Archived - The Role of Labour Standards in a Human Capital Strategy

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[1] A note in this OECD document explains that in the French version apprentissage des adultes will be used as the exact equivalent for “adult learning” and that to simplify matters as much as possible the terms apprentissage pour adultes, éducation et formation des/pour adultes or even just formation des/pour adultes are used interchangeably. Similarly, in the English version, the terms “adult learning” and “adult education and training” are used interchangeably. (OECD 2003, 22)

[2] It is thus different from such broader spheres as education as a whole or adult education, which, although both also related to economics, also tie in with other areas of society like culture, democratic participation, politics, the family and so on. (Unesco 1997; OECD 2003)

[3] According to a number of works, there is no empirical evidence of wage cuts for workers in training being used as a means of offsetting the cost to employers, and some authors deduce that in actual fact employers pay for workers’ general education just as they do for specific education (Lin and Tremblay 2003 mention the works of Lowenstein and Spletzer 1998 to this effect) (see also Parent 1996; Lin and Tremblay 2003, p. 14, identify a number of empirical works supporting this inference). Recent works by the European Centre for the Development of Vocational Training (CEDEFOP) mention the works of Barron et al. (1999) indicating that in the United States the majority of workplace training is general in nature, which tends to minimize the importance of the distinction made by Becker. (CEDEFOP 2005, 228)

[4] However, as emphasized by Lin and Tremblay (2003), there is little empirical evidence to support this theory of fear of losing employees as a factor deterring businesses from investing in training. According to these authors, one of the few examples of this theory in action is that in Lowenstein and Spletzer (1997), who demonstrated that such uncertainty about future workforce mobility could delay the decision to invest in training among American employers.

[5] Among other things, this explains the importance placed on co-funding (funding jointly by governments, employers and workers) in a number of countries when it comes to continuing education. This co-funding takes different forms depending on the national model, which may stress either public funding or funding from the private sector, but it is clearly established as an important feature. (OECD 2003)

[6] Note that this survey covers adult workers between the ages of 25 and 64 and deals with official, structured training. This includes courses or programs related to the worker’s employment, with an instructor or trainer, leading to official recognition in the form of a diploma, certificate or the like. Care must be taken in comparing results between 1997 and 2003, because of changes in methodology between the two surveys. (See Peters 2004)

[7] We do not have any comparable data for 2003 for the OECD average.

[8] Remember that this survey is of both employers and employees, and thus yields data according to establishment (workplace) or workforce. In the case of types of training, in 1999 employers opted more for on-the-job training (54%) than for classroom training (31%), but 41% of them supported both types of training. (Turcotte et al. 2003)

[9] For example, the Quebec policy adopted in 1995 setting the mandatory training investment level at 1% of payroll was not chosen scientifically as a result of evaluations of experience in other countries or in relation to an economic optimum to be achieved. It was a compromise negotiated among the social stakeholders, given that estimates at the time put the actual average training investment in Quebec at a much lower level (despite the lack of robust data in this regard and knowing that a number of businesses were already investing much more than this 1%). This compromise among stakeholders was also based on the idea that the target of 1% was intended mainly to send workplaces a message that they had to “do better” and had to pay more attention to training than in the past. (See Charest 1999 for more information on this social dynamic among stakeholders and the Quebec government in the adoption of the legislation)

[10] See the case of the Quebec legislation presented in part 6 and in part 9 of this document for an illustration of this “train-or-pay” system.

[11] France has been experimenting with this approach since the 1971 adoption of a law requiring investment in training. Businesses are subject to two taxes: a learning tax (0.5% of payroll) and an education and training tax, which has gradually risen from 0.8% to 1.5% of payroll for businesses with at least 10 employees (0.25% for those with fewer than 10 employees). This is, in fact, a tax, in that businesses whose own training expenditures do not match the total level required by law must pay the equivalent in the form of a tax to funds, training organizations or the government. These mandatory percentages are divided into categories of expenditures: part must be spent on qualifying training within the business (0.9%), another part (0.4%) must go toward supporting co-operative education programs for youth and another part (0.2%) must be used to fund paid individual education and training leave. Such leave is managed by joint bodies funded partly (0.2%) from the mandatory 1.5% employer contribution. While on training leave, employees receive 80% to 90% of their wages (60% during the second year if the training exceeds one year or 1200 hours). The joint body reimburses the employer for the wages paid during the leave. The government also helps fund the joint bodies, among other things so that they can replace the wages for workers from businesses with fewer than 10 employees. Applications for training are managed by the joint body. (Gasskov 1998; ILO 1998)

[12] The law was phased in gradually: in 1996, it applied to businesses with a payroll of $1 million or more, in 1997 to those with a payroll of $500,000 and, finally, in 1998, to those with a payroll of over $250,000.

[13] The document produced by the Ministère de l’Emploi et de la Solidarité sociale (2005) provides a detailed analysis of the effects of the Act and the issues involved,

[14] These data may differ from reality in that employers are not required to disclose all training expenditures once they reach the threshold of 1%. Moreover, the amount in excess of the 1% may be carried forward to the following year.

[15] The percentage for the first year may have been overestimated, since employers were also able to carry forward expenditures incurred in 1995. The other categories of businesses were also allowed to do this during their first year subject to the Act, but presumably it was mainly large firms that took advantage of this possibility.

• Important Notices