Non-permanent employment, quality of work and industrial relations
Non-permanent work (notably fixed-term contracts, temporary agency work and casual or seasonal work) forms an increasingly substantial proportion of employment across much of western Europe. This EIRO comparative study examines the extent and development of this form of employment and its regulation, focusing on collective bargaining and the implementation of the 1999 EU Directive on fixed-term work. It goes on to look at the possible effects of non-permanent employment on the quality of working life in terms of working conditions (eg pay and conditions, career opportunities, health and safety, employee participation) and the employees' overall labour market position and prospects (eg periods of employment/unemployment, social security, income). The study also outlines the views of the social partners on this issue.
'Non-permanent' employment is a feature of European labour markets that has attracted increasing attention in recent years, and has been subject to considerable legal regulation, not least at European Union level. Non-permanent employment can broadly be defined as all employment which is not based on an open-ended and continuous employment contract, but which is limited in time - the main types being employment on fixed-term contracts, temporary agency work and casual or seasonal work. This comparative study - based on the contributions of the European Industrial Relations Observatory (EIRO) national centres in the EU Member States and Norway - aims to examine the links between non-permanent employment and the 'quality' of working life, and to look at its treatment in industrial relations. The primary focus is on fixed-term employment, with more detailed information on temporary agency work available in a previous EIRO comparative study - TN9901201S.
The issue of 'quality' of work is currently high on the EU social policy agenda, and it has clear links with the topic of non-permanent employment. Quality of work is a key emphasis in the European employment strategy (EES). Under the 2001 EU Employment Guidelines, for example, the social partners are invited to 'negotiate and implement at all appropriate levels agreements to modernise the organisation of work, including flexible working arrangements, with the aim of making undertakings productive and competitive, achieving the required balance between flexibility and security, and increasing the quality of jobs. Subjects to be covered may, for example, include ... new forms of work.'
Similarly, under the European Commission's current five-year social policy agenda (EU0007266F): 'The overall focus will be the promotion of quality as the driving force for a thriving economy, more and better jobs and an inclusive society: strong partnership, dialogue and participation at all levels, access to good services and care, social protection adapted to a changing economy and society ... Such an approach means striving to achieve competitiveness, full employment and quality of work, quality in industrial relations and quality of social policy ... Quality of work includes better jobs and more balanced ways of combining working life with personal life. This is to the advantage of the individual, the economy and the society. It implies better employment policies, fair remuneration, an organisation of work adapted to the needs of both companies and individuals. It is based on high skills, fair labour standards and decent levels of occupational health and safety and includes facilitating occupational and geographical mobility.'
In June 2001, the Commission issued a Communication on Employment and social policies: a framework for investing in quality, which takes forward the social policy agenda commitment to promote quality in employment and social policy. It proposed a set of possible indicators for quality of work, which include indicators related to 'flexibility and security' and 'work organisation and work-life balance', notably the proportion of workers with flexible working arrangements. This approach was endorsed at the European Council summit meeting in Laeken in December 2001 (EU0201231N).
In this context, alongside an examination of the data on the extent and development of non-permanent employment and the EU and national regulatory context (both law and collective bargaining), this comparative study looks at the possible effects on quality of working life in terms of working conditions on the job (eg pay and conditions, career opportunities, health and safety, employee participation) and the employees' overall labour market position and prospects (eg periods of employment/unemployment, social security aspects, income). The views of the social partners on this issue are also outlined.
While the focus of this study is on non-permanent employment, the issue cannot be separated from the wider concept of 'atypical' work, so we provide in an annex to the study a brief examination of the debate over the changing labour market and the problems of defining different types of employment.
Trends in employment structure
It is widely held that European labour markets have changed dramatically in recent years and that there have been significant upheavals in the structure of employment, demonstrated by a decrease in open-ended ('permanent'), full-time 'typical' employment and an upsurge in the level of part-time work, fixed-term contracts, temporary agency work, (ostensible) self-employment and very low-paid employment - in other words, in all forms of work frequently described as 'atypical', 'contingent' or 'non-standard' employment. (See the annex at the end of this study for an examination of the concepts of 'typical' and 'atypical' employment.)
Overall structure of employment
The idea that there has been dramatic change in the overall structure of employment in the EU receives support from an analysis of the findings of the Eurostat Labour Force Surveys from 1988 and 1998, conducted by the German Institute for Employment Research (Institut for Arbeitsmarkt und Berufsforschung, IAB) (Strukturwandel der Erwerbsarbeit. Was ist eigentlich noch 'normal'?, E Hoffmann and U Walwei, IAB Kurzbericht, No. 14/2000).
This study found that the proportion of employment made up by the 'typical' (open-ended, full-time) employment relationship had decreased by some percentage points in most countries over the 10-year period examined. The exceptions were Denmark, Greece and Portugal (the latter has a low level of dependent employment overall). In the majority of countries where 'typical' employment had declined, the share of part-time work had increased. An exceptional case was Spain, where temporary/fixed-term full-time employment was more important than part-time work. In 1998, a majority of employees had a typical employment relationship in 12 of 15 EU Member States (varying between 56% in Portugal and 81% in Luxembourg). In only three countries - the Netherlands, Greece and Spain - was the share of permanent, full-time employees at around 50% or just below.
Extent of fixed-term employment
In its third European survey on working conditions, the European Foundation for the Improvement of Living and Working Conditions (EU0101292F) found that the proportion of 'permanent' employees (ie those on non-fixed-term, open-ended contracts) remained stable between 1995 and 2000, and was in both years about 82% of all employment. At the same time, the share of employment on clearly defined forms of non-permanent employment, such as fixed-term contracts and temporary agency contracts, decreased slightly between 1995 and 2000 - fixed-term contracts from 11% to 10% of employment and temporary agency contracts from 15% to 12%. Only the share of employees describing their employment status vaguely as 'other' had increased, from 2% to 4%.
According to the 2000 Eurostat labour force survey, 13.4% of employees in the EU had an employment contract of limited duration. Compared with the figures for 1983, this represented a significant increase in fixed-term employment over the 1980s and 1990s (though several countries - Denmark, Greece and Ireland - saw fixed-term employment fall over this period).
*1995 figure; ** excluding Austria; *** excluding Austria 1983.
Sources: Eurostat labour force survey and EIRO.
In all countries, the share of women with a fixed-term contract is higher than the share of men - see table 2 below. Taking into account all forms of non-permanent employment, the gender difference becomes even more obvious: the 2000 EIRO annual update on gender issues (TN0103201U) found that across the EU women were nearly 30% more likely to work on a fixed-term/temporary/casual basis than men in 1999. Only in France, Germany and Portugal is the share of men slightly higher than of women, considering all forms of non-permanent employment.
Sources: Eurostat labour force survey; EIRO.
By age group, the rate of fixed-term employment is high among young people aged between 15-24 years and 25-49 years. While the rate for men and women aged 15-24 is the same, the rate is higher for women in the 25-49 age group, perhaps because this is the age when many women are having children. A recent German study found that the youngest generation of workers was six times more likely to have a fixed-term employment contract than the oldest generation in the workforce. Non-permanent employment occurs across all levels of qualification.
Although there has been a trend towards the greater use of non-permanent employment across a variety of sectors, this trend is particularly evident in the expanding service sector. In the EU, over 66% of all fixed-term employment contracts are in the service sector, covering retail, catering, transport, finance and the public sector.
Non-permanent employment in Spain
There is an exceptional situation in Spain, where the share of all employees with a fixed-term contract increased by 16.5 percentage points over 1983-2000 to stand at around 32% - the highest level in Europe. In June 2001, for example, only 9.47% of all new employment contracts signed were permanent, the rest being non-permanent contracts - indicating the high employee turnover among such workers. Spain's strict legal protection against dismissals for 'permanent' employees has been one reason why companies more make such extensive use of fixed-term employment and temporary agency work. There is a wide variety of different types of non-permanent contracts, including the following.
The EU Directive on fixed-term work
With non-standard forms of work, such as part-time and non-permanent employment, having become more common since the 1980s, the European-level social partners were consulted by the European Commission in 1995 on the creation of a European framework of legislation to protect the rights of workers on 'atypical' contracts. This process resulted in agreements between the central European-level social partners - the Union of Industrial and Employers' Confederations of Europe (UNICE), the European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP) and the European Trade Union Confederation (ETUC) - on part-time work in 1997 (EU9706131F) and on fixed-term work in 1999. Both agreements were subsequently implemented via EU Directives. The latter Directive is of particular relevance here.
In January 1999, UNICE, CEEP and ETUC reached a draft framework agreement on the rights of workers on fixed-term contracts (EU9901147F), which was officially signed in March 1999 (EU9903162N) and implemented through an EU Council Directive (1999/70/EC) on 28 July 1999 (EU9907181F). The agreement/Directive aims to 'improve the quality of fixed-term work by ensuring the application of the principle of non-discrimination', and to 'establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships'.
A fixed-term worker is defined as a person 'having an employment contract or relationship entered into directly between an employer and a worker where the end of the employment contract or relationship is determined by conditions such as reaching a specific date, completing a specific task, or the occurrence of a specific event'.
In respect of employment conditions, fixed-term workers must not be treated in a less favourable manner than comparable permanent workers solely because they have a fixed-term contract or relationship, unless different treatment is justified on objective grounds. To prevent abuse arising from the use of successive fixed-term employment contracts or relationships, Member States and/or the social partners must introduce one or more of the following measures:
- objective reasons justifying the renewal of such contracts or relationships;
- the maximum total duration of successive fixed-term employment contracts or relationships; or
- the number of renewals of such contracts or relationships.
Employers must inform fixed-term workers about vacancies which become available in the undertaking or establishment, to ensure that they have the same opportunity to secure permanent positions as other workers. As far as possible, employers should facilitate access by fixed-term workers to appropriate training opportunities. Fixed-term workers must be taken into consideration in calculating the threshold above which statutory workers' representative bodies may be constituted in undertakings. As far as possible, employers should give consideration to the provision of appropriate information to workers' representative bodies about fixed-term work in the undertaking.
EU Member States were to transpose the Directive into national law by 10 July 2001 (with a possible further one year permitted to take account of special difficulties or implementation by a collective agreement).
Talks on a similar agreement on the subject of temporary agency work broke down in May 2001 (EU0106215N) and in March 2002 the Commission issued a proposal for a Directive on working conditions for temporary agency workers (EU0204205F). This proposal aims to improve the quality of temporary agency work by ensuring that the principle of non-discrimination is applied to temporary agency workers and to establish a suitable framework for the use of temporary agency work to contribute to the smooth functioning of the labour market. See the earlier EIRO comparative study (TN9901249S) for more detail on the current regulation of temporary agency work, which is only touched on in the current study.
Implementing the Directive
Up until June 2002, the fixed-terrm work Directive had been transposed through new legislative provisions in seven of the 16 EU and European Economic Area (EEA) Member States examined (Finland, France, Germany, Italy, the Netherlands, Spain and Sweden), with the original July 2001 deadline being met in only a few cases. Portugal also appears to have implemented the Directive at least partially. The implementation process is relatively well advanced in five further countries (Belgium, Denmark, Ireland, Norway and the UK), though Ireland and the UK at least are due to miss even the extended July 2002 transposition deadline. In Austria and Luxembourg, the government takes the view that no implementing measures are required, as current national provisions already meet the Directive's requirements (though this view is not universally shared in Austria). In Greece, there appears to have been no substantive moves towards transposition. Table 3 below gives outlines the state of transposition in each country, with brief details of the main new provisions required to comply with the Directive.
|Country||Implementation||Main new provisions|
|Austria||Not yet implemented. The Ministry of Economic Affairs and Labour reportedly sees no need to implement the Directive at present, as current legislation and case law are in line with its provisions.||Employee representative organisations do not share the view that current regulations meet the Directive's requirements. Notably, they point to a loophole that allows repeated renewals of fixed-term contracts (despite general strict regulation) at the Austrian Broadcasting Corporation (ORF).|
|Belgium||Not yet implemented. In March 2001, the bipartite National Labour Council (Conseil National du Travail/Nationale Arbeidsraad, CNT/NAR) adopted a unanimous opinion (No. 1342) on the transposition of the Directive. A bill dealing with transposition, based on the CNT/NAR opinion, was submitted to parliament in February 2002 (1653/001), following the delivery of an opinion by the Council of State (Conseil d'Etat/Raad van State).||The proposed legislation expressly introduces the principle of non-discrimination between fixed-term and permanent workers into Belgian law, and obliges employers to inform fixed-term workers of open-ended vacancies. Current law is considered to meet the Directive's requirements in other areas.|
|Denmark||Not implemented yet - expected by June 2002. Implementation will be through collective agreements, extended to areas not covered by collective bargaining through supplementary legislation (as was the case, for example, for the part-time work Directive - DK0106123N) to ensure that the Directive's provisions cover the whole workforce (only 85% is covered by collective agreements).||Main change required is an express statement of the principle of non-discrimination between fixed-term and permanent workers.|
|Finland||New Employment Contracts Act which came into force in June 2001 (FI0107193F) implemented most of Directive's provisions.||The legislation lays down: the grounds for fixed-term contracts; rules on unjustified successive fixed-term contracts; and various non-discrimination measures (covering matters such as probationary periods, benefits, written statements of terms and conditions, sick pay, family leave, holiday pay, termination of contract and notification of vacancies).|
|France||Implemented by the 'social modernisation' law of January 2002 (FR0201102F).||The legislation covers: allowing employees to break fixed-term contracts before they end if they have found a permanent job; the minimum period between the use of fixed-term contracts for the same position; pay parity between fixed-term and permanent workers; provision of a written contract; and informing fixed-term workers about vacancies.|
|Germany||Implemented by law on part-time work and fixed-term employment relationships, which came into force in January 2001 (DE0011293F).||The legislation covers: the principle of equal treatment between fixed-term and permanent workers; the permitted grounds for fixed-term contracts; the duration of fixed-term contracts; less stringent rules for employees over the age of 58; informing fixed-term employees about vacancies; fixed-term workers' participation in training measures; and information for employee representatives about level of fixed-term-employment relationships in company.|
|Greece||Not implemented yet.||The main changes required relate to measures to prevent abuse of fixed-term contracts - such as grounds justifying the renewal of contracts, the maximum total duration of successive fixed-term contracts, and the number of renewals).|
|Ireland||Not implemented yet. Consultation with social partners has occurred (IE0202202F), but progress delayed by May 2002 general election. Transposition now expected in late 2002.||What changes, if any, are required to current provisions is not yet clear.|
|Italy||In May 2001, a number of social partner organisations (minus the Cgil union confederation) signed a joint statement on the transposition of the Directive (IT0105282F). Government transposed Directive through legislative decree no. 368 of 6 September 2001, which followed the lines of the social partners' statement.||The new legislation generally reduces the constraints formerly imposed on fixed-term employment and makes its use more flexible for firms. It: eliminates the previous explicit listing, by law or collective bargaining, of the specific circumstances in which the use of fixed-term employment was legal (now stating only that fixed-term contracts may be used 'for technical, productive and organisational reasons or in substitution for absent personnel'); requires employers to specify in writing the reasons for using fixed-term work for each contract; stipulates when fixed-term work may not be used; limits the possibilities of renewing contracts; confirms the principle of non-discrimination against fixed-term workers; introduces some training rights for fixed-term workers; and defines the role of collective bargaining in regulating fixed-term work.|
|Luxembourg||No implementing measures regarded as necessary, as current legislation is thought to meet and exceed Directive's provisions.||-|
|Netherlands||Implemented by amendments to the 1998 Flexibility and Security Act in late 2001.||The legislation sets out the principle of equal treatment between fixed-term and permanent workers, and requires employers to inform fixed-term workers about vacancies.|
|Norway||Not implemented yet - due by July 2002.||According to the Ministry of Labour, only a minor adjustment of the Act Regarding Worker Protection and Work Environment (AML) is required, obliging employers to inform fixed-term workers about vacancies.|
|Portugal||According to the Ministry of Employment and Solidarity, the Directive has not yet been implemented. However, law no. 18/2001, which came into force in August 2001, on fixed-term contracts covers some of its provisions (PT0108160F).||The 2001 legislation lays down: the permitted grounds for fixed-term contracts; rules on successive fixed-term contracts; rules on compensation for termination of contracts; and gives workers' representatives information rights. The nature of further changes required is not known.|
|Spain||Implemented by Royal Decree 5/2001 of 2 March 2001.||The legislation: lays down the principle of equal treatment and rights for fixed-term workers; obliges employers to inform fixed-term workers of vacancies; requires collective agreements to provide measures to facilitate effective access to continuing vocational training for fixed-term workers; and allows sector- and company-level collective agreements to specify the type of work for which fixed-term contracts may be used.|
|Sweden||Implemented by 2002 Act on prohibition of discrimination against part-time employees and employees with fixed-term contracts (SE0106104N), which comes into force in July 2002.||The legislation bans discrimination against fixed-term workers.|
|UK||Not implemented yet. The Employment Act (UK0112104N) which received royal assent on 8 July 2002 gives the government the power to make regulations to implement the Directive. The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 were subsequently laid before parliament and are due to come into force on 1 October 2002. The Employment Act also includes primary legislation to prevent pay and pensions discrimination against fixed-term employees, as this is not covered by the Directive itself.||The main provisions of the forthcoming Regulations are that: fixed-term employees should not be treated less favourably than comparable permanent employees on the grounds that they are fixed-term employees, unless this is objectively justified; and the use of fixed-term contracts will be limited to four years, unless the use of further fixed-term contracts is justified on objective grounds.|
The impact of the Directive's implementation varies considerably between different Member States. This depends on the previous state of national regulations on fixed-term work. As mentioned above, the Directive has had no impact in Austria and Luxembourg, as they consider that their current provisions in this area meet or exceed the Directive's requirements.
The changes to national regulations made (or due to be made) to comply with the Directive are relatively minor in countries such as Belgium, Denmark, Germany, the Netherlands and Norway, and rather more substantial in countries such as Finland, France, Greece, Spain and Sweden. In a number of countries, the legislation implementing the Directive also covers a number of other aspects of fixed-term work not dealt with in the Directive (as in Italy and Spain, for example). The impact will arguably be greatest in countries which previously had little or no specific regulation of fixed-term work, notably the UK.
In the UK, there are currently no legislative restrictions on the reasons for the use of fixed-term contracts, their length or whether (and the number of times) they are renewable, nor on equal treatment for fixed-term employees. Indeed, the government postponed implementation of the Directive in 2001, stating that the consultation exercise on its draft measures 'revealed particular problems with implementation in the UK' (UK0108141N). The Regulations which were eventually drawn up and are due to come into force in October 2002 are wide-ranging, covering a variety of issues, including equal treatment for fixed-term employees (including on pay and pensions, which exceeds the Directive's requirements) and measure to prevent abuse of successive fixed-term contracts. Ireland also has little specific legislation on fixed-term work, so its implementing measures - once the details emerge - are also likely to be quite extensive.
While implementation of the Directive has been (or will be) mainly effected through legislation, the social partners have played an important role in some countries. Both the Belgian and Italian legislation is based on views jointly expressed by the social partners, while collective agreements play the main role in implementation in Denmark (as is traditionally the case), though with supplementary legislation to cover those workers not subject to collective agreements. Swedish trade unions would also have preferred implementation through collective agreements instead of legislation, but this did not occur.
Discrimination and 'employment risks'
The implementation of the fixed-term work Directive should ensure a basic level of protection and rights for fixed-term employees across Europe, and prevent discrimination against them in some areas. The proposed Directive on temporary agency work, if adopted, should do the same for agency workers. However, the context of these changes is one in which workers in non-permanent employment have traditionally been subject to a degree of discrimination, and in which such employment has negative implications for their career prospects and living conditions.
Non-permanent employment may provide an opportunity to (re-)enter the labour market and acquire on-the-job experience for young employees with little work experience, low-skilled workers and unemployed people. However, if the non-permanent employment does not become employment on an open-ended contract, in some countries those employees may be excluded from (or receive less coverage by) various areas of employment and social protection - eg (legal) protection against dismissal (as the employment relationship ends with the term of the contract), company pension funds, entitlement to state pensions, unemployment benefits and social welfare in general. Moreover, career opportunities may be restricted, as non-permanent employees may be able neither to demonstrate their employability for a longer period nor participate in further training measures on the job. They therefore risk becoming part of the fringe 'peripheral' workforce. On the individual level, researchers have claimed that non-permanent employment leads not only to greater insecurity in terms of future employment perspectives, as it is often followed by periods of unemployment, but also to unstable social relationships and commitments (see, for example, The corrosion of character, R Sennett, Norton, 1998).
A further impact of non-permanent employment is highlighted by research into flexibility by the European Foundation for the Improvement of Living and Working Conditions. This 'indicates that external and quantitative flexibility [referring to employment status, eg open-ended or fixed-term contract] tend to have a negative impact on working conditions (although not necessarily simultaneously on both 'conditions of work' and 'conditions of employment')'. 'Conditions of work', are defined as the 'everyday practical, organisational and environmental conditions of the workplace' and 'conditions of employment' as 'the rules and status under which people are employed, trained and paid'.
Below, we examine the position of non-permanent workers in a number of areas of possible discrimination.
General employment protection law
In most countries it can be stated that non-permanent workers are, in law, treated relatively equally with permanent workers in many areas of employment protection and rights (though see below for exceptions), where they are considered by law to be employees. However, in a number of countries, the nature of non-permanent employment is such that the workers involved may be deprived fully or partly or various elements of protection and rights. This is most notably the case, at least at present, in Ireland and the UK, though specific cases also occur in other countries.
In Ireland, employment legislation has provided all employees with a minimum level of protection sometimes referred to as a 'floor of rights'. The legislation has not explicitly distinguished between permanent and temporary employees (employees are considered temporary if their position is not permanent - ie employment on a fixed term contract, employment based on the duration of task, seasonal or casual employment, when the employee is on probation and temporary agency work). However, many aspects of employment protection legislation still exclude non-permanent workers because they do not fulfil certain prerequisites for eligibility.
In the UK, where there is no statutory definition of either 'temporary' or 'normal' work, non-permanent workers can fall outside provisions in labour law for employment protection and minimum entitlements for two reasons. The first is that employment protection and several other employment rights are currently restricted by requirements to fulfil a minimum qualifying period of continuous employment with the same employer. The second is that such rights are conferred only on workers who are 'employees' and (in most instances) not on those who are 'self-employed'. Hence, in practice many non-permanent workers lack the main forms of employment protection, such as the right to claim unfair dismissal (see below) and the right to statutory redundancy pay (for both of which there is a 12-month qualification period of continuous employment, recently reduced from 24 months) and the right to contractual benefits. According to their length of service, temporary workers may not qualify for statutory sick pay (13 weeks) or statutory maternity pay (26 weeks). Following a European Court of Justice judgment, the government recently amended the 1998 Working Time Regulations so that the previous qualifying period of 13 weeks' service for paid holiday entitlement has been removed altogether (UK0110105N).
Aside from considerations of length of service, temporary workers in the UK are not entitled to such rights if they do not have a contract of employment with their 'employer'. A key issue in British employment law is whether a person is an 'employee' (engaged under an 'employment contract' or 'contract of service') or 'self-employed' (engaged under a 'contract for services'). Varying definitions in different legislation, and conflicting court judgments, have made it complicated to establish in law whether some non-permanent workers are 'employees'. To address this problem, some recent legislation, including that implementing the national minimum wage (UK9904196F) and transposing the EU working time Directive (UK9810154F), has accorded protection to 'workers', a term which is defined more widely than 'employees'. Non-permanent workers are, therefore, more likely to enjoy protection from minimum wage and working time legislation than protection against unfair dismissal.
The legal status of temporary agency workers in the UK is also complicated. The courts use a 'multiple factor' test to determine whether the working relationship constitutes a contract of employment, and if so, whether with the customer organisation or the agency is the employer. In 2001, the government published a final draft of new measures which would confirm that as a rule workers will have their contractual relationship, either employed or self-employed, with the agency.
In Denmark there are considered to be two groups of fixed-term employees, those with contracts of under three months (midlertidig ansaettelse) and those with contracts of over three months (tidsbegraenset ansaettelse). While the latter are entitled to all forms of protection provided by the relevant collective agreements and, in the case of white-collar salaried employees, by the Salaried Employees Act, the former are not covered by this item of legislation, which provides for salaried employees to have full pay during sickness and holidays, seniority-related dismissal notice periods, redundancy payments, objective grounds for dismissal etc.
Other countries also make a distinction between non-permanent workers who are considered as employees (notably those with a fixed-term contract) and those in other forms of non-permanent employment who are not clearly employees, such as self-employed people, 'economically dependent' workers (those who are formally self-employed but depend on a single employer for their income - TN0205101S) and freelancers. Employees with a fixed-term contract in general have comparable legal protection with employees on open-ended contracts, in many areas, but the latter group of self-employed or freelance workers has little or no protection.
Casual workers are often in a different position to that of more established non-permanent workers. In Denmark, the loose nature of such relationships means that the employees' rights and protection are as 'casual' as the work.. In the UK, the question of whether an 'employment contract' exists in the case of casual workers has been the subject of interpretation by the courts, where decisions seem to hinge on the extent to which there is a continuing relationship between the worker concerned and the employer. Implicitly, court decisions have had the effect of according 'employee' status to 'regular' casual workers, but not to more 'casual' casual workers.
Legal protection related to dismissal
In most countries, the abovementioned distinction between non-permanent workers who are considered as employees and those in other forms of non-permanent employment who are not clearly employees (such as the self-employed, 'economically dependent' workers and freelancers) applies in terms of dismissal protection. Employees with a fixed-term contract generally come under the same legal protection against dismissals as employees on open-ended contracts, in terms of trial periods or dismissal during the contract period, along with dismissal protection relating to sickness and childbirth - though of course they are not protected against losing their job when their contract expires. However, the latter group of self-employed or freelance workers have little or no protection as their employment relationship is directly based on provision of a service, and the employer may often stop using their work without a period of notice.
The rules relating to dismissal during the term of a fixed-term contract differ in some respects - notably unfair dismissal claims and compensation for dismissal - from those on the dismissal of employees on open-ended contracts in a number of countries. In Italy, the area of difference relates to dismissals without 'just cause'. In such cases, fixed-term workers can obtain only compensation (generally equal to the pay for the residual period of work stated in the fixed-term contract), and not reinstatement. In Luxembourg, employees on fixed-term contracts qualify for the same dismissal compensation as employees on open-ended contracts, except that this compensation equals at a maximum the amount of pay due for the remaining period, and cannot exceed what the employee would be entitled to if on an open-ended contract. In Belgium, unfair dismissal claims may be made only in respect of open-ended contracts, and do not apply to fixed-term contracts. In the UK and Denmark (see above under 'General employment protection law'), the application of some aspects of dismissals law is dependent on the duration of the employment.
In Ireland, since 1993 the Rights Commissioners/Employment Appeals Tribunal have been able to examine any second or subsequent temporary/fixed-term contract to determine whether the nature of the contract is designed to avoid liability under the unfair dismissals legislation, and in this situation a claim for unfair dismissal can be pursued (previously, such contracts could be repeatedly renewed by employers without any obligations). As a result, employer abuse of temporary contracts has been curbed somewhat.
In Spain, until 2001 only two types of temporary contracts included financial compensation for dismissal. However, most temporary contracts now attract such compensation, though this is equivalent to eight days' pay per year of service, compared with 33 days' pay per year for workers on open-ended contracts. The length of notice of termination of employment for workers on temporary contracts is only 15 days (compared with 30 days for those on open-ended contracts), and then only if employees have worked for more than one year with the same company. Otherwise, they may be given no notice at all of dismissal, leading to a high level of insecurity among such employees, as they do not know whether the contract will be prolonged or end at the agreed time.
The situation is different in Norway, where non-permanent employees who have been employed for more than one year are entitled to a written notification of the exact date their employment is to end, no later than a month prior to this date. If no such notification is given, the employee has the right to stay on until one month after such notification has been given.
In France, employees on fixed-term contracts are entitled, at the end of the contract, to a 'precariousness allowance' (worth 6% of the total gross pay received during the contract). However, this does not apply to work on a seasonal contract (a particular type of contract existing only in six industries recognised as seasonal by law - forestry, leisure and holiday centres, professional sport, tourism, agricultural work, and casinos and gaming establishments), though since 1999 a pilot measure has entitled regular seasonal workers to a special compensation scheme, less advantageous than the general scheme. Seasonality is also a factor in German dismissals law, with the legal protection against dismissals not applying to seasonal companies and (and small companies with five or fewer employees).
There are some cases of particular protection or benefits for fixed-term contract workers relating to the premature termination of their employment contract before its term. In Sweden, non-permanent employee may not be dismissed during the contract period, except summary dismissal on grounds of gross neglect of obligations to the employer. In Belgium, employers may bring a fixed-term contract to a premature conclusion only by paying compensation up to a maximum of double what would have been owed if the contract had reached its term - the termination of a relatively lengthy fixed-term contract can thus be more attractive for a dismissed employee in this respect than an indefinite contract
In practice - notwithstanding the provisions of the EU fixed-term work Directive and national legislation in some countries - training opportunities for non-permanent workers seem be less than for those on open-ended contracts. This is widely reported, with specific examples including the following:
- in Finland, according to a 2001 survey, only 27% of fixed-term workers had participated in training during the previous 12 months, compared with 50% of permanent workers. The average annual duration of training for fixed-term workers was 4.4 days, compared with 7.9 days for permanent workers;
- a recent German study found that employees in 'precarious' employment relationships, including fixed-term employment, make less use of training measures than the average of employees;
- in Greece, enterprises reportedly often exclude temporary staff from vocational training programmes. The education and training level of such workers thus tends to remain low, with the effect that they often alternate between temporary employment and unemployment;
- in Spain, 90% of workers participating in training measures offered by companies or subsidised by the Foundation for Continuing Training (FundaciÃ³n para la FormaciÃ³n Continua, FORCEM) - now succeeded by the Foundation for Training in Employment (FundaciÃ³n Tripartita para la FormaciÃ³n en el Empleo) (ES0109202F) - have an open-ended contract, and research indicates that temporary workers come up against practical restrictions in gaining access to company training plans; and
- information produced for a group currently examining Swedish labour law (SE0008158N) indicates that training opportunities for non-permanent workers may be two or three times less than for those on open-ended contracts.
The training opportunities that do exist for non-permanent workers seem to depend on the kind of work they are employed for and on the duration of their employment, with (as reported from Denmark and Sweden, for example) training more likely for those on longer contracts. UK research indicates that fixed-term contract workers in general are as likely as permanent employees to have benefited from training and development activities, but short-term temporary workers are much less likely to have done so.
In a number of countries, specific training regulations for temporary agency workers may put them in a better position than non-permanent workers in general. Collective agreements and/or laws on temporary agency work (as in France, Italy, the Netherlands and Portugal) often include regulations on training, such as entitling employees to an assessment of their training needs, or obliging temporary work agencies to spend a fixed share of their total paybill on the training of employees.
With regard to the qualification and skill levels of non-permanent jobs, the evidence is mixed. At one extreme, in Ireland non-permanent employment is often associated with jobs with lower qualification standards. At the other end of the scale, in Denmark non-permanent employment is not dependent on qualification levels, being as widespread among professionals (eg researchers and consultants), for example, as among clerical workers. This is generally also the case in Norway, though the 25% or so of more 'casual' non-permanent workers tend to be in jobs at a lower qualification level (eg students working alongside their studies in sectors such as hotels and restaurants). Similarly, in the UK, research suggests that the jobs in which fixed-term contract workers are found are, on average, no less skilled than those of permanent employees - and though there is a tendency for short-term temporary workers to be in less skilled jobs, this is not very marked. In the Netherlands, although the share of low-skilled workers among 'flexible workers' seems to be higher than among workers on open-ended contract, this varies between the different types of flexible work: temporary agency workers tend to be low skilled, whereas most 'on-call' workers and employees 'without defined employment duration' are more likely to have an overall higher skill level.
Differences in pay
Overall, it seems that the basic hourly or monthly pay of workers on fixed-term contracts differs little from that of those on open-ended contracts - indeed in some countries (such as Italy or Luxembourg), this is guaranteed by law. There are a few exceptions - several of the types of temporary contract used in Spain provide for a lower level of pay, linked to training, while in Ireland non-permanent employment is frequently associated with lower rates of pay (often close to the national minimum wage level).
However, in reality, it appears that the earnings of fixed-term workers do tend to be lower in most countries, mainly because they do not meet - partially or fully - the eligibility requirements for various additional payments, such as those linked to length of service. This is widely reported from countries such as Belgium, Finland, France and Greece and Norway. To take the example of Belgium, research indicates that non-permanent workers are less likely than their 'permanent' colleagues to receive the '13th month' salary payment, special bonuses and meal vouchers. The matter is more regulated in Italy, where the wage levels of fixed-term and temporary agency workers must be at least the same as those granted to permanent employees in the same job position and with the same level of qualification. Fixed pay elements which are calculated on a yearly basis (such as the'13th month' salary payment and production bonus) are paid to non-permanent employees proportionally to the period they have been working (according to the 'pro rata temporis' principle). However, it is left to collective bargaining (essentially at company-level) to determine if and how non-permanent employees may have access to variable performance-related bonuses.
Furthermore, lower average earnings for fixed-term workers may result from the fact that they are often young employees with less work experience and sometimes lower qualifications than the average permanent employee - this is reported, for example, from Spain.
France is a rare example of a country where there are special pay provisions favouring non-permanent employees, who receive financial compensation for the precarious nature of the employment status (see above under 'Legal protection related to dismissal'). This 'precariousness allowance' is 10% of total gross pay for temporary agency workers and 6% for employees with a fixed-term contract (seasonal workers are generally not entitled to the payment).
Other employment conditions
In terms of other conditions of employment - such as paid holidays, working time and sick pay - a similar picture applies to that for pay. Generally, legal or collectively agreed entitlements do not distinguish between fixed-term and permanent staff - except that entitlement for the latter is often pro rata - but fixed-term staff are likely to suffer where length of service is a factor in eligibility. To take the example of holidays, in Greece a prerequisite for the right to annual paid leave is continuous employment with the same employer for 12 months - this excludes most non-permanent employees. In Norway, although employees are entitled to leave, paid holidays depend on income in the previous year. In countries where conditions of employment are less regulated and more at the employers' discretion, discrimination against non-permanent staff may currently occur. For example, in Ireland, terms and conditions of employment tend to be poorer for non-permanent workers (many of whom are female), with research indicating that they are less likely to be entitled to sick pay, holiday pay etc.
The effect of non-permanent employment on people's pension coverage and entitlements depends on the national social security system. With regard to basic state pensions schemes, these generally do not distinguish between non-permanent employees and others, but there is a distinction between countries where entitlement depends on completion of a certain number of years of employment and contributions, or earnings during such employment, and those where it is independent of employment. In the former case, non-permanent workers may suffer some disadvantage where their periods of employment are interspersed with periods out of work.
Countries where basic state pension entitlement is independent of employment history include Denmark and the Netherlands. Countries where state pension entitlement is linked to periods of work include Belgium, Germany, Italy, Luxembourg, Norway and Spain. The new Swedish state pension system is based on the level of individuals' life income, with a minimum guaranteed pension if the person concerned has not earned enough. The problems of linking pensions to employment history are illustrated by the case of Spain. Here, young people are tending to complete their education later and, due to the labour market situation, finding it difficult to obtain their first job. Pension contributions thus tend to begin to be paid at a later age. In the early years of working life (20 to 35), it is now most common for people to alternate between employment and unemployment, while a large number of workers lose their jobs in their 50s, become long-term unemployed or take pre-retirement. Furthermore, the government is now requiring more years of contributions (15) in order to pay a pension, so it is becoming increasingly difficult to obtain a reasonable pension.
With regard to pension provision over and above the basic state scheme - state supplementary schemes, occupational schemes and private schemes - non-permanent work may also be disadvantageous. In some countries, such as Denmark, non-permanent employees are included in such schemes in the same way as those on open-ended contracts, with problems for the former arising from possible shorter contribution periods. However, in other countries, non-permanent workers may be excluded fully or partly from additional pensions provision based on agreements or employer initiative. For example:
- in Ireland, under 10% of non-permanent workers are covered by occupational pension schemes (which are not obligatory);
- the Netherlands' various forms of non-obligatory occupational pension schemes often have rules which exclude certain employees, for example those who have not completed one year's service. However, willingness to give 'flexible workers' access to Dutch occupational pension schemes is increasing, with the one-year qualifying period becoming less common (and a separate pension fund set up for temporary agency workers employed on a permanent basis);
- in Norway, while in principle there are no differences between temporary and permanent employees with regards to occupational pension schemes (which have to cover all employees in a company in other to be tax deductible), employees who change jobs after less than a year lose the money set aside on their behalf in a scheme;
- in Spain, payments to supplementary funds offered by employers do not tend to be applied to non-permanent workers, and even if they are, the rights are lost when the employment relationship ends;
- some Swedish collectively agreed supplementary pensions have traditionally excluded non-permanent workers. Given the EU Directive on fixed-term work, these have been, or are being, renegotiated to end this discrimination (SE0201112N and SE0104192N); and
- in the UK, considerable differences remain between permanent and temporary employees in terms of occupational pension provision.
As with pensions, where unemployment insurance schemes require a certain period of employment and contributions to achieve entitlement to benefit, this may disadvantage non-permanent workers. This is commonly the case (as, for example, in Belgium, Germany, Italy, Luxembourg, the Netherlands). However, in Denmark, entitlement to unemployment benefits is based solely on membership of an Unemployment Insurance Fund, which is open equally to non-permanent and permanent employees. Similarly, in Sweden entitlement to unemployment benefits requires only previous employment, irrespective of its type.
Health and safety
With regard to the health and safety risks encountered by non-permanent workers, the European Foundation's third European survey on working conditions (see above) found that 'the emerging trend of 1995 of a link between temporary work and fixed-term contracts and poor working conditions continued in 2000. In total, 51% of temporary workers reported working in painful conditions (compared with 47% for all workers) and 35% stated that they were subject to noise (compared with 29% for all workers).' However, at national level, conclusive statistics on links between increased health and safety risks and non-permanent employment are scarce, though a possible link is reported from countries such as Belgium, Finland, Ireland, the Netherlands, Spain and Sweden. Examples of evidence of such a link include the following:
- Belgian statistics reveal that the incidence of work-related accidents among temporary agency workers is much higher than average
- Finnish research indicates that health and safety risks decrease significantly as the duration of employment increases (suggesting problems for employees employed short term);
- in the Netherlands, research has found that temporary agency workers: have working conditions with higher than average noise; use on average more physical strength than is usual in open-ended employment; have relatively high levels of sickness absence; are more more likely than average to claim WAO disability benefits (in particular young employees); and, when claiming disability benefits, are twice as likely than average to report psychological complaints and 25% more likely to report physical complaints; and
- some Spanish studies point to a clear relationship between 'unstable' employment and accidents as a result of pressure, stress, inexperience, less training etc (ES0009106N). According to a 2000 study by the Trade Union Confederation of Workers' Commissions (Comisiones Obreras, CC.OO), between 1993 and 1998 there were four times more accidents among non-permanent workers than among permanent workers, 'which indicates that in all cases temporary workers are more liable to suffer industrial accidents than permanent workers'. This was particularly true in the construction sector, where the number of accidents in 1998 was 5.27 times higher among temporary workers, compared with 3.05 times higher in industry and 3.25 times higher in services. The reasons put forward for this are the type of tasks performed by temporary workers, and a lower knowledge of the risks and protective measures due to lack of training and experience.
A problem in this area is that it is hard to distinguish between sectoral/occupational differences and differences in employment status - as in France, where the majority of temporary agency workers are manual workers, in sectors such as construction and manufacturing, where work-related injuries are more widespread than in other sectors.
Employee participation and representation
In terms of non-permanent employees' access to employee participation and representation structures based on legislation or collective agreements, in most countries there are formally no restrictions. However, there are in some cases service-related conditions for acting as employee or trade union representatives or standing and/or voting in elections, which may affect the representation of non-permanent workers. For example:
- in Luxembourg, employees on fixed-term contracts have the same active and passive voting rights in elections of representatives as employees on open-ended contracts, but the right to vote is dependent on six months' service in the company, and the right to stand as candidates requires 12 months' service;
- similarly, in the Netherlands, the works councils legislation provides for representation of non-permanent workers, but one year's service is required to be elected to a works council, and six months' service to vote in works councils elections (these periods can be altered by the works councils themselves);
- in Norway, non-permanent employees have the same rights as permanent employees when it comes to voting and standing for elections of works council members and employee representatives on company boards. However, the right to vote is limited to employees who have been employed for at least three months before the ballots take place, and the right to stand for election to employees who have at least one year's service in the company. Elected safety officers must have at least two years' service, while the Basic Agreement between the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) and the Confederation of Norwegian Business and Industry (NÃ¦ringslivets Hovedorganisasjon, NHO) states that shop stewards should be elected from among employees with at least one year's service in the company;
- in Italy, fixed-term workers may attend workers' meetings and have the right to participate in all union activities. In elections for unitary work place union structures (Rappresentanza sindacale unitaria, Rsu) - governed by a 1993 intersectoral agreement - all employees who have completed a trial period can vote, including fixed-term workers. The intersectoral agreement leaves to sectoral bargaining the establishment of the rules on non-permanent employees standing as a candidate. For instance, the metalworking agreement establishes that fixed-term workers may be elected as Rsu representatives if the remaining duration of their contract is at least six months at the date of the election; and
- in Finland, some collective agreements stipulate that personnel representatives must be permanent employees.
Temporary agency workers are in a special position, owing to the triangular nature of their relationship, involving the agency and the user company. For example:
- in France, agency workers representation and union rights are mainly exercised in the temporary work agency. To be allowed to vote in staff representative elections in the agency, workers must have been employed for three months or have worked 507 hours over the 12 months prior to the election. To be eligible to stand as a candidate, they have to have worked for six months or 1,014 hours over the 18 months leading up to the election;
- a national collective agreement in Belgium governing the representation of agency workers provides that their trade union delegates must have been employed for at least 120 days (assuming a five-day working week) in the year preceding their appointment. Furthermore, research indicates that in practice it is generally not possible to organise trade union elections in the agency work sector;
- in the Netherlands, since 1999, temporary agency workers are represented on the works council of the temporary agency (not that of the user company). This has reportedly caused some problems in the agencies' works councils, because the staff working at the agency are now outnumbered by the temporary agency workers. When temporary agency workers are employed in the same user company for more than two years, they also acquire representation rights in that firm (alongside their existing right in the temporary agency); and
- in Italy, temporary agency workers exercise all the trade union and participation rights provided for by legislation and collective bargaining at the agency. The 1998 sectoral agreement for temporary work agencies introduces a specific procedure for obtaining paid time off for union delegates who are working at a user company. While working in a user company, temporary agency workers may attend workers' meetings and have the right to participate in all union activities.
The longer-term perspective
A key issue related to non-permanent work is the longer-term role it plays in the working lives of the people involved - does it improve the employability of unemployed people, helping them enter open-ended employment at some point, or does it lead only to more non-permanent employment or further periods of unemployment? And does non-permanent employment have negative effects for those involved, such as greater insecurity, problems in engaging in social relationships etc.
In most countries, the long-term prospects of non-permanent employees seems to vary according to their educational level, income opportunities and job, but reliable data on this issue seem very patchy.
On the issue of employability and unemployment, taking the example of temporary agency workers, Belgian research indicates that most are doing this kind of work because they hope that it will lead to open-ended employment, but that in fact this does not occur in the majority of cases - the most common form of mobility is not from temporary agency work to open-ended work, but from agency work to unemployment and back again. German studies also emphasise that mobility between non-permanent and open-ended employment is low and asymmetrical, contributing to labour market segmentation (largely to the disadvantage of women and young people). It is reported from Ireland that the employability of non-permanent workers is likely to suffer from limited access to training and because long periods may be spent outside the labour market. However, Norwegian research suggests that non-permanent work mainly serves as a stepping-stone to permanent employment. The contradictions of research in this area are, however, illustrated by the case of Italy, where some studies indicate that those entering the labour market through a fixed-term contract may find it harder subsequently to find an open-ended job and are more likely to be unemployed, while other studies find that entering the labour market as a fixed-term worker does not have any significant impact on later career and occupational status. Similar contradictory research is reported from the Netherlands.
In Denmark, a 2000 survey of non-permanent 'atypical' workers with a high level of qualifications (DK0003171F) found a distinction between one group of successful and happy workers (eg working as engineers or in information technology) with a high income and a good working life based on their special skills, and another less content group (eg working as translators or teachers), who move from one short-term job to another, receive low pay and are frequently unemployed.
Unsurprisingly, given the nature of their employment, insecurity seems a common feature of non-permanent workers' lives. UK research has found that found that temporary workers feel less secure in their jobs than permanent employees, and are considerably more vulnerable to periods of unemployment. Finnish research highlights the greater insecurity felt by non-permanent workers in terms of their fears of losing their jobs, and the fact that their prospects worsen with age. It appears that the negative side-effects of non-permanent employment are greater for older employees, and it is not surprising that the European Foundation's third European survey on working conditions (see above) came to the conclusion that: 'Job security is a key factor in the job search strategies of most employment seekers. Only young entrants would accept a non-permanent contract.'
The extent to which aspects of non-permanent employment are dealt with in collective bargaining varies considerably between countries, and between forms of such employment. In many countries, collective bargaining relating to temporary agency work seems to be spreading. This often refers to specific sectoral collective agreements for the temporary agency work sector - which are found in Austria, Belgium, France, Luxembourg, the Netherlands, Portugal, Spain and Sweden. These agreements tend to cover issues such as pay and conditions, benefits, representation rights and training. There are also some company-level agreements between individual temporary work agencies and trade unions, as in Germany - at Randstad Deutschland (DE0105222N) and Adecco (in relation to the provision of workers for the EXPO 2000 world exhibition - DE9907211N).
Another approach to temporary agency work is agreements in other sectors or companies which regulate the use made of agency work. This is the case in many Italian sectoral agreements (such as those in chemicals and the public sector), which: identify the cases when the use of temporary agency work is allowed or not allowed; and lay down the maximum number of agency workers permitted, as a proportion of the permanent workforce. An example of a company agreement is at Rover in the UK, where in 1999, an agreement was reached on the use of temporary agency labour in the context of additional staffing needs in the run-up to the launch of a new model. The key to the new arrangement was that the temporary labour (production operatives) was supplied by Manpower, which itself has a recognition agreement with the Transport and General Workers' Union (TGWU) - one of two main unions organising the production workforce at Rover. The terms and conditions on which Manpower staff were engaged were equivalent to those of Rover's directly employed production staff.
Non-permanent work in general (rather than temporary agency work specifically), or other specific types of non-permanent work, seem to be rather less regulated by collective bargaining in most countries. There are, however, several cases of national intersectoral agreements dealing with some aspects of the issue. For example, a general framework governing a number of aspects of employment conditions for various forms of non-permanent employment is provided by intersectoral agreements in Belgium, while Ireland's current tripartite national agreement, the Programme for Prosperity and Fairness (PPF) (IE0003149F), contains a commitment to implement the EU fixed-term work Directive, and to consult the social partners on its transposition.
At sectoral level, bargaining seems quite scarce on this issue, with the main exceptions being Denmark, Italy, the Netherlands, Spain and Sweden - see table 4 below.
|Denmark||The major agreements in industry, services and construction (and local agreements within their remit) make special provisions for fixed-term employees in terms of pay and conditions of employment, an example being the rules on notice dismissal periods.|
|France||Bargaining deals only rarely with fixed-term contracts, though there are some provisions in sectoral agreements such as those for metalworking and building, while sectoral agreements in some industries using a sizeable proportion of casual work lay down special arrangements for such workers (eg on types of employment contract or unemployment allowances).|
|Italy||Sectoral bargaining in many industries has laid down the maximum permitted level of fixed-term employment as a proportion of the permanent workforce and, until recent legal changes (see above), defined the permitted reasons for use of fixed-term work|
|Netherlands||In 1999, provisions on non-permanent employment were included in around 60% of collective agreements (at sectoral and company level), often placing limits on the duration of non-permanent employment, setting a quota for non-permanent employees or defining the situations in which they can be used.|
|Norway||Legislation permits collective agreements laying down less strict rules on on temporary employment than those established by law in certain very limited areas, such as the arts, research work and sport. However, very few such agreements are thought to exist.|
|Portugal||Sectoral agreements do in some cases include provisions on non-permanent work, but these tend merely to repeat the legislative provisions in this area.|
|Spain||Almost all sectoral collective agreements at national or lower levels contain provisions on non-permanent employment, often regulating the duration of the various types of temporary contract and the type of activities for which they may be used (see above under 'Non-permanent employment in Spain'), or laying down commitments to convert temporary contracts into permanent contracts.|
|Sweden||It is quite common, especially in the private sector, for sectoral agreements to contain relatively minor variations in aspects of pay and conditions - such as working time - for non-permanent employees.|
Company bargaining on non-permanent work (excluding temporary agency work) is again uncommon. As mentioned above, local agreements in Denmark may lay down specific terms and conditions for fixed-term workers, while some company agreements in the Netherlands provide rules on the use of non-permanent workers. In Italy, company agreements often contain provisions on the extension to fixed-term workers of variable pay provisions, or lay down exceptions (in specific circumstances, such as reorganisation processes or closures) to the upper limits for the number of fixed-term workers agreed at sector level. In some instances, UK trade unions have secured collective agreements at company or site level regulating the use of temporary staff (in terms of circumstances, numbers and duration) and/or providing that they be employed on the same terms and conditions as permanent staff. Examples of such agreements are particularly to be found in the automotive sector, including Vauxhall, Ford and Agco. Elsewhere, a wide-ranging partnership agreement at the Cooperative Bank, concluded in 1997, included a commitment to transfer temporary employees to permanent positions wherever possible (UK9910135F). In Luxembourg, some collective agreements oblige employes to inform staff on fixed-term contracts of open-ended posts that become vacant, and give them preferential treatment, if appropriate.
Trade unions and non-permanent employment
In most countries, trade unions are quite critical about the increase in non-permanent employment, although they tend in many cases no longer to be opposed to atypical forms of works per se but rather to the exploitation and 'casualisation' sometimes associated with them, in the unions' view. The general approach, with some exceptions, is to accept a certain degree of non-permanent work and seek a set of rights and protections for the workers involved, while still in some cases (eg Belgium and Denmark) regarding open-ended employment as the norm. Unions are having to address concerns that employers are using non-permanent workers in order to reduce labour costs, while at the same time attempting to respond to their members' wishes for more 'employee-friendly' flexible working arrangements.
Within this general approach, there are variations in the degree of acceptance and national-specific concerns and demands. For example:
- Belgium's Confederation of Christian Trade Unions (ConfÃ©dÃ©ration des Syndicats ChrÃ©tiens/Algemeen Christelijk Vakverbond, CSC/ACV) was long opposed to the unrestricted development of temporary agency work, mainly because of the insecurity of its status. Now, following improvements to this status, CSC/ACV sees agency work as 'preferable in social terms to many other forms of flexible or temporary, and less well structured, employment'- while continuing to argue that employment contracts should be open-ended as often as possible;
- France's General Confederation of Labour (ConfÃ©dÃ©ration gÃ©nÃ©rale du travail, CGT) is calling for the use of fixed-term contracts and temporary agency work to be restricted to covering for employees temporarily absent from work, plus the payment of additional 'deterrent' social security contributions by companies using such work, an increase in the current 'precariousness allowance' (see above under 'Differences in pay'), and equal pay for those on precarious contracts and the other employees (all bonuses included). CGT also wants a genuine status for seasonal work and 'occupational social security';
- Portuguese unions believe that only through open-ended employment contracts can the quality of working life be promoted, and they therefore take a critical view of the expansion in fixed-term contracts, temporary agency work and other precarious forms of employment. The fight against this development is an explicit goal of the General Worker's Union (UniÃ£o Geral de Trabalhadores, UGT), while, in its manifesto for 2002, the General Confederation of Portuguese Workers (CGTP) aims to promote 'quality employment', including the fight against precarious employment and the guarantee of stable contractual obligations (PT0109101F); and
- in November 2001, Spain's General Workers' Confederation (UniÃ³n General de Trabajadores, UGT) presented a a 'popular legislative initiative' (a procedure that allows citizens to present proposals directly to parliament if they are endorsed by a certain number of signatures) on 'stability and safety in employment', which demands guarantees of quality in employment (ES0110203N). It calls, among other measures, for more 'rational' regulations on the use of temporary contracts, in order to prevent the common cases of abuse and to foster recruitment on permanent contracts. It criticises in particular the government's March 2001 labour market reform (ES0103237F and ES0109259N).
Union membership among non-permanent workers
In general, union membership among non-permanent employees seems to be lower than among open-ended employees - one factor being that the limited period of employment in one company is not conducive to union membership, and another being the insecurity of such workers. Non-permanent employment is often more likely to be found in non-union establishments than in unionised ones. However, there is a lack of accurate data on union membership among non-permanent workers in many countries. For example, while lower unionisation for this group is reported from Greece (where it is thought to be marginal) Ireland, and Portugal, no figures are available. The figures for the four countries where data are available are set out in table 5 below.
There may be other specific factors working against union membership among non-permanent workers. For example, in Greece, the trade union legislation (Law 1264/82) requires that a person be employed for two months before becoming eligible to join a trade union organisation.
However, the picture of low union membership among non-permanent workers is not universal. In Belgium, non-permanent workers have become a substantial source of union members - for example, over half of all temporary agency workers are trade union members. This may be because Belgian unions can pay out unemployment benefit, and provide their members with legal support, thus providing incentives for non-permanent workers to join (problems lie more in their practical involvement in trade union activities, where the precariousness of their contracts is a major obstacle). Similarly, union membership among non-permanent workers in Denmark may be higher than the national average of 83% because Unemployment Insurance Funds are linked to the unions (though union membership is not compulsory for receiving benefit from these funds).
In most European countries, trade unions have traditionally focused their work on open-ended, full-time employment and have often ignored the increase in new forms of employment. In recent years, some unions have made efforts to recruit new members in non-permanent work and in atypical employment more widely.
Specific trade union attempts to organise non-permanent workers include efforts made by Dutch trade unions around the time of the 1999 legislation on 'flexibility and security' (which regulated some aspects of such work), though it remains difficult for them to recruit such workers. The unions' aim is to achieve equal terms of employment for permanent and non-permanent employees, ensuring that when employers use non-permanent work this is motivated by a need for flexible labour and not just cheap labour costs. Since the early 1990s, UK unions have increasingly come to recognise the enduring nature of non-permanent forms of employment, and therefore the need to extend union recruitment, organisation and representation to these groups. A central focus for the Trades Union Congress (TUC) union organising academy, launched in the mid-1990s (UK9708155F), has been initiatives aimed at organising employers and locations with a high proportion of non-permanent workers. Similar initiatives have been pursued especially by the major GMB and TGWU general unions. Spanish trade unions have campaigned extensively around temporary agency work, including the provision of specific advisory services. In Greece, a Panhellenic Federation of Public Sector Temporary Employees was active in the 1980s, but dissolved in the early 1990s, when the phenomenon of temporary employment in the public sector decreased perceptibly.
Non-permanent workers have also been included in wider trade union campaigns to organise atypical workers - such as the special unions for new types of workers established by the Italian union confederations (IT9807327F). In Ireland the recruitment of atypical workers, particularly in the largely non-unionised private service and technology sectors, is one of the key challenges facing the trade union movement, given declining overall union density. However, to date, the unions have not experienced too much success in recruiting and organising non-permanent transient workers, especially in new sectors of the economy. Some attempts to attract atypical workers have concentrated on the information and communications technology sector, where (ostensibly) self employed persons and fixed-term contracts are widespread. An example is Austria's Union of Salaried Employees (Gewerkschaft der Privatangestellten, GPA), which has recently launched an initiative entitled work@flex, providing services and insurance, for various types of self-employed workers.
Employers' views on non-permanent employment
In general, non-permanent employment is seen by employers as a means for them to make their workforce more flexible, as it allows them to adapt the number of employees to the requirements of the company. Flexibility is a central aim of employers in the current competitive environment, and employers' organisations thus tend to promote non-permanent employment and, by and large, oppose new regulations and call for the relaxation of existing rules in this area.
Non-permanent employment plays an important role in what is widely seen as an employers' strategy to create a core/periphery distinction in their workforce in order to achieve flexibility. According to various commentators, since the mid-1970s, non-permanent employment has spread (having formerly existed mainly in seasonal work and in services such as retail and catering) as many businesses have restructured and moved to more flexible ways of staffing. Many firms tend to have a permanent core workforce, plus a peripheral workforce in which non-permanent workers allow the company to achieve numerical flexibility, in order to:
- meet fluctuations in demand;
- replace staff absent from work;
- reduce labour costs; and
- find employees with scarce skills that are needed only for a short period or special projects.
From this perspective, non-permanent workers create a 'buffer' peripheral workforce as a hedge against market uncertainty. Moreover, it is claimed that a further advantage for employers is that, since non-permanent workers are less likely to be trade union members or covered by collective agreements, their use is associated with low union influence. Alternative ways for firms to achieve numerical flexibility are the increased use of part-timers, flexible working time arrangements, overtime and new shift patterns, as well as 'outsourcing' strategies. External flexibility is often accompanied by internal flexibility - employees in the permanent workforce must show more flexibility than before, because of changes in work organisation, working time and the type of work, though they do not necessarily face the insecurity connected with non-permanent employment.
In this context, in nearly in all countries examined, employers' associations view the labour market as too inflexible and demand more flexible regulations, whatever the current legislative framework. This is not to say that employers are always opposed to regulation of non-permanent work, while there are also nuances in their support for non-permanent employment. Danish employers see non-permanent work as a supplement to a permanent workforce and not as an end in itself (a point also made by Finnish employers), while the 'organised' employers believe that there should be a degree of regulation.
The case of the UK illustrates that, as well as seeing benefits in non-permanent employment, some employers may also experience problems. While employers' organisations have generally welcomed the development of a flexible labour market, a 1999 study by Industrial Relations Services reported that half of the companies surveyed for the research perceived temporary staff as being less reliable, less committed and less well trained than permanent employees. A quarter reported that costs had increased as a result of using temporary employees. These findings are supported by a survey of workplaces in the West Midlands region, which found that employers increasing their use of short-term temporary, fixed-term and temporary agency workers were more likely to report increases in costs, and in problems of coordination, than decreases (UK0006178F).
Aside from the flexibility issue, some employers' organisations - such as the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF), the Irish Business and Employers Confederation (IBEC) and Italy's Confindustria- also promote non-permanent employment as a means of creating employment
To summarise briefly the (necessarily tentative - see below) findings of this study:
- in 2000, over an eighth of employees in the EU (13.4%) had an employment contract of limited duration, up from under a 10th (9.1%) in 1983. The level of limited-duration employment ranges from around 5% of employment or under in Ireland and Luxembourg to nearly a third in Spain, where the issue of non-permanent work is a central issue in the labour market and industrial relations;
- women are more likely to have non-permanent employment than men - in 2000, 14.6% of all female employees in the EU had an employment contract of limited duration, compared with 12.6% for men;
- the 1999 EU Directive on fixed-term work, providing for the principle of non-discrimination and seeking to prevent abuses and provide a number of guarantees, had been transposed through new legislative provisions in seven of the 16 countries examined by June 2002. The implementation process is relatively well advanced in a number of other countries, though in Austria and Luxembourg the government believes that no implementing measures are required, as current national provisions already meet the Directive's requirements. The impact of the Directive varies considerably between different Member States, depending on the previous state of national regulations on fixed-term work. The changes to national regulations made (or due to be made) to comply with the Directive are relatively minor in countries such as Belgium, Denmark, Germany, the Netherlands and Norway, rather more substantial in countries such as Finland, France, Greece, Spain and Sweden, and greatest in countries which previously had little or no specific regulation of fixed-term work, notably the UK;
- the implementation of the fixed-term work Directive should ensure a basic level of protection and rights for fixed-term employees across Europe, and prevent discrimination against them in some areas (the proposed Directive on temporary agency work, if adopted, should do the same for agency workers). However, the context is one in which workers in non-permanent employment have traditionally been subject to a degree of discrimination, and in which such employment may have negative implications for their career prospects and living conditions;
- although the situation varies from country to country, non-permanent workers are in some cases likely to face discrimination in a number of areas, often owing to length-of-service requirements for entitlement to some legal or collectively agreed entitlements, or benefits offered by employers. This can apply in areas such as dismissal protection and compensation, pay (especially bonuses and other additional payments), pensions (sometimes basic state pensions, and more frequently additional provision) and unemployment benefits;
- non-permanent employees (and especially those on shorter contracts) tend to receive less training than those on open-ended contracts, though temporary agency workers are sometimes better provided for in this area;
- there is some evidence of links between non-permanent employment and increased health and safety risks or poor working conditions;
- in some countries, there are service-related conditions for acting as employee or trade union representatives or standing and/or voting in elections, which may affect the representation of non-permanent workers;
- in most countries, the long-term career prospects of non-permanent employees seems to vary according to their educational level, income opportunities and job, but reliable data on this issue seem very patchy. There is contradictory evidence on whether non-permanent employment improves the employability of unemployed people, helping them enter open-ended employment, or leads only to more non-permanent employment or further periods of unemployment. Unsurprisingly, insecurity seems a common feature of non-permanent workers' lives;
- the extent to which non-permanent employment is dealt with in collective bargaining varies considerably between countries, and between forms of such employment. In many countries, collective bargaining relating to temporary agency work seems to be spreading, but non-permanent work in general, or other specific types of non-permanent work, seem to be rather less regulated by collective bargaining in most countries. There are relevant national intersectoral agreements in a few countries, and sectoral and company agreements in some others, generally adapting pay and conditions to non-permanent workers, or regulating the use of non-permanent work;
- broadly speaking, many trade unions have moved from outright opposition towards accepting a certain level of non-permanent work and seeking a set of rights and protections for the workers involved, while still in some cases regarding open-ended employment as the norm. In general, union membership among non-permanent employees seems lower than among open-ended employees, though figures are scarce. Some unions have made efforts to recruit new members in non-permanent work and in atypical employment more widely; and
- non-permanent employment is generally seen by employers and their organisations as a means to make their workforce more flexible, allowing them to adapt the number of employees to the requirements of the company. Flexibility is a central aim of employers in the current competitive environment, and employers' organisations thus tend to promote non-permanent employment and, by and large, oppose new regulations and call for the relaxation of existing rules in this area.
However, the national reports and Eurostat data indicate that there is relatively little precise information on all forms of work differing from the 'typical' employment relationship, and that different forms of non-permanent employment are often not distinguished. This also applies to information on the effects of non-permanent employment, especially in a life-term perspective, so that only very general conclusions - such as that employees in such employment are often part of the fringe labour market and face low income, unstable working conditions and a lack in social security - can be made. If the social security system is based on labour market participation, low or discontinuous incomes and interrupted employment (especially because of care obligations) affect social security entitlement negatively. Some of the more detailed studies find, that although there is a high mobility between different forms of employment, non-permanent employment constitutes a 'trap' for lifetime employment prospects and earnings (as, to a lesser extent, does part-time work). Non-permanent employment is often used as a 'trial period' for labour market entrants such as young or unemployed people. However, some individual employees may voluntarily choose non-permanent employment on the grounds that it enables their preferences for more autonomy in working time (and in general) to be met.
Against the common view that that the quantity of jobs can be increased only by lowering the quality of jobs, the concept of 'flexicurity'- which has been used in the debate on non-permanent employment for some years, especially in the Netherlands (NL9901117F) - aims to find a balance between flexibility for employers (and employees) and security for employees. The different opinions on this subject are well illustrated by an exchange at a seminar in Stockholm in February 2001: a representative of Swedish private sector employers stated that 'flexibility is a condition for security', to which the chair of the Swedish Trade Union Confederation (Landsorganisationen, LO) responded that 'security is a condition for change'.
It is difficult to draw simple conclusions or to give uniform assessments on non-permanent employment, as such atypical work allows entry into the labour market, but at the same time reproduces segmentation and segregation on the labour market relating to gender and hierarchical relationships. Thus, it leads to a reproduction of inequality on the labour market. (Alexandra Scheele, Institute for Economic and Social Research, WSI)
Annex - 'Atypical' work?
It is widely believed that European labour markets have changed dramatically in recent years and that there have been significant upheavals in the structure of employment, demonstrated by a decrease in open-ended ('permanent'), full-time employment and an upsurge in the level of part-time work, fixed-term contracts, temporary agency work, (ostensible) self-employment and very low-paid employment - in other words, in all forms of work frequently described as 'atypical', 'contingent' or 'non-standard' employment.
The terms 'atypical' and 'non-standard' employment have aroused criticism, because they are used to describe all forms of employment which differ from the 'typical' employment relationship, defined as a socially secure full-time job of unlimited duration with standard working hours (in terms of their duration, location, and distribution). This 'typical employment relationship' not only guarantees a regular income safeguarding the recipient's livelihood, but also - via social security systems geared towards wage earners - secures pension payments and provides protection against ill-health or unemployment. In addition, the standards of this 'typical' relationship govern company-level job and health protection.
Besides these individual standards (and derived ones for spouses and children) associated with the 'typical' employment relationship, the regular working hours associated with them serve as a reference point in connection with wage policy, social security, collective representation and working time arrangements that deviate from the norm. Involvement in such 'normal' gainful employment can guarantee stable integration into work and society. Being in a 'typical' (rather than ''atypical'') employment relationship has a great influence on individuals' career opportunities.
A crucial issue is that the 'typical' employment relationship has a gender-specific orientation - it is primarily men who are involved, while far more women work under 'atypical' conditions or seek such jobs on account of the gender-specific division of labour ('double socialisation''), and the greater presence of women on the labour market has substantially contributed to the rise in forms of employment outside the 'norm'.
In this context, it makes sense to distinguish between the normality of 'typical' employment relationships in the sense that they are widespread in reality, and the 'standard' and model function that they play - in other words, a distinction between quantitative and qualitative normality (as made in 'Krise des 'NormalarbeitsverhÃ¤ltnisses''? Ãœber eine konfuse Debatte und ihre politische Instrumentalisierung', Alexandra Wagner, in Geringere LÃ¶hne - mehr BeschÃ¤ftigung? Niedriglohnpolitik, Claus SchÃ¤fer (Hrsg), Hamburg, 2000). The two aspects are closely linked and mutually dependent: 'Normal jobs become the norm, because they are normal; and because they comply with the norm they are normal.'. This suggests that a shift in normality - for instance, more widespread 'atypical' work in practice - ought to have an impact on the 'norm', in the same way as the 'norm' should influence normality.
The widespread use of the term 'atypical employment' makes it difficult to take a deeper look at the differences between the different forms of employment represented by this term. One recent study (Atypische BeschÃ¤ftigung. Internationale Trends und Sozialstaatliche Regelungen, E TÃ¡los (ed), Vienna, 1999) points out that a part-time job with social security coverage, regular working time and protection against dismissal is worlds apart from, for example, discontinuous forms of self-employment with marginal opportunities for material and social participation. In addition, it is argued that the use of the terms 'atypical' and 'typical' employment are not dominant in all countries, because in many cases 'typical' (ie open-ended and full-time) employment (a concept which is thought to be male-centred - see above) has never really been 'typical' for all employees.
In order to decide whether a job has a negative impact on working conditions and might therefore be called 'precarious', criteria are required. TÃ¡los (1999) quotes the following set of criteria:
- short-term employment or a high risk of losing the job;
- no opportunity for employees to control working conditions, wages etc;
- less protection and social security coverage provided by law or collective agreement;
- a low income, which is linked to poverty; and
- a low level of social integration.
Overall, the concept of precariousness includes the dimensions of instability, lack of protection, insecurity and social and economic weakness. However, it is not each single dimension but the combination of them that influences the level of precariousness. Referring to this idea, TÃ¡los calls for a differentiation between particular jobs and types of precariousness, and a recognition that 'atypical' employment forms a continuum.
Rather than taking a broad understanding of 'atypical employment' which includes part-time work, the current study concentrates on the criteria of discontinuity and thereby on fixed-term employment, temporary agency work, seasonal work and other forms of employment which are only temporary. Nevertheless, the contributions from the EIRO national centres indicate that the non-permanent employment, and the issues associated with it, sometimes go hand in hand with other forms of 'atypical employment', such as part-time work.