While such a “social model” would likely be at odds with what is legally feasible in most EU member states, at the ECB this is made possible as a consequence of the extra-territorial nature of the organisation. By default, the labour law of the host member state is not applicable, and the ECB is granted a legislative prerogative to define its own labour law. Such a prerogative is very far reaching as it also covers social security law and workers representation rights. Surely the French MEDEF or the Italian COFINDUSTRIA would enjoy being able to become labour law makers, without having to face democratic accountability. There are however good reasons why this should not be possible in an economic democracy, and the extent and consequence of precariousness within the ECB is a good illustration of the abuses that such a concentration of power can generate.
Indeed, while precariousness could be perceived to be a good system from an employer perspective, due to the high power it exerts over its staff who will find it more difficult to oppose their instructions and demands, it definitely comes with drawbacks for the staff. The possibility to be dismissed even when performance is good is creating a stress level which explains part of the relatively high of burnout rates at the ECB (approximatively one third of the staff). Future mothers find it necessary to plan their pregnancy, as the risk of one´s contract elapsing during the maternity leave or parental leave period is quite serious – with the contract granted to another worker who will be available at that time. Access to a mortgage is also rendered more difficult.
One specific reference should be made to those whose function was outsourced, as their contract is dependent on the success of their employing company in the regular procurement procedures for their function. Should their company lose the tender, for instance because staff costs were too high compared to the other bidders, colleagues have little option but to be re-employed by the winning company, generally at the cost of a renegotiation of their employment and salary conditions. De facto, outsourcing is a way to bypass the protection granted by labour law and place the continuity of the labour relation onto the business law domain, which are much less protective of employees. As a result of this policy, a number of staff working in less attractive functions requiring lower qualifications such as catering or cleaning services are prevented from receiving the benefits normally granted to all ECB staff. As it is widely known, the existence of a large number of temporary contracts does not make it easier for the trade union to gain members, as vulnerable colleagues are reluctant to join the union before they reach adequate job security. At the same time, different colleagues working under different contract types is inherently creating division among the staff, which further weakens the bargaining position of the union and reinforces that of the employer.
Overall, the difficulties faced by temporary workers do translate into operational difficulties for the employer, as they create a situation where the incentives to reveal mistakes or challenge mistakes in managerial decisions are almost nil. Ultimately, the diversity of thinking of the organisation is affected, as the system encourages manager to surround themselves with staff who will not contradict them. Another aspect of operational risk is that workers on a temporary contract will always have to think about their next job, which is creates a risk for the organisation if key contract staff see more interesting prospects available outside.