Fixed-term contracts still common in public sector

Although the use of fixed-term contracts has decreased in Finland since its peak in 1997, it is still widespread by European standards. A recent study divides fixed-term employment into two categories: conventional and modern. Unlike conventional fixed-term employment, modern fixed-term contracts are used for jobs and tasks that do not intrinsically require them. This applies especially to women working in the public sector. Moreover, tightened legislation concerning the use of fixed-term contracts has led to an increased use of temporary agency work instead.

In March 2005, the Ministry of Labour appointed an administrator to investigate the frequency of fixed-term employment contracts and their legality. The government aims to reduce the number of fixed-term employment relationships in the public sector by converting them into permanent contracts. In 2001, legislation was tightened with regard to the use of fixed-term contracts.

As part of the investigation, Statistics Finland was commissioned to carry out a study. The study mapped out the number of fixed-term employment relationships, reasons for their use in different working communities, and employees’ experiences of fixed-term work. The use of hired work was included within the wider definition of fixed-term employment relationships.

Fixed-term employment widespread

The latest statistics continue to give cause for concern as they show that, after a small decline, the number and proportion of fixed-term employees increased again in the public sector in the first quarter of 2005. Comparing the EU15 countries, Finland has been among the leading countries in terms of fixed-term employment for some time: in the 1990s, only Spain recorded a higher number of fixed-term employees in relative terms. In 2004, comparing all employees in the EU25, only Spain (32%), Poland (23%) Portugal (20%) and Slovenia (18%) were ahead of Finland (17%) in the use of fixed-term contracts (European Labour Force Survey, 2004).

In Finland, fixed-term employment affects women more than men, and concerns well-educated workers more than those who are less well educated.

Conventional and modern fixed-term employment

The data from Statistics Finland’s Quality of Work Life Surveys divide fixed-term employment into two categories: conventional and modern. Fixed-term employment relationships have traditionally been used for seasonal or piecework jobs. However, modern fixed-term employment contracts are used for jobs and tasks that do not necessarily require them.

Two groups of modern fixed-term employees can also be distinguished. The first group comprises well-educated women employed in the public sector, whose fixed-term employment often consists of consecutive periods as temporary substitutes. The second group comprises well-educated, professional men aged over 40 years, whose fixed-term employment careers are often project-based or posts that are filled for a fixed period only. Comparing these two groups, the latter situation clearly emerges as more positive in terms of position in the work community and personal feelings about fixed-term employment.

Women in the public sector at risk

Since its peak in 1997, the proportion of fixed-term employees has decreased. However, data suggest that women who worked in the public sector in the wake of the recession have not been able to stabilise their position in the labour market as easily as before the recession, or as easily as the women who were recruited in the 2000s. According to the 2003 Quality of Work Life Survey, this difficulty applied to women between the ages of 30 and 39 years who had worked in the local government sector for three to nine years. As noted above, consecutive fixed-term employment contracts are especially common among female employees in the public sector. They are most widespread among fixed-term employees in healthcare occupations, of whom 43% already had five or more successive employment contracts with the same employer.

Increasing use of agency work

The qualitative section of the study comprised interviews conducted at nine workplaces. Accordingly, employer representatives were interviewed in order to explain their use of fixed-term contracts and agency work. Shop stewards were also interviewed at the same workplaces. Thus, it was possible to examine the influence of local factors on the use of fixed-term employment contracts.

The interviews confirmed the survey findings that fixed-term employment relationships remained a problem especially in the public sector, even though workplaces are aware of the guidelines concerning their conversion into permanent contracts. External funding and project work have increased and are often used to defend the use of fixed-term contracts.

In all sectors, fixed-term employment is associated with many difficulties: lack of commitment to work causes problems for the employer and in the work community, while this type of contract causes continual insecurity for the employees. However, the use of fixed-term contracts is sustained by the desire to avoid dismissals and co-determination negotiations, and general financial uncertainty in the organisation.

Furthermore, tightened legislation has led to an increased use of temporary agency work instead of fixed-term contracts. Agency workers are used more - especially in the private sector - to manage workloads at peak periods or in recruiting new permanent employees. However, the use of agency workers brings its own problems, such as the complication of two parallel employers, high turnover, and lack of commitment.

References

Eurostat, European Labour Force Survey , 2004.

Lehto, A.-M., Lyly-Yrjänäinen, M. and Sutela, H., Pysyvän työn toivossa. Määräaikaisten työsuhteiden käytöstä ja kokemisesta [In hope of permanent work. The use of fixed-term contracts and how they are experienced], Labour Force Policy Studies 291, Ministry of Labour, Helsinki, 2005.

Hanna Sutela