Observation (CEACR) - adopted 1993, published 80th ILC session (1993)

1. With reference to its previous observation, the Committee notes the Government's report for the period ending June 1992. It notes that the contrasted development of production and employment in the two parts of the country, as well as the problems of compiling and comparing statistics, according to the Government, justify the submission of a report in two separate sections concerning respectively the former Western Länder and the new Eastern Länder. The Committee once again hopes that the Government's next report will enable it to assess the manner in which the Convention is applied throughout the country.

2. With regard to the Western part of the country, the Government states that it experienced in 1990 and 1991 a recovery in the growth of economic activity, particularly as a result of the demand from the new Länder following monetary union. The growth in employment made it possible not only to integrate into the labour market new arrivals from the Eastern part and from outside the country, but also to continue the decrease in the unemployment rate. According to the OECD, the standardized unemployment rate fell from 4.9 per cent in 1990 to 4.3 per cent in 1991. However, it rose once again to 4.7 per cent at the end of the reporting period due to the sustained high rate of growth of the active population in a context of lower economic growth. Among the favourable developments over the reporting period, the Government refers to the reduction of around 10 per cent in the unemployment rate of young persons, which remains considerably lower than the overall rate, as well as in long-term unemployment. The Government sees in these successes a confirmation of the effectiveness of the active employment policy measures which it has implemented and reinforced, particularly in the field of training. The Committee also notes that, according to the survey supplied by the Government in reply to its request, 60 per cent of the fixed-term contracts concluded up to 1988 under the Employment Promotion Act of 1985 had been converted into contracts without limit of time. The Committee requests the Government to continue to supply information on the application of the above Act and the procedures adopted to ensure the lasting vocational integration of the persons concerned.

3. In the second part of its report, the Government supplies interesting information concerning the employment trends and employment policy implemented in the new Länder. It emphasizes that the brutal confrontation of these Länder with the market and the international division of labour revealed the unsuitability and lack of competitiveness of their economy, as well as the low productivity resulting from outmoded technologies, which explains the fact that the transition to a market economy resulted in a rapid decline in production and a contraction of around one-third in total employment. The Government considers that it was possible to contain unemployment, which the OECD estimated at over 15 per cent in 1992, at around one-third of jobs being lost, particularly as a result of the intensive application of active labour market policy measures. It states that these measures, the scope of which is broader than at first envisaged, represent three-quarters of the total expenditure on employment and have the priority objectives of combating unemployment among young persons and women through training and reintegration programmes, as well as the establishment and strengthening of employment services, which have already provided guidance to nearly 40 per cent of the active population. The Government also states that employment policy measures are an integral part of its overall policy to restructure the economy. Training measures, by taking advantage of the temporary unemployment of workers to provide them with skills which are suited to the new market conditions, contribute to achieving a lasting solution to the problem of unemployment. The Committee requests the Government to continue supplying information in order to enable it to evaluate, taking into account the objectives of the Convention, the results achieved by the various employment policy measures. It hopes that it will soon be in a position to supply for the new Länder information on the employment situation and trends which is as precise and detailed as the information available for the Western Länder.

4. Although the Government indicates that labour market policies are the centre-piece of its strategy, it nevertheless recognizes that they cannot on their own resolve the problem of unemployment in the new Länder. It supplies information on the taxation measures which have been taken to promote investment for the creation of jobs, which the Committee notes with interest. It would be grateful if the Government would supply information in its next report on the contribution of other aspects of its general economic policy, in fields such as monetary and budgetary policy, the determination of prices and wages and privatization, to the achievement of the employment objectives set out in Article 1 of the Convention. The Committee notes, in the same way as the OECD, that the process of the transition to a market economy has been accelerated by various factors, including the monetary union undertaken in 1990, but with a high cost in terms of the number of jobs lost. The Committee would be grateful if the Government would indicate the measures which have been taken in order to ensure that these effects on employment are taken into consideration when determining and implementing policies and programmes to promote economic development or other economic and social objectives (Article 2). Finally, it requests the Government to include in its next report information on the manner in which the representatives of the persons affected by the measures to be taken are consulted concerning employment policies and cooperate in their implementation (Article 3). In making these requests, the Committee has not lost sight of the unique nature of this case.