1111/j.1468-0432.2009.00466.

Williams, C.C., Horlings, E. and Renooy, P. (2008) Tackling Undeclared Work in the European Union, European Foundation for the Improvement of Living and Working Conditions, Dublin (http://www.eurofound.europa.eu/pubdocs/2008/13/en/1/ef0813en.pdf).

Dekker, H., Oranje, E., Renooy, P., Rosing, F. and Williams, C.C. (2010) Joining up the fight against undeclared work in the European Union, DG Employment, Social Affairs and Equal Opportunities, Brussels [http://ec.europa.eu/social/main.jsp?catId=471&langId=en]

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