Discussion Paper

The Transformation of Australian Industrial Relations

*** This series is now complete ***

The Changing Nature of Employment Arrangements - Discussion Paper Series No 5 (December 1998)

Executive Summary

This paper documents recent trends and patterns in Australia in three types of `non-standard' employment arrangements - casual employment, fixed-term employment and contractor-based employment.

A major conclusion reached in the analysis is that it cannot be automatically assumed that these relatively `new' types of employment arrangements always belong to the periphery of the labour market. Specifically, analysis of AWIRS data leads to the conclusion that fixed-term employment does not differ much from conventional ongoing employment arrangements, with the notable exception that fixed-term jobs are of much shorter job tenure, which in turn promotes a relatively high level of job insecurity.

Even casual jobs are found to be quite diverse and it would be misleading to describe all casual jobs as inherently low skilled, insecure, poorly paid and unsatisfying. Nevertheless, it is clear that casual work is highly concentrated in relatively unskilled jobs.

Unfortunately the AWIRS data cannot tell us much about the nature of work performed by contractors. Other survey-based work, however, suggests that contractors are employed in a diverse range of activities, many of which involve complex skills. This is consistent with other responses indicating that the principal reason firms use contractors is to access specialised skills not available in-house - almost 60 per cent of workplaces which used contractors indicated that this reason was of `large importance'.

Overall, it is concluded that there are good reasons to suspect that casual employment serves a very different purpose compared with both fixed-term arrangements and contractors. Moreover, it seems likely that the types of firms that use casuals intensively are quite different from the types of firms that make large use of fixed-term arrangements and contractors. Certainly, the incidence of casual employment across industries is notably different from that for the other two employment types. Casual employment, for example, is overwhelmingly concentrated in three sectors - Retail trade, Accommodation, cafes and restaurants and Cultural and recreational services - all of which are associated with a relatively low incidence of both fixed-term employment and contractors.

The second major finding of the paper is that the factors underlying recent growth in casual employment are quite different from the factors underlying the increase in use of contractor-based labour. Recent casual employment growth, for example, was largely found to be a function of changes in the composition of employment that have favoured casual employment. Specifically, it is concluded that there are four principal reasons why casual employment has been growing in recent years. These are:

i) changes in the industrial composition of employment favouring industries where casual employment is widespread;

ii) a reduction in levels of unionisation, weakening the ability of unions to resist the introduction by employers of casual employment;

iii) the gradual privatisation of many areas of employment formerly dominated by the public sector where casual employment has traditionally been avoided; and

iv) a marked growth in the incidence of casual employment at new workplaces and firms.

In stark contrast, very little of the growth in contractor-based arrangements can be explained as a result of compositional shifts. Instead, the driving factor here would appear to be changes in employer behaviour.