‘Precarious’ Non-Standard Employment

8/3/2019 ‘Precarious’ Non-Standard Employment

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‘Precarious’ Non-Standard Employment –

A Review of the Literature

Abstract

This paper reviews the literature around ‘non-standard’ and ‘precarious’ employmentand provides an introduction to the issues surrounding the interface between sometypes of non-standard employment and ‘precariousness’. The literature defines ‘non-standard’ employment as employment that is not full-time and permanent and‘precariousness’ as employment that is low quality and which puts workers at risk of injury, illness, and/or poverty (from low pay and little opportunity for training andcareer progression). While these terms have obvious limitations, they are commonlyused in the literature that has been reviewed.

There is no causal link, necessarily, between non-standard work and precarious work.On the contrary, many forms of non-standard work are highly desirable for bothworkers and employer s and, equally, precarious work may exist in standardemployment. This paper focuses on casual and temporary work arrangements because its hypothesis, and the conclusion reached in the literature, is that thesearrangements have a higher risk of being precarious than standard employment or other forms of non-standard employment. It is also an area where the New Zealanddata is very limited.

The review develops potential indicators of precariousness that could be used in the New Zealand context and argues that it is the interaction of the nature of jobs andworker preferences that determine what constitutes precarious employment. Itexamines the location and characteristics of people likely to be associated with theseforms of non-standard employment, the determinants of non-standard employmentand its growth, and some of the policy concerns and complexities highlighted in theinternational literature around issues of income, training, health and safety, mobilityand labour market outcomes.

Given the significant limitations of cross-country comparability in this area, much of the overseas evidence can only suggest trends and themes for further areas of researchfor New Zealand. It is clear from the review that there is a need for quantitative andqualitative data on casual, temporary and fixed-term employment, and for datacollection to have a time-series dimension to allow the monitoring of trends andlonger-term outcomes for workers.



ContentsABSTRACT.............................................................................................................................................2

CONTENTS ............................................................................................................................................3

EXECUTIVE SUMMARY ....................................................................................................................5

OBJECTIVES OF THE REVIEW ..............................................................................................................5FINDINGS OF THE LITERATURE REVIEW .............................................................................................6DEFINITIONAL ISSUES .........................................................................................................................6THE INCREASE IN NON-STANDARD EMPLOYMENT..............................................................................6POSSIBLE INDICATORS OF PRECARIOUSNESS FOR USE IN NEW ZEALAND.........................................7LOCATION OF PRECARIOUS NON-STANDARD WORK ...........................................................................7

CHARACTERISTICS OF PERSONS ASSOCIATED WITH PRECARIOUS NON-STANDARD EMPLOYMENT

CONDITIONS .........................................................................................................................................7EXPLANATIONS FOR THE PREVALENCE OF NON-STANDARD WORK ...................................................8POTENTIAL POLICY CONCERNS...........................................................................................................8

Earnings differentials......................................................................................................................9

Employment relations......................................................................................................................9

Health and safety.............................................................................................................................9

Training...........................................................................................................................................9

Labour market outcomes / mobility...............................................................................................10Social and psychological consequences........................................................................................10

WHERE TO FROM HERE?...................................................................................................................11

1. INTRODUCTION.............................................................................................................................12

1.1 OBJECTIVES OF THE R EVIEW .....................................................................................................131.2 STRUCTURE OF THE REVIEW.......................................................................................................141.3 DEFINITIONS AND MEASURES ......................................................................................................14

2. WHAT IS NON-STANDARD EMPLOYMENT AND WHAT FORMS ARE MOST LIKELY

TO GENERATE PRECARIOUSNESS?............................................................................................16

2.1 CONTEXT – INCREASING NON-STANDARDISATION OF THE INTERNATIONAL LABOUR FORCE ..172.2 THE EXTENT OF NON-STANDARDISATION … DIFFERING VIEWPOINTS ......................................18

2.3 SPECIFIC FORMS OF NON-STANDARD EMPLOYMENT AND TRENDS IN NEW ZEALAND...............192.3.1 Casual, temporary and fixed-term work ...............................................................................19

2.3.2 Part-time and self-employment in New Zealand ..................................................................21

2.3.3 Contractors in New Zealand ................................................................................................232.4 NON-STANDARD EMPLOYMENT RELATIONS IN NEW ZEALAND .................................................23

3. WHAT IS PRECARIOUS EMPLOYMENT? ...............................................................................24

3.1 PRECARIOUS EMPLOYMENT INDICATORS IN A NEW ZEALAND CONTEXT .................................25

4. LOCATION – WORKPLACES, INDUSTRIES AND PERSONS ASSOCIATED WITH

PRECARIOUS EMPLOYMENT CONDITIONS .............................................................................28

4.1 WHERE ARE ‘LOWER -END’ NON-STANDARD WORKERS LOCATED ACCORDING TO

INTERNATIONAL RESEARCH? ............................................................................................................28

4.1.1 Where are ‘lower-end’ non-standard workers located according to New Zealand research?.......................................................................................................................................................29

4.1.2 Public / private sector – international evidence … ..............................................................314.1.3 Size of enterprises – international evidence ….....................................................................32

… and New Zealand evidence .......................................................................................................32

4.2 CHARACTERISTICS OF PEOPLE IN LOWER END NON-STANDARD JOBS – AGE, GENDER ,ETHNICITY, SKILL LEVELS, EDUCATION...........................................................................................32

4.2.1 Gender – New Zealand evidence .........................................................................................33

4.2.2 Ethnicity – international evidence.......................................................................................33

4.2.3 Age and education – international evidence .......................................................................34



5. WHAT DETERMINES THE EXTENT OF NON-STANDARD AND PRECARIOUS WORK?

................................................................................................................................................................36

5.1 WHAT ARE THE MOTIVATIONS OF EMPLOYERS FOR USING NON-STANDARD WORK

ARRANGEMENTS INTERNATIONALLY …? .........................................................................................37…. AND IN NEW ZEALAND?...............................................................................................................385.2 WHAT ARE THE MOTIVATIONS OF EMPLOYEES FOR WORKING IN NON-STANDARD /

PRECARIOUS JOBS?............................................................................................................................39… AND IN NEW ZEALAND?................................................................................................................41

5.3 WHAT CONTRIBUTES TO THE GROWTH OF PRECARIOUS/NON-STANDARD WORK ?..................416. POTENTIAL POLICY CONCERNS.............................................................................................43

6.1 EARNINGS DIFFERENTIALS..........................................................................................................436.2 EMPLOYMENT RELATIONS ..........................................................................................................446.3 HEALTH AND SAFETY ..................................................................................................................466.4 TRAINING.....................................................................................................................................476.5 TRADE UNIONS – THEIR RELATIONSHIP WITH NON-STANDARD WORK ......................................496.6 MOBILITY ....................................................................................................................................50

6.6.1 New Zealand research on mobility.......................................................................................54

6.7 WORK -FAMILY AND OTHER SOCIAL CONCERNS.........................................................................546.7.1 Evidence from New Zealand.................................................................................................55

6.7.2 Evidence from overseas........................................................................................................55

7. CONCLUSIONS ...............................................................................................................................57

WHERE TO FROM HERE?...................................................................................................................63

REFERENCES......................................................................................................................................66

APPENDIX ONE ..................................................................................................................................73

DEFINITIONS OF TEMPORARY EMPLOYMENT IN SELECTED OECD COUNTRIES’ LABOUR FORCE

SURVEYS.............................................................................................................................................73

APPENDIX TWO.................................................................................................................................74

DEFINITIONS OF TEMPORARY EMPLOYMENT USED IN THE OECD (2002) REPORT...............................74

APPENDIX THREE.............................................................................................................................76

R EGULATORY FRAMEWORK FOR EMPLOYMENT R ELATIONS ..............................................................76



‘Precarious’ Non-Standard Employment –

A Review of the Literature

Executive summary

‘Non-standard’ work, that is, work that is not full-time and permanent, is increasing in New Zealand – data on trends in part-time work and self-employment show a gradualincrease over the past 15 years. International evidence also points to an increase in‘non-standard’ work in developed nations (ILO, 1997) and there is general concern inthe overseas literature about the growth in ‘precarious’ non-standard employment.

There are many categories of non-standard work and, in terms of employmentconditions, a continuum of these non-standard jobs exists.

• At the ‘higher end’ of the continuum are some of the self-employed and part-time workers who are more likely to have reasonable incomes, job stabilityand workplace autonomy.

• At the ‘lower end’ of the continuum are some of the casual, temporary andfixed-term workers who are, generally speaking, more likely to be in‘precarious’ employment than those at the ‘higher end’. ‘Precarious’employment is employment that is low quality and that encompasses a rangeof factors that put workers at risk of injury, illness and/or poverty (from lowwages, low job security, limited control over workplace conditions, little protection from health and safety risks in the workplace and less opportunityfor training and career progression) (Burgess and Campbell, 1998; Rodgersand Rodgers, 1989).

This review is concerned with the ‘lower end’ non-standard jobs. Of course, it needsto be borne in mind throughout this review that such terminology in and of itself can be simplistic; in reality there is considerable overlap between the various forms of non-standard employment and there are no absolutes in terms of ‘good’ job or ‘bad’ job notions. In addition, the terminology has obvious limitations (for example, someforms of ‘non-standard’ work are so prevalent as to be ‘standard’), however, theconcepts are commonly used in the literature that has been reviewed.

Objectives of the reviewThis review aims to explore the linkages between the ‘lower-end’ non-standardemployment forms and ‘precariousness’ and the implications for labour market

outcomes. In order to address this issue, it is important to find a way of defining‘precariousness’ that is appropriate and relevant in a New Zealand context. We needa New Zealand specific measure for precariousness and this review begins that task.

While we acknowledge that some standard employment may be precarious, it is notthe intention of the current review to assess precariousness against all employmentforms. This is due, in part, to reasons of scope, and because evidence suggests thatthe ‘lower-end’ forms of non-standard work (such as casual, temporary and fixed-term employment) are more at risk of being precarious than standard employment.



As part of our attempts to understand this issue, the review will examinedemand/supply/institutional explanations for the prevalence of non-standard work,and the motivations for employers and workers for offering and engaging in non-standard employment.

The review will discuss the policy concerns surrounding lower end non-standardwork, highlighted in the international literature, for employment relations, health and

safety, training issues, labour market outcomes, work-life balance and other social andeconomic implications.

Findings of the literature reviewGiven the paucity of information on casual, temporary and fixed-term work in NewZealand, the majority of the literature surveyed is from overseas, particularlyAustralia, the US, Europe and the United Kingdom, with New Zealand material usedwhere it is available.

Definitional issuesDefining and measuring the various non-standard work forms, and non-standard work

itself, is an extremely problematic task, given the widely varying country definitionsthat exist and the different methods of measuring them. Terms used in studies andtheir definitions vary between and within countries. It follows that the many studiesreferred to in this paper use a variety of terms, which may only partially fit with our definitions of casual, temporary and fixed-term employment. This makescomparability of findings between countries problematic.

In addition, forms of non-standard employment are not mutually exclusive and theyfrequently overlap. For example, casual workers may be ongoing or temporary, part-time or full-time, and temporary workers may be casual or full-time.

Given the significant limitations of cross-country comparability in the area of non-standard work, and the different labour market contexts and regulatory arrangements,caution is needed in any attempts to draw inferences from the international evidence.The overseas findings are useful, however, in providing us with a general picture of trends and patterns and in suggesting themes for future New Zealand research.

The increase in non-standard employmentThe majority of the literature is in agreement that non-standard employment hasincreased over the last 15 to 20 years. Views differ, however, as to the actual extentof the increase and the adequacy of national datasets, because of disagreement over definitional and measurement issues.

We know that a considerable, and increasing, proportion of the New Zealandworkforce is engaged in non-standard work, given the data we have on part-time andself-employment. However, there is no official data collected on casual, temporaryand fixed-term employment in New Zealand. The data we do have are from the twonational workplace surveys conducted in 1991 and 1995 (Brosnan and Walsh, 1996),which found that, for both years, casual, temporary and fixed-term employment madeup 11 percent of the workforce.



Possible indicators of precariousness for use in New ZealandThe characteristics of precariousness are not absolute – they are best thought of as acontinuum and it is the combination of a number of elements that causes precariousness, rather than any one aspect.Below are potential indicators of precariousness that could be used in the NewZealand context.

i. The job can be terminated with little or no prior notice by the employer. ii. Hours of work are uncertain or can be changed at will by the employer. iii. Earnings are uncertain or irregular. iv. Functions of the job can be changed at will by the employer. v. There is no explicit or implicit contract for ongoing employment. vi. There is, in practice, no protection against discrimination, sexual harassment,

unacceptable working practices. vii. The job is low income – at or below the minimum wage. viii. There is little or no access to ‘standard’ non-wage employment benefits such as

sick leave, domestic leave, bereavement leave or parental leave.1

ix. There is limited or no opportunity to gain and retain skills through access to

education and training. x. The task performed or the health and safety practices at the workplace makes the

job unhealthy or dangerous.

In assessing precariousness, it is also important that the focus is not solely on the jobitself or the nature of the contract but takes into consideration the characteristics of theworker and their preferences. For example, a casual night job with low pay, andirregular hours and earnings may be desirable for a student wishing to combine full-time study with paid work; however, for a single parent the same arrangement could be considerably more problematic. It is the interaction of the nature of jobs andworker preferences that determine what constitutes precarious employment.

Location of precarious non-standard work International research indicates that the highest concentrations of lower end non-standard jobs are to be found in agriculture and unskilled, predominantly manual, jobs(conventionally held by men), and in the less skilled service jobs (conventionally held by women). Both New Zealand and overseas studies found that the service sector has by far the highest proportion of casual workers, at a third or higher. These studiesalso indicate that the workplaces where demand is seasonal also have a far higher share of casual workers.

Characteristics of persons associated with precarious non-standard

employment conditionsOverseas research is generally in agreement on the characteristics of workers in precarious non-standard jobs. In short, precarious workers, or those at risk of precariousness, are more likely to be women, young, an ethnic minority, and less-skilled and -educated.

1 This leave is accrual based and therefore a situation may arise where a casual, temporary or fixed-term worker, despite working for the same employer for a year or more, may not meet the qualifyingcriteria for these benefits if their contract is repeatedly renewed after short intervals.



International and New Zealand evidence suggests that men are more likely to be inhigher end forms of non-standard employment, such as independent contracting andconsulting, while women are predominant in the lower end forms, such as casualwork.

Explanations for the prevalence of non-standard work Explanatory factors identified as contributing to the growth of non-standard

employment can be referred to as supply-side, demand-side and institutional factors.Whilst these “pure” types are conceptually distinct, the explanations, in practice, aregenerally some combination of the three. Labour demand factors includetechnological and structural change; supply-side factors relate to changing socialattitudes and demographic changes such as family structures; and institutional factorsinclude changes to employment legislation and other regulatory arrangements.

These factors do not necessarily interact in equal ways. New Zealand andinternational research indicates that supply-side factors are more likely to predominatefor the higher end non-standard arrangements, such as self-employment and part-timework (Bururu, 1998; Carroll, 1999; Mangan, 2000). For the lower end of non-

standard work, however, the picture is considerably more complex. There is a highdegree of preference for a flexible schedule due to family, school, training or other personal obligations, although demand-side factors do appear to predominate for themajority (US Bureau of Labour Statistics). That is, the majority would prefer to be ina permanent job and are less satisfied with their jobs than standard workers (OECD,2002).

Other hypotheses considered in the literature include bargaining power and unioninfluence. Lower end non-standard jobs are more likely to have a higher proportionof people with limited personal bargaining power. Bargaining power over wage andnon-wage conditions may also operate differently in the low wage labour market.

Workers in these jobs have little to bargain with if they are low skilled, have noqualifications, have skills that are widely available or (particularly for women withyoung children) are only available at certain hours.

In general, there is little empirical information available on the relationship betweenunions and the level of non-standard employment. Hypotheses that exist in theliterature are that:

• A decline in union influence would have a likely reduction in worker bargaining power (this effect could be intensified, given that non-standard workers are lesslikely to be collectivised)

• Declining union influence may have contributed to the increase in non-standard

working arrangements.

Findings from an empirical study by Wooden and Hawke (1998) indicate that the presence of ‘active’ unions in the workplace appears to impede the use of casualemployment.

Potential policy concernsThe review examines the literature’s assessment of the economic and socialimplications for those in ‘lower end’ non-standard work. It addresses earnings



inequalities, employment relations, health and safety issues, workplace training,implications for trade unions, labour market outcomes, and family and other socialissues.

Earnings differentials

Wage inequalities between standard and non-standard workers are the subject of agreat deal of attention amongst researchers overseas. In the main, the empirical

evidence shows the wage differentials to be significant, with most types of non-standard workers earning considerably less than standard workers. When theindustries and the characteristics of the workers (such as age, education, skill levelsand occupation) are also controlled for, the wage differentials for temporary workersare still statistically significant (see OECD, 2002).

Employment relations

Non-standard working arrangements can impact on employment relations in a number of ways. Research is limited in this area. There is some New Zealand case-studyinformation to suggest that non-standard employees (with the exception of the higher end group) fare worse than standard employees in the negotiation of employment

contracts (Whatman et al ., 1999). The Survey of Labour Market Adjustment under the Employment Contracts Act (Department of Labour, 1997) found that awareness of wage and holiday provisions tended to be lower than average among those oninformal contracts and young employees, and casual employees tended to be lessinformed than permanent employees on minimum wage conditions.

Health and safety

The overseas literature indicates that the impact of increased non-standard work onworkplace health and safety deserves greater attention. The European Agency for Health and Safety at Work found greater health and safety risks associated with non-standard employment in their quantitative and case study research. They found that

precarious workers are more exposed to physical work hazards, may experience stressfrom insecurity, and may be more difficult to reach to provide OSH services than permanent workers. The Agency’s case study research indicates a transferral of work-related risks to non-permanent employees and to subcontractors, meaning that theseworkers do the dirtiest, the most dangerous and the most monotonous jobs.

Training

Overseas empirical studies point to a significant difference in training, particularlyexternal employer-supported training and in-house training courses, between casualemployees and permanent employees. Casual employees are also less likely to participate in informal on-the-job training and the data suggest the gap is not

narrowing (Campbell, 2001).

The OECD (2002) reports similar results from 12 European countries, but suggeststhat informal on-the-job training (which they do not measure) may give a more positive picture of the amount of training received by temporary workers. They stressthat temporary jobs offer work experience, irrespective of whether formal training isoffered, and thus contribute more to human capital accumulation than non-employment.



Labour market outcomes / mobility

It is important to look at mobility into and out of precarious jobs in order to determinewhether they are ‘stepping stones’ to standard work or whether they are ‘traps’. Theissue of precarious employment and job mobility is extremely important in terms of lifetime worker welfare. This is an area of intense research interest, and while anumber of studies in this review are pessimistic, others are less so, suggesting thatthere is evidence of both propositions.

The OECD (2002) finds evidence from European countries to suggest that aconsiderable share of temporary workers move into permanent jobs over a relativelyshort time period, which is consistent with the stepping stone metaphor, while othersstay in temporary employment or become unemployed.

US studies (Houseman, 2000; Lane et al., 2001) find empirical evidence suggestingthat few temporary jobs lead to permanent employment, and there may be a cyclingeffect; that is, temporary workers moving back and forward between the states of unemployment and temporary work. New Zealand data on benefit exits into work indicate a cycling effect in some rural areas where seasonal employment may be a

significant part of the labour market.

Lane et al . (2001) argue that assessing the outcomes of ‘at-risk’ non-standard workersdepends on whether the comparison group is standard workers or nonemployedworkers. They find that individuals in temporary work had worse earnings andemployment outcomes a year later than individuals in standard employment; yetindividuals in temporary work fared substantially better a year later than did similar individuals in nonemployment. This is similar to Heinrich et al . (2002) who explorethe effects of temporary help firms on the labour market outcomes of welfarerecipients and conclude that, overall, those in temporary help jobs have significantly better future prospects than those who remain on welfare.

In contrast, a UK study on low pay2 (Stewart, 2000) finds that the impacts of unemployment and low pay are not dissimilar and that the low paid are more likely to become unemployed in the future. Likewise, Richardson et al .’s (2002) review of theliterature argues that there is little support for the view that any job is better than no job in improving prospects for future employment or escape from low wage jobs.

The issue of whether outcomes for lower end non-standard workers are relatively better or worse than for those who are unemployed or in standard employment, andwhat the transition paths are over time, are key areas for further investigation in NewZealand.

Social and psychological consequences

Finally, whilst international research into the social and psychological consequencesof precarious work is limited, available studies do show that problems areexperienced, both by the worker and their families. International and New Zealandstudies point to greater personal costs associated with these work forms, and

2 While low wage jobs are not the same as temporary jobs, it is argued that people in low end non-standard jobs are the same people that other studies identify as receiving low pay (Brosnan and Scully,2002).



demonstrate more problems with health, personal and family relationships, quality of life and general well being.

Where to from here?In presenting a framework for analysing precarious work, and evidence on itslocation, this review lays the groundwork for future research in the area. It is clear from the review that an area for further consideration is the very limited quantitative

and qualitative data on casual, temporary and fixed-term employment in NewZealand.

Other key areas where information gaps exist include:

• Demand and supply factors – what drives employer/employee behaviour? Whatare the issues around bargaining power and worker preference?

• Institutional factors – what are the effects of institutions and regulatoryarrangements on the incidence of non-standard/precarious work? Do increasedregulations lead to increased or decreased demand for non-standard/precariousworkers? What are the costs and benefits of policy responses in this area, and are

targeted measures to shield workers from undesirable employment conditionsmore or less effective than general measures?

• Union influence – what is the relationship between unions and the level of non-standard employment?

• What are the impacts on the wage progression and skill acquisition of precariousnon-standard workers and, more generally, on the labour markets where theseforms of work are prevalent? What are the policy concerns in New Zealand withrespect to earnings differentials, health and safety, workplace training andmobility, employment relations and family and other social and psychologicalissues?

In order to address these knowledge gaps, one-off and repeated cross-sectionalsurveys would be useful to collect quantitative information (and possibly qualitativeinformation on outcomes and preferences). The most important starting point would be to determine the incidence and scope of precarious non-standard jobs in NewZealand.

It would be useful for data collection to have a longitudinal dimension to track patterns over time and examine issues such as occupational mobility and the degree towhich these jobs may be traps or stepping stones. The consequences of precariousemployment will be quite different if the same group of workers are in these jobs

throughout their working careers, as opposed to a situation where all workers duringtheir careers ‘cycle’ through these jobs for a short amount of time.

Longitudinal data could also capture information on whether the outcomes for lower end non-standard workers are relatively better or worse than for those who areunemployed or in standard employment and what the transition paths are that peopletake between these states over time. From a policy standpoint, this is a key area for future investigation in New Zealand.



1. Introduction

There is general concern about the growth in ‘precarious’ non-standard employmentin most developed countries in recent decades. Until recently, in response to highunemployment, job creation was at the forefront of the labour market policy agenda,as opposed to job quality per se. At the end of the 1990s this attitude towards jobquality had changed among policy-makers in some parts of the developed world andsome international institutions. In 1999, the ILO launched a new agenda for action,the primary goal of which was decent work . One year later, in March 2000, theEuropean Council in Lisbon adopted the twin goals of full employment and jobquality for the European Union in the first decade of the new millennium. TheEuropean Union views the issue of quality of work as having clear links with the topicof non-standard employment.

The general literature on ‘non-standard’ employment (employment that is not full-time and permanent) identifies an increase in the proportion of workers engaged innon-standard work. The OECD (2002) points to an increase in ‘temporary’employment, defined as ‘dependent employment of limited duration’, in aconsiderable number of OECD countries in the past two decades. Likewise, non-standard employment in New Zealand has been gradually increasing over the past 15years, as shown by data on part-time work and self-employment.

While many workers engaged in non-standard work enjoy good incomes, job stability,adequate protections from health and safety risks in the workplace and opportunitiesfor training and development, some do not experience such conditions. Some may bein ‘precarious’ jobs, that is, work with low wages, low job security, higher health andsafety risks, little or no control over workplace conditions or hours of work, andlimited opportunity for training and skill development.

Figure 1: Part-time employment and self-employment

0

100

200

300

400

500

1986 1988 1990 1992 1994 1996 1998 2000 2002

n u m b e r o f p e o p l e ( 0 0 0 s )

Self-employed Part-time employed



Evidence suggests that the former category are more likely to be self-employed or part-time; those in the latter are more likely to be temporary or casual workers. Thisis not to say that temporary or casual jobs are necessarily precarious, or that precarious jobs do not exist in other forms of non-standard or standard work.

There are two general approaches that can be used when attempting to define precarious employment. The first treats precariousness as a subset of non-standard

employment, whilst the other examines the characteristics of all jobs and defines precariousness on a case-by-case basis (Burgess and Campbell, 1998a).3 Whilst werecognise that some standard jobs may be precarious, this review takes the firstapproach for several reasons – to focus on the areas of employment where we havethe least knowledge and data in New Zealand; to limit the scope of the research for reasons of practicality; and, primarily, to focus on the types of employmentconsidered to have a higher risk of being precarious, ie casual and temporary work.

International studies suggest that many casual and temporary workers find their employment less favourable than standard employment (European Foundation, 2002;OECD, 2002; Dawkins, Simpson and Maddeen, 1997; Meuders and Tytgat, 1989).

Job insecurity and the associated financial insecurity are highlighted as disadvantagesfaced by casual and temporary workers. In most countries, non-standard workers donot benefit from the same statutory rights as permanent workers and in many cases areworse off in terms of remuneration, especially when they are not party to collectiveagreements.

1.1 Objectives of the Review

The aim of the review is to examine ‘precarious’ non-standard work, focussing on‘lower-end’ non-standard employment, ie, casual, temporary and fixed-termemployment arrangements. The review aims to organise a working definition of

‘precariousness’ that has relevance in the New Zealand context and that can beapplied to lower end non-standard jobs, making it possible to measure precariousnessin New Zealand. Precariousness is a useful concept if applied in this way as it doesnot presume that certain types of employment are precarious per se; it takes intoconsideration a number of variables and acknowledges there are varying degrees of precariousness which may or may not present a problem for the individual concerned.

The review proposes to draw together information to assist with the followingquestions:1. What is ‘precariousness’?

- What are the alternative perspectives on how the concept of ‘precarious’ work

should be defined and what is an appropriate framework for New Zealand?2. Where is it located?

- by industry, occupation and composition- what are the characteristics of people associated with precarious non-standard

work?

3 Burgess and Campbell (ibid ) argue that the first approach treats non-standard employment asnecessarily precarious, whereas the second approach is more comprehensive, as it concentrates ondeveloping precariousness as a concept that can be used to assess the attributes of all forms of employment, both standard and non-standard. This approach sees all jobs as being precarious to somedegree.



3. What determines the extent of non-standard work, what contributes to its growth,and why do employers and workers use it?

4. Why are we concerned with precarious non-standard work?- What are some of the potential policy concerns for those in precarious non-

standard work arrangements?- what are the labour market outcomes for precarious non-standard workers (are

these jobs ‘stepping stones’ or ‘traps’)?

1.2 Structure of the review

Section 2 defines the characteristics of non-standard work, with particular emphasison the types of arrangements that may generate precariousness. It also identifies thedefinitional and measurement problems inherent in this area of work.

Section 3 examines precariousness as a concept, and looks at ways of operationalisingit in the New Zealand context in order that it could be used as a research tool. Itsuggests ten indicators for precariousness.

Section 4 summarises the literature and empirical evidence on the location of precarious non-standard employment by industry and occupation. It then examinesevidence on the characteristics of people more likely to be in these employmentarrangements and the prevalence by gender, age, ethnicity, and skill levels.

Section 5 is concerned with the determinants of non-standard employment and thesupposed factors that contribute to its growth. It addresses demand-side, supply-sideand institutional explanatory factors, the issue of bargaining power, and employer andemployee motivations for non-standard employment arrangements.

Section 6 looks at why we are concerned with precarious non-standard work and what

some of the policy concerns might be with regard to employment relations, health andsafety, training, work-family and other social and economic issues. It examines theempirical data available on the mobility of precarious non-standard workers – whether their jobs are ‘traps’ or ‘stepping stones’ to better jobs.

Section 7 concludes the review. It summarises the findings and potential policyconcerns and looks at where the knowledge gaps are for New Zealand and the types of research that would be useful to address these gaps.

1.3 Definitions and measures

There are major definitional and measurement problems in the area of non-standardwork. The terminology used varies widely between countries as does the definitionand ways of measuring non-standard work. The diversity of concepts used bydifferent countries and by different authors makes comparison difficult and it becomesquickly evident that standard definitions are lacking both within countries and incross-country comparisons.

For example, the US Bureau of Labor Statistics (BLS) refers to ‘contingent’ workers,defined as those who do not perceive themselves as having an explicit or implicitcontract for ongoing employment. The Australian Bureau of Statistics (ABS) refer to



‘casual’ employees, defined as workers not receiving certain benefits, which is aconsequence of their casualness, not the defining feature. The defining feature is their legal status as new short-term hirees (even if their de facto status is otherwise).

The International Labour Organisation4 (ILO) defines ‘precarious’ workers as either:

(a) ‘workers whose contract of employment leads to the classification of theincumbent as belonging to the groups of “casual workers”;

(b) “short-term workers” or “seasonal workers”; or

(c) workers whose contract of employment will allow the employing enterprise or person to terminate the contract at short notice and/or at will, the specificcircumstances to be determined by national legislation and custom.

The ILO defines ‘casual’ workers as having an explicit or implicit contract of employment which is not expected to continue for more than a short period. This issimilar to the definition of ‘contingent’ work used in the US.

The OECD refers to ‘temporary’ employment as an umbrella term for all “dependentemployment of limited duration”, which includes fixed-term contracts, temporaryagency work, contracts, seasonal work, on-call work and trainees. All other jobs arereferred to as “permanent” jobs.

The OECD usefully collates the definitions of temporary employment used by variouscountries in their labour force surveys (see Appendix One). This shows the variabilityof definitions between countries and illustrates the difficulties and limitations of cross-country comparisons. Further emphasising this, Appendix Two presents thedefinitions of temporary employment used by the OECD (2002) in its recent paper referred to in this review. For 28 countries they have selected the sub-categories of employment available in national statistics that appeared best suited to approximate aninternationally consistent definition.

In the New Zealand context, for the purposes of this review, the terms casual andtemporary (the latter which will also embrace the concept of fixed-term work), or theembracing concept of ‘lower end’ non-standard work, will be used. We utilise thedefinitions given in Brosnan and Walsh’s (1996: 160) two New Zealand workplacesurveys, as shown in the table below.

Table 1: Definitions used in this review

Casual workers Employees hired on a periodic basis as need arises.Temporary workers Employees taken on for a relatively short but

unspecified period.Fixed term workers Employees on a contract with a specified expiry date or employed to complete a specific project.Contractors/consultants Persons that are not direct employees whocontract to provide labour services to an organisation (whether or not theyown their own tools or equipment).

4 In January 1993, the ILO sponsored International Conference of Labour Statisticians made aresolution Concerning the International Classification of Status in Employment (ICSE-93)(http://www.ilo.org/public/english/bureau/stat/res/icse.htm).



2. What is non-standard employment and what

forms are most likely to generate

precariousness?

This section sets out to define non-standard employment and discuss its growth. It

also presents an overview of debates from commentators challenging the ‘growth’assumption or the ‘casualisation thesis’ as it is also referred to. The information wehave on non-standard work in New Zealand is then reviewed, with specific referenceto casual, temporary and fixed-term work. Aspects of part-time work and self-employment, including contract work, are also discussed.

Non-standard employment covers a wide range of employment relationships and awide range of employees with varying characteristics. Non-standard workers areengaged in a variety of occupations, they work varying numbers of hours, and differ widely in experience and education. Their income, status afforded, work security, benefits, terms and conditions, and motivation for engaging in non-standard work will

also differ greatly.

As with the various categories of non-standard work, the distinction between standardand non-standard work is murky and there are many variations in how the two areconceptualised and defined in the literature. Some forms of ‘non-standard’ work suchas part-time work, are so prevalent as to be ‘standard’. Rather than presenting anexhaustive account of the debates in the literature, this paper will, arguably somewhathastily but in the name of pragmatism, accept the definitions used by previous NewZealand commentators in the area (Brosnan and Walsh, 1996; Carroll, 1999;Whatman, 1994), which are generally consistent.

Firstly, in seeking to define non-standard employment, it is useful to define whatmakes employment standard.

According to Campbell (1991) and Burgess (1994) standard employment possesses aset of characteristics that translate to full-time, permanent, on-site and wagedemployment.

This is similar to Whatman (1994: 356) who defines standard work as work that meetsall of the following criteria:

• full-time (30 or more hours per week)

•

in a permanent job (that is, an expectation of continuing employment)• regular hours5

• over the whole year

• for someone else

• primarily at that employer’s premises.

5 The criteria of ‘done in daylight hours’ and ‘on weekdays’ ie, excluding shiftwork could also beincluded here.



Non-standard work includes all those jobs that fall outside this definition of standardemployment, for any of the following reasons. That is, they may be:

• part-time

• casual

• irregular hours or on-call work

• seasonal, temporary or fixed term contracts• self employment

• undertaken as ‘homework’

• undertaken in the ‘black’ economy

• any combination of the above.

Brosnan and Walsh’s (1996) definition of standard employment is similar but, inaddition to permanent and full-time work, they also include working standard hourson, or from, the employers premises between 7am and 6pm between Monday and

Friday.

2.1 Context – increasing non-standardisation of the international

labour force

The majority of the international literature on non-standard employment identifies ageneral increase in the proportion of workers engaged in non-standard employment indeveloped countries during the past two decades (Mangan, 2000; Rodgers andRodgers, 1989; Barker and Christensen, 1998; OECD, 2002; ILO, 1997).

Indeed in Australia, the apparent growth in non-permanent or casual employment has

been widely claimed to be one of the most significant changes to the Australian labour market over the last decade or so (Campbell and Burgess, 1993; Norris, 1993;Campbell, 1996a, Norris and Wooden, 1996, cited in Wooden and Hawke, 1998).

In the US, current research indicates that one in ten workers are employed in analternative work arrangement – temporary help, independent contractors, on-callworkers, and contract company workers. Moreover, employment in the temporaryhelp services industry grew five times as fast as overall (non-farm) employment between 1972 and 1997 (Lane et al., 2001), although this growth tapered significantlyin the second half of the 1990s, growing at less than four times the average of totalnon-farm employment (Dillingham, 2000).

It is widely argued that non-standard work forms are not new (Mangan, 2000; Lane et

al., 2001; DoL, Canada, 1997). They were common until the 1940s, declined inimportance during the economic growth years of the 1950s to the mid-1970s, and re-emerged in the late 1970s. This was due in part to an expansion of part-time work and the beginnings of corporate downsizing in the 1970s and 1980s. Since then non-standard work forms have continued to gain momentum. Applebaum (2001: 23)asserts that the US has always had a large, low wage secondary labour market, andthat women, minorities and immigrants have always been disproportionatelyemployed in insecure jobs lacking benefits or opportunities for mobility.



What is new today is the increase in the proportion of non-standard work in newlycreated jobs, and the inclusion of widely differing types of workers and work arrangements. The social and cultural context has also changed dramatically, for example, increased participation by women in the workforce, dual-earner families,more people studying, shop trading hours, and new migrant communities.

2.2 The extent of non-standardisation … differing viewpoints

An important strand of the research argues that non-standard employment has notincreased, or not to the extent that some researchers have argued. Problems withvarying and inconsistent definitions and measurement methods are largely responsiblefor this, as well as the political nature of the issue. This section discusses some of these differing viewpoints.

Definitional problems and variations exist not only between countries, but also withincountries. For example Murtough and Waite (2000a) of Australia’s ProductivityCommission believe the data collected by the Australian Bureau of Statistics (ABS) is

problematic and responsible for the ‘casualisation thesis’. The problems with the‘casuals’ data, they argue, are that the types of employment identified are very broad.For example, many owner managers are treated as employees and the terminology can be confusing. They challenge the work of Australian labour market analysts, such asCampbell and Burgess, who use the ABS data in statistical analyses.

In response, Campbell and Burgess (2001) acknowledge limitations with the data, butargue against the validity of some of the decisions by Murtough and Waite (2001)such as the counting of self-identified casuals only without factoring in theemployment contract and working conditions, and the attempted exclusion of thosewho are not ‘true’ casuals (see Australian Bulletin of Labour , June 2001). The ABS is

aware of the conceptual murkiness in defining casual employment, and in its mostrecent set of figures (August 2000) abandoned the use of the label ‘casual’ for themore cumbersome ‘employees without leave entitlements’ (ibid ).

In the US, the term ‘contingent’ has been used for many years to describe a variety of non-standard work arrangements. Some definitions of contingent work have focussedon work considered contingent because of the low level of job security provided,whilst other definitions are broader and include such work arrangements as part-timeemployment and self-employment.

For this reason, estimates of the size of the contingent workforce range from four

percent of the total workforce using the BLS definition (2001),6

to almost 30 percentwhen workers in other categories are added (GAO, June 2000).

A US Department of Labour report (Houseman, 2000) argues that point-in-timeestimates of the number of agency temporaries and short-term hires mask much larger flows into and out of temporary jobs: “The data indicate that the number of positions

6 (http://stats.bls.gov/news.release/conemp.nr0.htm)



created for agency temporaries7 during a year is seven to eight times the number of temporary agency jobs likely to exist at any point in time, while the number of short-term hires8 during a year is five to six times greater than that captured in a point intime survey” (Houseman, 2000: 7).

Callister (1997) in his review of research evidence on trends in employees’ tenure,turnover, and work scheduling patterns, concludes that predictions and perceptions of

very rapid growth in temporary and casual work appear to be exaggerated. He arguesthat there is not strong evidence of growth in ‘casual’ work, however, in somecountries temporary and fixed-term work has been of some significance. Thisincludes Australia, the UK, New Zealand and the US.

Whilst there is debate about the extent of non-standard employment, there is generalagreement that, in most countries, non-standard employment has increased. TheOECD (2002) concludes that temporary jobs are now a significant feature of theemployment landscape in most OECD countries. Section Five looks at some of thereasons behind this.

2.3 Specific forms of non-standard employment and trends in NewZealand

Little is known about non-standard employment in NZ, particularly casual, temporaryand fixed term employment arrangements. Statistics New Zealand, through theHousehold Labour Force Survey, Quarterly Employment Survey and Census, collectdata on part-time and self-employment but not on casual, temporary or fixed-termwork.

Carroll’s (1999) work examining recent trends in non-standard employment foundthat some forms of non-standard employment have been growing at a faster rate than

standard employment in the period from 1985 to 1998, including part-time work andself-employment. Of non-standard employees, part-time workers were the largestsingle category, making up 19 percent of total employment in 1998. The next largestnon-standard employment group was employees working 50 or more hours per week,making up 13 percent of workers in 1998. Other significant groups of non-standardworkers were employers, making up eight percent, and the self-employed, making up12 percent of the workforce in 1998.

2.3.1 Casual, temporary and fixed-term work Temporary and casual employment have often been identified as the two most precarious forms of non-standard employment. They are often associated with a

shortfall in protection in terms of employment rights, benefits and other forms of protection.

Casual employees, in particular, can experience highly variable working hoursarrangements, both in terms of their length and their timing. Campbell (2000),

7 Defined by Houseman (2000: appendix) as “Individuals who work at the establishment but who are paid through an employment agency and are not on the organisation’s payroll”.8 “Individuals who are employed directly by the organisation for a limited and specific period of time…” (ibid ).



arguing on the basis of increasing casualisation9 of the Australian workforce, viewscasual work as significant because of what is known about the conditions of casual jobs. Apart from what, in practise, amounts to non-entitlement to benefits, he arguesthat casual workers are also vulnerable to low pay and numerous forms of labour insecurity, such as income, working-time and representation insecurity. “In short,casual employment is characterised by shortfalls in protection and substantivedisadvantages over most of the dimensions of what can be termed ‘precariousness’ in

employment” (Campbell, 2000: 73).

In Australia, the rationale for the exclusion of employer-funded benefits such as paidholiday and sick leave is that, under common law, casuals are deemed to be employedon a new contract at every engagement, and so are unable to accrue the requiredcontinuous service with an employer (Wooden and Hawke, 1998: 84).

In terms of labour market functioning, temporary employment is particularlyimportant at the margin and, according to Rodgers (1989: 6), disproportionatelyaffects new labour market entrants and those re-entering work after unemployment.

Whether this has a positive or negative outcome depends on both the nature of theworker and the job combined. For many workers, a temporary attachment to thelabour market may suit their living arrangements. For example, they may be semi-retired, a student, a parent, or suffering from ill-health. If they are new to the labour market they may wish to ‘job shop’ or gain work experience and develop contactswith the aim of securing a permanent job.

Brosnan and Walsh (1996) have undertaken the most detailed New Zealand study intonon-standard employment, using data from employer surveys: one of 2000workplaces in 1991 and another of 5,200 workplaces in 1995.10 The proportion of workers in casual, fixed-term or temporary employment was 11 percent for both

years. This proportion was higher for women (at 14 percent). More men werecontractors and apprentices than women, while more women were fixed-termworkers.

Fixed-term employment almost trebled from 1.1 percent in 1991 to three percent of the workforce in 1995. Temporary employment rose from 1.7 percent of theworkforce in 1991 to 2.6 percent in 1995. Most of that increase was in part-timetemporary work, which nearly doubled in the period analysed.

Surprisingly, casual work declined, falling from eight percent to five percent between1991 and 1995. The authors give two possible reasons for this decline. The first is

that during an economic recovery employers move away from casual employment.The second is that under the Employment Contracts Act it became cheaper to employ

9 Campbell (2000:68) defines casualisation as an increase in the proportion of employees under a‘casual’ contract of employment.10 The response rate was 33 percent in 1991 and 38 percent in 1995. This is lower than the level thatStatistics New Zealand would deem acceptable. Nonetheless it is a high rate of response for avoluntary anonymous postal survey without follow-up, for which a response rate of 20 percent isusually considered satisfactory. The data were collected from employers only rather than from the population. The authors assert that the weighted data corresponded closely with official figures fromthe Household Labour Force Surveys (HLFS) for June 1991 and June 1995 and points of comparison between the survey and HLFS showed very little variation.



full-time permanent workers for longer hours because of the elimination or substantialreduction in penal and overtime rates. This was preferred to the employment of a just-in-time casual workforce with its attendant management difficulties. Theysuggest further analysis would be needed to reach firm conclusions about this (ibid ).11

Overall, the data showed that expectations of “a pronounced shift to non-standardemployment …were not substantiated …[and] … must be viewed with some

scepticism” (ibid : 165). On the other hand, responses to a question on expectations of workforce changes over the following five years found there was a greater expectationof an increase rather than a decrease in the employment of non-standard workers, particularly in respect of casual employees.

The Department of Labour’s 1993 and 1997 Survey of Labour Market Adjustment

Under the Employment Contracts Act found 11 percent of the workforce to be casualemployees on either a full-time or part-time basis in both 1993 and 1997. This phonesurvey of 2,000 employees distinguished between casual and permanent employment(rather than between casual, temporary and fixed-term employment), as does thecurrent evaluation of the Employment Relations Act (ERA) by the Department. The

ERA evaluation will provide some quantitative data on the scope of casual work in New Zealand and evidence of the employment relations implications for casualworkers. Due to the survey not being designed, primarily, to answer questionsregarding casual and temporary jobs or precariousness, the generalisability of thefindings to a wider casualised workforce will be limited.

2.3.2 Part-time and self-employment in New Zealand

This section briefly presents the notion that much part-time and self-employment is of a voluntary nature, and that therefore the growth of both these forms of non-standardwork is not in itself a cause for policy concern. Of course, this is not always the case.As with the notion of precariousness, there exists the same continuum across the

spectrum of standard and non-standard jobs in terms of degrees of insecurity or precariousness. For example, some forms of self-employment such as ‘dependent’contracting may have elements of precariousness associated with them, and somecontractors in the forestry industry, for example, may be at risk of being in precarious jobs. In addition, there are those who have become self-employed as the onlyalternative to unemployment.

Both part-time and self-employment have been steadily increasing over the past 15years, relative to total employment.

11 Interestingly, a smaller firm survey of the Employment Contracts Act by the NZ Institute of

Economic Research (Savage and Cooling, 1996) found, in contrast, that the Act appeared to have someeffect on the ability of employers to hire casual staff. A net 29 percent of respondent companiesreported an increase in casual employment under the Act, with the largest increases coming frommanufacturers and builders and services. (A total of 1,300 surveys were posted to recipients of theQuarterly Survey of Business Opinion (QSBO), of which 562 usable responses were obtained.)



Part-time work is the most prevalent form of non-standard work.12 New ZealandHousehold Labour Force Survey (HLFS) data indicates that most people who work part-time choose this over full-time work. Only six percent of people who areemployed part-time report that they would prefer to be working full-time, althoughnearly a third said they would prefer to work more hours (Carroll, 1999).

Therefore supply-side factors dominate for part-time work in New Zealand and this isconsistent with analysis of data in overseas countries (Mangan, 2000;13 ILO, 1997).However, data also indicates that involuntary (demand-side determined) part-timework is on the increase, particularly among prime-aged males and entry-level workers(Mangan, 2000).

Notwithstanding this, much regular part-time work is also permanent and is less likelyto meet the characteristics of precariousness – there is often secure tenure and stabilityaround hours and the employee is more likely to have a knowledge of the health andsafety risks associated with the workplace because an ongoing relationship exists.

The self-employed can also be split into two categories according to supply- anddemand-side factors. That is, those that choose to be self-employed and those that are pushed into self-employment. Many self-employed may be redundant workers – theyuse their redundancy pay to buy a small business.

Bururu (1998) uses Census data and HLFS data to conclude that in New Zealand,much like in other Western countries, the ‘pull’ (or supply-related) factors such asindependence and the possibility of financial rewards appeared to be stronger than the‘push’ (or demand-related) factors such as unemployment and family circumstances.

12 Between the 1991 and 2001 censuses part-time employment increased by 60.2% (149,900 jobs)compared to full-time work which increased by 15.4% (176,900 jobs). The increase in part-time work has been greater among males than females, increasing 83% (50,400 jobs) compared to 52.8% (99,500 jobs). Women still account for 72.1% of part-time workers.13 Mangan (2000) argues that these supply-side factors may be a passive acceptance of family and other circumstances rather than a whole-hearted embracing of part-time work as an ideal concept.

Figure 2: Percentage share of total employment

0

5

10

15

20

25

Self-employment Part-time employment

% s

h a r e o f e m p l o

y m e n t

1986

2002



2.3.3 Contractors in New Zealand

Contractors belong to the self-employed category. Commentators differentiate between ‘independent’ self-employed contractors, and ‘dependent’ self-employedcontractors. According to Greene (2000) dependent contractors fall into the ‘grey’area between employees and independent contractors. A ‘dependent’ contractor is acontractor who is dependent upon one source or employer for the majority of all of his/her income. The dependent contractor brings to the exchange labour and capital

by way of equipment and tools and/or vehicles (ibid ).

Greene (ibid ) reports that in New Zealand employers are opting for independentcontracting arrangements, whether by contracting out to existing external providers,or by ‘converting’ employees into independent contractors. The advantages includethe transfer of risk and liability and the avoidance of (perceived) dismissalcomplexities. Greene argues that some forms of ‘contract labour’ are clearlydisadvantaged and their true status is likely to be an employee.

Independent contractors in New Zealand are not afforded employment protection suchas that provided by the minimum employment standard legislation, for example, the

Holidays Act.

2.4 Non-standard employment relations in New Zealand

While non-standard employment relations have been a feature of the New Zealandlabour market for some time, the introduction of the ERA 2000 resulted in someclarification to the nature of non-standard employment relations and widely publicisedsome issues relating to the use of non-standard employment arrangements. Casual or part-time employees, fixed-term employees and homeworkers continue to be affordedthe protections of 'employees' under the ERA (see Appendix Three for a summary of current employment protections). Most notably, the protections for employees on

fixed-term contracts were strengthened under the ERA - employers using suchagreements must have a genuine reason for doing so and can not use a fixed termarrangement when the job is really a permanent one. However, whether the increased protection and publicity has resulted in less use of these types of arrangements, or whether non-standard workers are aware of their rights is not clear.14

The next section seeks to define precariousness and possible indicators for use in a New Zealand context.

14 Further proposed research and the Department’s current evaluation of the ERA will address theseissues.



3. What is Precarious Employment?

Changes in the quality of employment can be analysed from a number of different perspectives, including income, job security and employment conditions. Theconcept of ‘precariousness’ in employment is a catch-all term that attempts toencompass the full range of attributes associated with employment quality (Campbelland Burgess, 1998a: 6).

‘Precariousness’ is not a common term in New Zealand, but is discussed as a conceptin academic and official reports in Australia, the US, Canada and Europe. Interest in‘precarious’ employment reflects concerns that there are a growing number of unstable, low-paying and unregulated jobs emerging across the OECD.

One of the key problems with the concept of precariousness is that there is nocommonly accepted definition in the literature. There are also a variety of terms usedthat may refer to precarious work, such as ‘insecure work’, ‘contingent work’ or ‘casual work’. As Campbell and Burgess (1998a: 10) note, its inherently ‘fuzzy’nature puts it at risk of being non-operational. They advise that, in order to anchor the

concept in empirical application, ‘criteria’ are required by which employment can beclassified as being precarious.

Many researchers in the field refer to Rodgers and Rodgers’ (1989: 3) suggestion thatthere are several dimensions to precariousness and different degrees of precariousness. The dimensions, or characteristics, of precarious jobs are as follows:

• degree of certainty of continuing work – precarious jobs may have short timehorizons, be of limited duration or have a high risk of termination

• aspect of control over work – the less the worker controls working conditions,wages or the pace of work the more insecure the work is

• protection – to what extent are workers protected, either by law or throughcollective organisation, or through customary practice – against, for example,discrimination, unfair dismissal or unacceptable working practices

• low income – a somewhat more ambiguous aspect, low income jobs may beregarded as precarious if they are associated with poverty and insecure socialinsertion.

Thus, the concept of precariousness involves instability, lack of protection, insecurityand social or economic vulnerability. This does not, however, eliminate ambiguity.An unstable job is not necessarily precarious; rather it is some combination of these

factors which causes precariousness, and the boundaries around the concept can besomewhat arbitrary.

Burgess and Campbell (1998a) suggest that it is possible to develop a preliminarydefinition of precariousness in terms of low levels of pay and high levels, despite thefact that no fixed definition of precariousness has yet been commonly agreed upon.They regard labour insecurity, as manifested in a range of dimensions, as the keyoperational characteristic of precariousness in employment and outline eight ‘forms’or ‘dimensions’ of labour insecurity (see Table 2).



Table 2: Forms of labour insecurity

Employment Insecurity – when employers can dismiss or lay off workers, or putthem on short time without great difficulty or costs.Functional Insecurity – when employers can shift workers from one job to another at will or where the content of the job can be altered or redefined.Work Insecurity – when the working environment is unregulated, polluted or dangerous in some way, so that the ability to continue to work is at risk.Income Insecurity – when earnings are unstable, or when transfer payments arecontingency-based and not guaranteed, or when earnings are close to establishedpoverty lines.Benefit Insecurity – where access is limited or denied to ‘standard’ non-wageemployment benefits such as sickness, holidays and retirement.Working-Time Insecurity – when hours are irregular and at the discretion of theemployer, or where hours are insufficient to generate a minimum income.Representation Insecurity – when the employer can impose change in the labour process and refuse to negotiate with trade unions or with other institutions protectingworkers’ collective interests.Skill Reproduction Insecurity – when opportunities to gain and retain skills throughaccess to education and training are impeded.

Source: adapted from Standing, 1993: 425-426, 1997: 8-9, 18-22 cited in Burgess and Campbell, 1998: 11).

Burgess and Campbell (ibid ) see the virtue of the typology in its ability to incorporatea range of conditions that generate precariousness in employment. Some criteria arereadily operational and can be super-imposed on existing employment types, such ascasual employment and temporary employment. Other criteria are more difficult toapply, such as income and working-time insecurity. Individual jobs also can beassessed in terms of these measures. Some jobs may appear to be precarious on all or almost all of the measures and can be justly termed precarious jobs, whilst others may

appear to be precarious only in terms of one or two of the measures. Thus it is possible to imagine a continuum of precariousness.

As Burgess and Campbell (ibid ) point out, a limitation of Table 2 is the absence of asystem for ranking the criteria. Standing (1997 cited in Burgess and Campbell,1998a: 12) argues that the familiar concern with employment insecurity is misplaced,and that the two most crucial forms of insecurity for the future are in fact incomeinsecurity – which is tied to ‘working-time insecurity’ – and ‘representationinsecurity’.

3.1 Precarious employment indicators in a New Zealand context

Another practical technique we might apply, which is complementary to Table 2,draws on the ‘job quality count’ (Clark, 1998: 17), which is used to assess who hasthe “good jobs”. To calculate an overall measure of job quality, Clark suggestscombining the information contained in seven variables.15 This is done by counting

15 These seven variables are: pay; hours of work (both overwork and underwork); future prospects(opportunities for advancement); job security; how difficult the job is; job content (interest, prestigeand independence); interpersonal relationships (with co-workers and with management). These are allargued to be important parts of a good job, from the worker’s point of view, or of job satisfaction(Clark, 1998).



the number of aspects, out of these seven measures, for which an individual has a‘good job’. The resulting scale runs from zero, for someone whose job isdissatisfying on all seven of the measures, to seven for someone whose job is of ‘goodquality’ on all of the measures.

A similar technique could be used to calculate precariousness. Below are ten possibleindicators for precariousness which, combined, could be used to assess precariousness

and who has precarious jobs. A scale would run from zero, whereby a person’s jobcould not be considered precarious, to ten for an individual whose job is precarious onall ten measures. Potential indicators of precariousness we could use in the NewZealand context are listed in Table 3.16

Table 3: Potential indicators of precariousness

i. The job can be terminated with little or no prior notice by the employer.ii. Hours of work are uncertain or can be changed at will by the employer.iii. Earnings are uncertain or irregular.iv. Functions of the job can be changed at will by the employer.

v. There is no explicit or implicit contract for ongoing employment.vi. There is, in practice, no protection against discrimination, sexual harassment,

unacceptable working practices.vii. The job is low income – at or below the minimum wage.viii. There is little or no access to ‘standard’ non-wage employment benefits such

as sick leave, domestic leave, bereavement leave or parental leave.17

ix. There is limited or no opportunity to gain and retain skills through access toeducation and training.

x. The task performed or the health and safety practices at the workplace makethe job dangerous or unhealthy.

Some of these indicators relate to a shortfall in formal protection that an ‘employee’ islegally entitled to (see Appendix 3 for employment rights and minimum conditions of casual and fixed-term workers). If this was to occur, it could result from either a lack of willingness on the part of the employer to carry out their legal obligations, or a lack of knowledge of the legal entitlements.

There are also indicators that are important at the level of employment practice andwhich do not relate to the nature of the employment contract per se. The key one istraining – non-standard employment does not entail any formal impediment in accessto training (Campbell, 2001) or access to a healthy and safe workplace. The issue iscentred at the level of employment practice.

It is also important that an assessment of precariousness does not focus solely on the job itself or the nature of the contract but takes into consideration the characteristicsof the worker and worker preferences. Students may have a much higher preference

16 These are drawn, in part, from Table 2 and the Australian Bureau of Statistics, cited in Murtough andWaite (2000a).17This leave is accrual-based and therefore a situation may arise where a casual, temporary or fixed-term worker, despite working for the same employer for a year or more, may not meet the qualifyingcriteria for these benefits if their contract is repeatedly renewed after short intervals.



for temporary or casual jobs than adults who have completed schooling. It is theinteraction of the nature of jobs and worker preferences that determine whatconstitutes precarious employment.

The welfare impacts also depend on the preferences of those affected. For example,the precarious characteristics of a job would have greater adverse welfareconsequences for older workers with dependents than for young full-time dependent

students.

The incorporation of attitudinal questions into a survey on precarious employmentwould be an essential element. This would be the best way of working out the effecton worker welfare of each type of factor associated with precarious employment. Themethodology of asking questions about workers’ subjective assessment of their welfare outcomes from work is now seen as very credible within the labour economics field (Clark, 1996).

Differences in personal characteristics, including household situation and familyincome, are also important considerations. Precarious job traits such as irregularity of

income or hours are likely to have a different impact on a ‘second’ earner (for example, a woman working part-time in a high income household) than on a‘primary’ earner with dependents, or on a household with other precarious workers.

If we accept the above definitions of precarious employment, it is likely that somenon-standard jobs in New Zealand would be precarious. Anecdotal evidence fromthose working close to industry18 and case study and survey evidence does suggestthat some non-standard employment in New Zealand meets these characteristics of precarious jobs. This is discussed in the following section.

18 The Department of Labour’s Occupational Safety and Health inspectors and Employment Relationsstaff in the regions, employers and union spokespeople.



4. Location – workplaces, industries and persons

associated with precarious employment

conditions

Section 4.1 looks at where lower end non-standard work may exist in terms of

industry and occupations, whether it is more prevalent in the public or private sector and in large or small enterprises. It draws together international evidence, taking a broad initial sweep of industries and occupations before focussing specifically on particular sectors in New Zealand.

Section 4.2 examines the literature around the characteristics of people more likely to be associated with ‘lower-end’ employment.

4.1 Where are ‘lower-end’ non-standard workers located according

to international research?

Definitional issues arise in this section, given that overseas studies will assess variouscategories of non-standard work forms and may encompass a broader group than thecasual, temporary and fixed-term work forms that this review is focussing on.However, any definitional differences are highlighted in this and subsequent sections.The OECD data defines ‘temporary’ employment as dependent employment that doesnot offer workers the prospect of a long-lasting employment relationship. Thisincorporates our definitions of casual, temporary and fixed-term work forms, but alsoincludes contract work, trainees and persons in job creation schemes.

The OECD (2002) found that the highest concentrations of temporary jobs are to befound in agriculture and the unskilled (or ‘elementary’) occupations. These are

predominantly manual jobs typically held by men. However, less skilled, service jobs(ie, ‘pink-collar’ jobs such as retail sales clerks and secretaries), conventionally held by women, are more likely to be temporary than are the skilled, white-collar jobs and jobs in industry.

The US Bureau of Labor Statistics provides data on ‘contingent jobs’ (those withoutan explicit or implicit contract for ongoing employment), through a specialsupplement to the Current Population Survey (CPS).19 The February 2001‘Contingent and Alternative Employment Arrangements’ supplement obtainedinformation from workers on whether they held contingent jobs and was administeredto three-quarters of the CPS sample of 50,000 households. As in prior surveys,

contingent workers were spread across the different occupational groups. They were,however, far more likely to be in the services industries than noncontingent workers,with over half being employed in services (55 percent). They were also more likelythan noncontingent workers to be in administrative support, including clerical, and in precision production, professional speciality, and farming occupations. In additionthey were more likely than noncontingent workers to be found in the agriculture(which may relate to the seasonal nature of the work) and construction industries.

19 http://www.bls.gov/news.release/conemp.toc.htm



Houseman (2000), from a nationwide telephone survey of 550 employers in the US,found that the prevalence of ‘alternative work’ varied across industries. Theincidence of agency temporaries is highest in manufacturing (72 percent of the firmsused agency temporaries) and use of on-call (casual) workers was highest in theservices industry (44 percent).

Wooden and Hawke’s (1998) analysis of seasonal work in Australia, using data from

the Australian Workplace Industrial Relations Surveys conducted in 1989/90 and1995, found that workplaces where demand was seasonal were more likely to employcasuals. The average casual employment share was about 25 percent higher than inworkplaces where demand was not seasonal. In addition, continuous production wasassociated with lower levels of casual employment. The incidence of casualemployment was lower at long established workplaces and workplaces that hadrecently undergone major organisational restructuring.

4.1.1 Where are ‘lower-end’ non-standard workers located according to New

Zealand research?

In common with the above studies, the New Zealand workplace surveys20 (Anderson,

Brosnan and Walsh, 1994) showed significant variation between industries.Community and personal services, the fastest growing sector, had the most atypicallabour force. It had the smallest proportion of any sector in permanent full-timeemployment (less than half the labour force), and the largest proportion of its labour force in part-time permanent employment, in fixed-term employment and in casualemployment. Public and non-profit services also had a relatively small proportion of its labour force in full-time permanent employment (64 percent). It had virtually notemporary workers, but one worker in five was casual. Full-time permanent work wasthe highest in the manufacturing industry. The other notable incidence of non-standard work was the use of contractors in the primary and building/constructionindustries.

Apart from the above data, there is little empirical information available onoccupational profiles of casual and temporary jobs in New Zealand. A number of sectors have been investigated, which report some evidence of precarious non-standard work. These studies, however, are not representative and do not preclude theexistence of precarious non-standard work in other sectors. They are also notstatistically generalisable, thus findings cannot be generalised across the industries asa whole.

Accommodation, winemaking and brewing

Case study research into three industries – accommodation, winemaking and brewing

– found that all the firms studied used casual workers to a greater or lesser extent(Whatman et al . 1999). In the accommodation firms studied, there was a reportedtrend towards an increased use of temporary staff, as compared with full-time permanent staff, fewer guarantees of hours of work and greater pressures for all staff to be available to work on call. In the winemaking and brewing enterprises studied,casual or temporary staff were used extensively to deal with seasonal variation and to

20 Conducted by Gordon Anderson, Peter Brosnan and Pat Walsh of the Industrial Relations Centre,Victoria University of Wellington, May 1991. The surveys were national surveys of 2000 workplacesin 1991 and 5200 in 1995. The industry groupings for the 1995 data are different, however the generalindustry pattern is the same as in 1991.



supplement permanent staff during busy times. The use of casual and temporarylabour to facilitate ‘just-in-time’ production was increased.

Nursing

The New Zealand Nurses Organisation (NZNO, 1993) and McKillop (1995) reportthat the use of casual nursing staff in public and private hospitals throughout thecountry increased in the first half of the 1990s. They refer to area health board data

which show that the actual number and full-time equivalents of casual registerednurses employed by area health boards rose 41.4 percent and 37.3 percent respectively between 1990 and 1993. The data for casual enrolled nurses shows a similar increase(NZNO, 1993). NZNO staff working in the private sector also reported a similar increase in casuals employed21 (NZNO, 1993).

Forestry

A feasibility study on behalf of Forestry Industries Training and Industry NewZealand indicates that a key issue in the forestry industry is that of ‘contract’ work (Forme Consulting Group, 2001). The study challenges the assumption that forestrycontractors actually want to be in business for themselves. It found that the majority

of existing contractors/employers have been told by forestry companies to start up aforestry contracting business – “[t]hey have been literally thrown in the deep end asmajor contractors” (2001, 6.5). In turn, these ‘major contractors’ become responsiblefor new entrants into the industry and evidence suggests that, while they may be goodforesters, they are not always good managers. Meanwhile, forest owners have progressively distanced themselves from contractor employer/employee relationshipsfor fear of being seen under current legislation as ‘the employer’.

Furthermore, minimal income can be an issue for some contractors in the industrywith limited experience due to the ‘piece rate’ system of payment. Forme Consultingargue that there is a linkage between payment systems and on job behaviour. 22 That

is, piece rate payment encourages production, and for trainees this happens at theexpense of quality and safety, sound work methods and sound skill development(ibid).

Retail

A survey of 210 employees in the retail sector (McLaughlin and Rasmussen, 1998)23

found that almost half said they had no choice over the hours and days they worked ina seven-day industry and, according to the Northern Distribution Union, thoseworkers classed as permanent part-time workers were often treated as casualemployees, rostered on different days and different hours from week-to-week.In response to a question on the impact of their hours of work on family life:

• about one third left the question blank

21 Information on ‘casualisation’ in the private sector is largely anecdotal as the private sector is notcovered by legislation requiring disclosure of information (NZNO, 1993).22 See Leavitt (1964) and Hyman and Brough (1975) cited in Forme Consulting Group, 2001.23 The survey was limited to the Auckland region. As the authors point out, the response group (210) istoo small to provide results that can be generalised to the whole retail population and it is also biased.There is also a definite skew towards full-time, long serving and older employees, in an industry with a prevalence of part-time and young workers. Consequently, those who responded are likely to havegreater bargaining power and better bargaining outcomes than the average employee in the sector is(McLaughlin and Rasmussen, 1998).



• one third said it had no effect with some reporting that they were single, had nofamily, or their children had all left home so the hours of work were not a bigissue for them

• the remaining third reported that the hours had a significant negative impact onfamily life. The most common responses were: “you have none [quality familylife] when people are forced to work every weekend” … “weekends and nightsends family life” … “I don’t like working evenings and weekends because mychildren miss out and I have to hire a baby-sitter” … “when I’m working my wifeisn’t and vice versa, so the kids get looked after but we don’t get to see much of each other”.

The survey reported that those with the least bargaining power were younger workers, those recently employed in their jobs, and those in small organisations.These same employees were also least likely to belong to the union (McLaughlin andRasmussen, 1998).

4.1.2 Public / private sector – international evidence …

The majority of the overseas literature is in agreement that, with the exception of some areas of part-time work, non-standard work is overwhelmingly contained withinthe private sector (Mangan, 2000; Wooden and Hawke, 1998). Wooden and Hawke’s(1998) findings indicate that rates of casual employment within the public sector areless than half that in the private sector, and Simpson (cited in Mangan, 2000: 42)estimates that at least 70 percent of all casual workers in Australia are employed in the private sector. Reasons given for this include a greater amount of regulation and moreemphasis on gender equity and affirmative action programmes in the public sector than in the private sector. This has the effect of limiting the scope of managerialflexibility in the public sector when it comes to labour hiring. Higher rates of unionisation in the public sector may also be a contributory factor in rates of casual

employment being significantly higher in the private sector.

… and New Zealand evidence

Results from the Brosnan and Walsh (1996) surveys, for non-standard employmentoverall, showed that the relative size of the non-standard workforce for the public and private sector changed quite significantly between 1991 and 1995. In the 1991survey, non-standard workers comprised 33 percent of the public sector workforcecompared with 25 percent in the private sector. By 1995, non-standard workers in the public sector had declined to 31 percent and the private sector had increased to 30 percent.

It is the view of the authors that the effects of public sector restructuring in the secondhalf of the 1980s had slowed since 1991, whilst the private sector’s capacity toreshape its workforce was enhanced following the ECA 1991. Thus, all non-standardemployment categories increased in the private sector between 1991 and 1995. Thefall in casual employment during this period was almost entirely a public sector phenomenon – it actually increased in the private sector from four to six percent(Brosnan and Walsh, 1996).



4.1.3 Size of enterprises – international evidence …

The size of enterprises is also important when attempting to gain insights into non-standard precarious work and can give further insights into its likely locality or areasof higher risk. The OECD (2002) found that smaller firms are more likely to hireworkers on temporary jobs than are medium-and large-sized firms.

Similarly, Wooden and Hawke’s (1998) analysis of Australian workplace data found

there was about a 50 percent larger, other things equal, casual employment share insmall firms (less than 100 employees).

… and New Zealand evidence

This is also reflected in the New Zealand workplace survey findings (albeit that thegroup referred to is non-standard work overall, rather than a breakdown intotemporary, casual and fixed-term work) (Brosnan and Walsh, 1996). These findingsshowed that the size of the non-standard workforce tends to decline as the size of theworkplace increases. In 1991 and 1995, the smallest workplaces, those of two to nineemployees, had the largest proportion of non-standard workers at 34 percent. Non-standard employees in the largest workplaces (more than 50 employees) remained

almost unchanged, dropping one percentage point to 27 percent in 1995. Workplacesof 10-49 employees experienced a considerable rise in non-standard employees (from27 percent in 1991 to 32 percent in 1995).

4.2 Characteristics of people in lower end non-standard jobs – age,

gender, ethnicity, skill levels, education

An overview of the literature on individual characteristics of workers in lower endnon-standard jobs reveals much commonality in the findings. In short, these workersare more likely to be women, young, an ethnic minority, and less educated and lower skilled (OECD, 2002; Polivka, 1996; Rodgers and Rodgers, 1989; Zeytinolgou and

Muteshi, 2000).

However, the OECD (2002) found that, whilst women are over-represented amongtemporary workers, gender differences are only large in a few countries. Thedifference is minimised, given that high concentrations of temporary jobs are inmanual jobs that are conventionally held by men.

Rodgers and Rodgers (1989) argue that the characteristics of the better-off groups will be different from the characteristics of the worse-off group. The better-off are morelikely to be male, older and better educated. This applies particularly to self-employment, contract work and, to a lesser degree, some types of part-time work. On

the other hand, the characteristics stated above for lower end non-standard workersare more likely to be stronger, the more ‘precarious’ is the work concerned.

Consistent with this argument are findings from the Bureau of Labour Statistics(2001) that the characteristics of workers in alternative employment arrangementsdiffered widely among the four alternative arrangements.24 “For example, comparedwith workers in traditional arrangements, independent contractors were more likely to

24 These are independent contractors, on-call workers, temporary help agency workers, and contractcompany workers.



be white, male and age 35 and older, while temporary help agency workers were morelikely to be black or Hispanic, female, and between the ages of 20 and 34” (BLS,2001: 3).

4.2.1 Gender – New Zealand evidence

Brosnan and Walsh’s (1996) New Zealand workplace surveys reflected the abovefindings by gender, but no New Zealand evidence on temporary or casual work is

available for ethnicity or youth. With respect to non-standard employment overall,the data for 1991 and 1995 showed that women were much more likely throughoutthis period to be in non-standard employment than men – almost 90 percent of employed males were full-time employees in 1991 and 1995 compared with just over 60 percent for females. Major gender differences in casual employment were found.Women were more than twice as likely as men to be casual workers in both 1991 and1995. In contrast to casual employment, men were more than four times as likely aswomen to be contractors or consultants. Males and females were employed on atemporary basis in virtually the same proportions in 1991. By 1995, although maletemporary employees had risen, female temporary employment had increased from1.8 percent to 3.0 percent of the female labour force (ibid ).

This is consistent with the above findings that men are more likely to be in the higher end forms of non-standard employment, whilst women predominate the lower end.

4.2.2 Ethnicity – international evidenceA US Bureau of Labor Statistics report25 (Polivka, 1996) found that blacks had higher rates of contingency than whites within the industries that employed close to themajority of contingent workers, such as the construction industry and retail trade. For example, in the construction industry, 12.1 percent to 17.4 percent of blacks werecontingent, compared with only 3.8 percent to 7.4 percent of whites. Similarly, in theretail trade, blacks’ rates of contingency were about double the rates for whites.

“Overall, these industry estimates suggest that blacks’ higher rates of contingency were not simply a function of their employmentdistribution among various industries. Rather, blacks’ higher rates of contingency also were a function of labor market factors withinindustries” (Polivka, 1996: 16).

Evidence also suggests that recent immigrants in Canada are over-represented in non-standard work. Using Census data from 1986 to 1996, and focusing on those in primeworking ages of 25 to 44, Badets and Howatson-Leo (1999 cited in Zeytinoglu andMuteshi, 2000) found that although most recent immigrants spoke one of two officiallanguages and were highly educated, they were less likely to be employed or, if

employed, more likely to be in part-time or part-year (seasonal, casual) jobs. Their study also showed that in the 1990s, recent immigrants, three quarters of whom wereracial minorities, were not only more likely to employed in non-standard work, theywere also stuck longer in those type of jobs.

25 This report profiles ‘contingent workers’ using data collected through a special supplement to theFebruary 1995 Current Population Survey (CPS). Contingent workers are defined as individuals whodo not have an explicit or implicit contract for ongoing employment.



Zeytinoglu and Muteshi (2000) refer to a number of studies in Canada, which find thatracial minority women, many of whom are from low economic class, aredisproportionately represented as the ‘flexible’ workers in the labour market. Jobsdesignated as less skilled, lower paying and casual were filled by racial minority andAboriginal women and/or women of low economic class.

4.2.3 Age and education – international evidence

Studies suggest the strongest demographic pattern in lower end non-standardemployment is the over-representation of younger and less-educated workers.

Polivka’s (1996) data indicates that contingent workers were more than twice as likelyas noncontingent workers to be between the ages of 16 and 24. Contingent workerswere three to four times more likely to be enrolled in school than were noncontingentworkers. Among those not enrolled in school, contingent workers were more likelythan noncontingent workers to not have a high school diploma.

Similarly, the OECD (2002) found that temporary jobs are disproportionately held byyounger and less educated workers. On average, for the 28 OECD countries

considered, youth (ie, workers aged 15-24 years) were approximately three times aslikely as older workers to hold a temporary job. This suggests, according to theOECD, that these jobs often serve as entry ports into the world of work. Workerswho had not completed upper secondary schooling had a rate of temporaryemployment that was approximately 60 percent higher than that of more educatedworkers which, according to the OECD, is suggestive of long-term traps in precariouswork. Mobility into permanent jobs is also lower for less educated workers. Despitethese differences, the OECD (ibid ) concludes that temporary workers are a diversegroup and the majority are to be found in the same demographic and institutionalcategories as the majority of all workers.

From an Australian employee sample in 1995, Wooden and Hawke (1998) found thatcasual employment was particularly high among young people, with 30.2 percent of employed persons under the age of 25 estimated to be working on a casual basis.Their results indicate a high probability of casual employment among both womenand young workers, and a greater likelihood of casual employment at the upper end of the age distribution (55 years and over). 26

Lane, et al’s (2001) analysis of the Current Population Survey found that educationlevels for workers in alternative arrangements – temporary help, independentcontractors, on-call workers, and contract company workers – are low, with aboutone-third of these workers lacking a high school diploma.

The above evidence is consistent and suggests a degree of overlapping between the‘age’ and ‘education’ characteristics. Lower end non-standard work can provideemployment for those for whom employment is not the primary task, and enablestudents to combine study and paid work. It is the non-students without qualificationsand in precarious work who are more likely to present a policy concern.

26 They estimate a multivariate probit model of casual employment using the employee data collectedas part of the Australian Workplace Industrial Relations Surveys 1995 (Wooden and Hawke, 1998).



The next section is concerned with understanding the determinates of non-standardemployment. Why are employers and employees using non-standard employmentarrangements? What are the explanations for the rise in non-standard employment?



5. What determines the extent of non-standard

and precarious work?

This section attempts to provide greater insight into why non-standard/precariousemployment arrangements are being used. It discusses the role of supply, demand andinstitutional factors in determining the extent/distribution of non-standard/precarious

work at a point in time. Section 5.2 examines demand, or employer motivations, andsupply, or employee motivations, for using non-standard work arrangements. Section5.3 discusses factors that may account for its growth.

The types of jobs that exist in the economy reflect the interaction of the demand byemployers for labour to perform production tasks, the supply of labour by households,and the institutional framework.

Supply-side, demand-side and institutional factors interact in different ways for thevarious forms of non-standard employment, but not necessarily equal ways. Mangan(2000) argues that employers seem to be the instigators of most moves to change

labour hire practices or working arrangements and cites a survey conducted byMcAndrew (1992) in New Zealand, which found that of those firms that put newindividual contracts in place, employers initiated 88 percent.

Mangan (ibid ) refers to the contrasting theories of demand-side (recession-push) andsupply-side (entrepreneurial-pull) both of which have considerable empirical support(see Mangan, 2000: 91). International research shows that supply-side factors aremore likely to be predominant in the more desirable forms of non-standardemployment, whereas in the more precarious forms, demand-side tend to dominate.

In general the more contingent and less desirable the form of non-

standard employment, in terms of pay and conditions, the more dominantare demand-side factors. This is why independent contractors and other self-employed are generally seen as the top echelon of non-standardworker (Mangan, ibid : 94).

In thinking about precariousness, there are also a number of other factors to consider,including firm production technologies, worker preferences, bargaining power andunion influence. With respect to firm production technologies, for example, firmsmay have different costs of providing precarious and non-precarious jobs. A firm inhospitality, which is required to operate for longer hours than a firm in manufacturing,may find it more costly (because of penalty rates) to offer only full-time jobs.

With respect to bargaining power, in jobs where employers have a relative advantagein bargaining power over employees, it is likely that jobs will reflect employer preferences. In jobs where workers have a relative advantage in bargaining power over employees, it is likely that jobs will reflect worker preferences. With respect tonon-standard employment, workers in the former category are more likely to be lower end workers and workers in the latter are more likely to be higher end.

In the main, the literature fails to emphasise bargaining power as a key determinant of non-standard work. The issue of bargaining power may be important in connection



with unions – a decline in unions would have a likely reduction in worker bargaining power. This would be expected to shift the distribution of types of jobs that existtowards a distribution that is preferred more by employers (such as a greater share of jobs without effective protection of rights). This effect will be intensified with non-standard workers who are less likely to be collectivised.

In terms of a worker’s ability to trade off their wage or non-wage conditions,

traditional economic theory might proffer the compensating model of earningsvariations, which would suggest that a job with precarious non-wage characteristicswould receive a higher wage as compensation. However, others would argue that thelow wage labour market functions differently from the normal labour market and ismore complex than the model might suggest (Metcalfe, 2002).

Bargaining power over wage and non-wage conditions may have greater credence atthe higher end of the non-standard labour market, but at the lower end the choices aremore stark. Brosnan and Scully (2002) argue that those workers who are forced toaccept the most unpleasant jobs are in the lowest tiers of the labour market and haveno other options. Their employers therefore have no economic incentive to offer

compensating features. The existence of widespread unemployment provides a readysource of competition, so that the job need not offer permanency. Workers in theselower end jobs have little to bargain with if they are low skilled with no qualifications.If their only alternative is an equally poor job or unemployment, there is littleincentive for an employer to offer better pay or conditions than other firms.

Mangan (2000) suggests that the principal form of departure of non-standard work from traditional work is one of control in the work relationship. The traditional modelrepresented a balance of power shared relatively equally by employers and organisedlabour within a system of rules set by government. Power for some in non-standardwork, such as independent contractors, has shifted to the individual (worker), whereas

lower end non-standard workers are, he argues, defined by their lack of employer-funded benefits and their almost total absence of workplace influence.

5.1 What are the motivations of employers for using non-standard

work arrangements internationally …?

According to Rodgers and Rodgers (1989) one of the major reasons for the use of various non-standard employment forms is to avoid the designation of an individualas an employee. Employees may have legal or regulatory rights that impose costs onemployers (including specific terms and conditions of employment and rights toemployment protection such as restrictions on lay-off or redundancy). The level of

these costs will influence the extent to which employers may seek to avoid employeestatus.

Empirical evidence in this area that is widely referred to is Houseman’s 1997 survey(2nd rev, 2000)27 of US employers conducted by the Upjohn Institute for EmploymentResearch. This survey of 550 private sector employers asked firms questions about

27 http://www.upjohninst.org/publications/wp/01-67.pdf



their use of flexible staffing arrangements.28 The impetus for the survey arose fromconcern over evidence showing the increasing use of flexible staffing arrangements byemployers, and the concomitant realisation that the evidence for the motivations of employers using these arrangements and their implications for workers was verylimited.

Houseman (ibid ) found that the reasons most commonly given for using flexible

staffing arrangements were the traditional reasons of minimising costs andaccommodating fluctuations in workload or absences in staff. The empirical evidencesuggested that while there are many reasons for firms to use alternative work arrangements, firms’ staffing needs – primarily short term – are the main source of demand for on-call workers and agency temporaries. Firms did not often usealternative work arrangements to screen employees for full-time, permanent positions.Finally, savings on benefit costs was an important factor determining employers’ useof flexible staffing arrangements. Workers in flexible staffing arrangements typicallyare not covered by regulations governing benefits, and they generally do not receivekey benefits offered to standard workers (Houseman, 2000).29 This concurs withevidence from a similar survey conducted in Australia (Brosnan and Scully, 2002).

…. and in New Zealand?

Brosnan and Walsh’s (1996) findings are similar and indicate that non-standard formsof employment create opportunities for employers, particularly in the new serviceindustries. Non-standard employment allows labour deployment to be tailored totimes of peak demand and times of fluctuating demand, and allows employers toavoid training costs. However, they argue that the benefits are offset by the addeddifficulty of managing a non-standard labour force and the reduced likelihood of amutual commitment between employers and their workers.

Whatman et al . (1999) found in their case studies that employers were utilising thistype of labour to increase their operational flexibility when faced with uncertainworkflows and operating environments. The flexibility agreed to in contractualarrangements meant that it was common for casual staff to bargain weekly andsometimes daily over hours of work. They also used casual and temporary contractarrangements to reduce overtime and other costs of permanent employment such asholiday pay, and to reduce labour costs and risks by using such employmentarrangements as three-month trial periods and temporary contracts. By trialling newworkers, employers could let the contracts of the poor performers lapse rather thanhave to dismiss them.

Evidence from the Department of Labour’s recently completed firm interviewsshowed significantly different responses between the small firms and the larger

28 These were temporary help agency workers, on-call workers (equal to our definition of casualworkers), contract workers, short-term hires (defined as individuals who are employed directly by theorganisation for a limited and specific period of time, which is similar to our fixed-term worker category), and regular part-time workers.29 This is less of a consideration in the New Zealand context, given that employers generally do notoffer pension or health entitlements, as is the common practice in the US. However, other benefitssuch as parental and sick leave, based on accrual, are still relevant considerations.



firms.30 The larger firms tended to have responses consistent to those alreadymentioned. However, many of the smaller firms emphasised the need to use casualstaff as a matter of financial survival. Achieving growth by increasing permanentstaff was simply not financially viable for many of them. A flexible workforce wastherefore seen as the only option for responding to changing demands in the future.

Dismissal procedures were seen as particularly onerous by the firms visited and many

felt the current legislative environment was too strict. The risk of employing someoneon a permanent contract who could prove unsuitable ‘on the shop floor’ was seen ashigh, particularly for the small firms.

5.2 What are the motivations of employees for working in non-

standard/precarious jobs?

On the supply side, there are groups of workers who are responsive to non-standardemployment and others who are not. It is useful to understand workers’ motivationfor engaging in the various forms of non-standard work and their satisfactionassociated with this employment in order to determine whether it is their preference.

Data from the US Bureau of Labor Statistics31 indicate that workers take contingentand other temporary jobs for a variety of reasons, both personal and financial. Thesereasons include workers’ preference for a flexible schedule due to school, family, or other obligations; need for additional income; inability to find a more permanent job;and hope that the position will lead to permanent employment (GAO, 2000: 9). 32

Dillingham’s (2000) research using data primarily from the CPS found that most of the reasons for contingent temporary work were personal, defined by the CPS asflexibility of schedule; family or personal obligations; in school or training; and other.According to Lane et al . (2001: 21), however, most workers work in temporary helpservices (which, alongside casual workers, makes up the majority of the contingent

group) because they have no choice, not that they choose temporary work for personalreasons.

In particular, worker responses to the (CPS) question that examined thereasons for the choice of temporary employment found overwhelminglythat workers work in the temporary help industry for economic reasons – that is, it was the only type of work that they could find; that they hoped itwould lead to permanent employment; or that the nature of the work wasseasonal. Workers in the temporary help industry are not there for personal reasons such as schedule flexibility, childcare, school scheduling,or family and personal obligations … Not surprisingly … most workers intemporary work are not particularly happy in that job.33

30 This work entailed visiting 18 firms in the retail trade and manufacturing industries in the Aucklandand Wellington regions, looking at how firms adjust to changes in demand for their products and keyfactors affecting their decision to increase employment.31 This data is from the biennial Supplement (‘Contingent and Alternative Employment Arrangements’) to the

Current Population Survey – a monthly survey of 50,000 households that is the primary source of information on the nation’s labour force.32 http://www.gao.gov/ – ‘Contingent Workers: Incomes and Benefits Lag Behind Rest of Workforce’.33 (http://www.urban.org/Uploadedpdf/410374_nonstandard-employment.pdf ).



It is worth noting that Lane et al .’ s findings are drawn from the three ‘Contingent andAlternative Employment Arrangements’ Supplements to 1999, prior to the February2001 Supplement results. In the 1997 Supplement, 57 percent of temporary helpagency workers would have preferred a ‘traditional’ or standard job, but this haddeclined to 44 percent in the February 2001 Supplement, the reasons for which are notmade clear.

In the narrowest estimate (self-employed workers and independent contractors areexcluded from this estimate) over half (58 percent) of contingent workers would have preferred a permanent job, while 35 percent said they preferred their contingentemployment arrangement. If self-employed and independent contractors are included,the percentage of contingent workers preferring a permanent job is reduced, althoughit is still over half (52 percent), while 40 percent preferred their contingentemployment arrangement. Independent contractors as a group clearly preferred their arrangement, with 83 percent preferring it over a traditional work arrangement.

Temporary workers tend to be less satisfied with their jobs than permanent workers,according to survey evidence on job satisfaction levels in 14 European countries

(OECD, 2002).34

The relative dissatisfaction of temporary workers focuses on jobsecurity, in particular, and pay. Objective indicators of working conditions alsosuggest that the incidence of monotonous tasks and inflexible work schedules issignificantly higher among temporary workers, who are also somewhat more likely towork night and weekend shifts. The finding with respect to inflexible work hours isnoteworthy according to the OECD (ibid ) as it highlights the possibility that thescheduling flexibility associated with temporary jobs may more frequently be used tosatisfy employers’ production needs than workers’ time-use preferences.

In the Walsh and Deery (1999: 59) study, a direct relationship is shown between thedegree of dissatisfaction, as indicated by the percentage of employees who prefer a

different status, and the extent to which working hours are irregular and unsociable.For example, in the retail and hotel firms, where working patterns were extended andunpredictable for temporary employees, there was a greater propensity to express a preference for changed employment status. The unpredictability of flexible workinghours was particularly problematic for women.

There are other considerations that may lead to some workers preferring to be intemporary or casual jobs. Some workers may prefer to be in an arrangement whereongoing commitment or loyalty to an employer is not required. Short-term work may be desirable for reasons such as health or other personal commitments. Other workersmay wish to gain work experience in a variety of occupational sectors. They may be

semi-retired, or paid work may be secondary to other non-labour market activities or family responsibilities. Students also may opt for casual or temporary work as a wayof supplementing income while studying.

Overall, there does appear to be a common theme in the international literature of thedistinction between the higher end and the lower end non-standard work forms. In

34 Given that job satisfaction indexes are difficult to interpret, being based on individual subjectiveevaluations of their situation, objective indicators of working conditions in temporary jobs are alsoexamined in order to paint a fuller picture of how favourably temporary jobs compare with permanent jobs (OECD, 2002).



general, the former group of workers exercise choice in their employmentarrangement, whereas there is a higher likelihood of the lower end non-standard group being involuntary participants.

… and in New Zealand?

There is little New Zealand evidence on this issue, with the exception of Carroll’s

(1999) work indicating that the majority of part-time workers prefer their type of work arrangement. This is in contrast to many of the temporary and casual employeesinterviewed in the accommodation, winemaking and brewing industry case studies(Whatman et al ., 1999) who felt that their employment was insecure and that they hadfew alternative employment opportunities available to them.

5.3 What contributes to the growth of precarious/non-standard

work?

Explanations for the growth of non-standard employment also relate to a combinationof supply-side, demand-side and institutional factors (Department of Labour, Canada,1997; Mangan, 2000; Brosnan and Walsh, 1996; Murtough and Waite, July 2000a).

Supply-side factors include the substantial increase of female participation in theworkforce and their propensity to work in non-standard, particularly part-time,employment; changing family structures; the need to combine family responsibilitieswith paid work coupled with the availability of childcare; and an increase in the shareof young people who are students.35

Demand-related reasons include the desire of employers for a more flexible labour force in response to changing product market conditions such as customers’requirements of individual and just in time production. In addition, developedeconomies have shifted away from the production of goods, and towards services, inwhich part-time and casual work has always been more important.

Other possibilities for an increase in non-standard work include:

• firms have faced an increase in competitive pressure that has led to greater productdemand uncertainty, which in turn impacts on their employment choices

• downsizing, and the associated intensification of work that has accompanied it,may have led to a decline in labour hoarding, therefore temporary workers mayfill the gap

• jobs requiring little firm-specific capital may have become more common

(Australian Labour Market Research, 2001).

In New Zealand, the growing competition firms face as a result of globalisation and areduction in trade barriers and transportation costs, has meant that firms have

35 Within Australia’s labour market, young people account for the highest share of casual employment.The majority of these jobs are part-time, taken by students, concentrated in the service sector and inrelatively low-skilled occupations (Gaston and Timcke, 1999).



increasingly been looking for ways to cut costs. The more intensive use of non-standard employees may be one way of achieving this cost-cutting (Carroll, 1999).

With respect to the New Zealand data, labour demand explanations for the rise in non-standard work are primarily based around three ideas:

• non-standard employment allows employers increased flexibility in production

• non-standard employees carry fewer costs and, more generally, can be paid less

than standard employees, and

• employers may use non-standard workers so that they can transfer economic risk to the workforce(Carroll, 1999; Brosnan and Walsh, 1996).

Quantitative research in Australia suggests that demand-side factors provide morelikely explanations for changes in the overall level of casual employment than supply-side characteristics (Wooden and Hawke, 1998; see Murtough and Waite, July2000a).

Institutional factors such as minimum wage requirements and other regulatoryarrangements may directly affect the extent of precarious employment. An easing of labour laws and a climate of greater labour market flexibility may result in an increasein non-standard employment. In Australia and Spain labour market deregulation wasseen to encourage an increase in non-standard employment (Mangan, 2000; Brosnanand Thornthwaite, 1994). It is difficult, however, to establish a direct causal effectand the widely varying labour market contexts complicate this issue. For example,Spain has a unique ‘dual labour market’ in which a third of employees work under very flexible employment contracts with low severance payments and two-thirds work under permanent employment contracts with extensive employment protection andhigh redundancy provisions (Dolado et al ., 2001). In reaction to the high employment

protection for permanent workers, employers have pushed for and progressivelyachieved the sanctioning of non-standard forms of employment (Mangan, 2000).

The easing of labour laws in New Zealand during the 1990s may have had theopposite effect to that experienced by Australia and Spain (as indicated by Brosnanand Walsh’s (1996) survey data showing that the proportion of casual, temporary andfixed-term employment remained unchanged between 1991 and 1996), possibly because the Employment Contracts Act 1991 made it less costly for employers tohave full-time permanent employees work longer hours.

In the US, Houseman (2000) argues that wage and benefit regulations have the effect,

probably unintended, of increasing employer demand for flexible staffingarrangements as a way of avoiding the costs associated with standard employment(Houseman, 2000).

In summary, determining the predominant causes for the extent and growth of non-standard employment is an extremely complex empirical question that requires further research. The effect of regulatory arrangements on the extent of non-standard work isanother issue which further research will need to address.



6. Potential policy concerns

This section addresses the fifth research question: “Why are we concerned?” Itlooks at what some of the possible implications for non-standard precarious workersmight be – both economically and socially. It summarises the issues and concernswith respect to earnings, employment relations, health and safety and training in theworkplace; the implications for trade unions; for workers’ mobility; and for familyand other social issues.

6.1 Earnings differentials

There is a general consensus in the international literature regarding the association between precarious non-standard work and low income.

Again, it is important to note the distinction between the ‘higher end’ and ‘lower end’non-standard work arrangements in terms of the economic consequences. Accordingto the Bureau of Labor Statistics (BLS), independent contractors, who are likely to be

white, male, and educated, do not suffer an earnings penalty and may in factexperience an earnings premium. Yet the employees of temporary agency firms aremore likely to be black, female, poorly educated, and single mothers and to suffer earnings penalties (BLS, 2001; Hipple and Stewart, 1996).36

The US General Accounting Office (GAO, 2000) finds that workers in most of thecategories that could be considered part of the contingent workforce share a commoncharacteristic – they are more likely to have low incomes than similar workers instandard full-time work arrangements. Likewise, Houseman (2000), using data froma survey of US employers, found that workers on temporary jobs were paidsignificantly less than permanent workers.

Hipple and Stewart (1996) of the BLS examine the compensation data from theContingent Worker/Alternative Work Arrangement Supplement to the CurrentPopulation Survey in 1995. They conclude that overall, contingent workers earn lessincome than noncontingent workers37 and are less likely to receive health insuranceand pension benefits through their employers than are noncontingent workers. Whitesare much more likely than are blacks or Hispanics to have health insurance from anysource; minority workers in contingent jobs are not as able to rely on family membersor other non-employment-related sources for their health insurance coverage; andonly one in ten Hispanic contingent workers has employer-provided health insurance(ibid ).

An area that receives less attention in the literature is the possible explanatory factorsfor the difference in pay and shorter tenure, such as the different demographiccharacteristics of the workers, as opposed to the nature of the work. In New ZealandCarroll (1999) addresses this in an analysis of part-time employment, using regressiontechniques to control for a variety of background variables. He finds that certaincharacteristics of workers (such as age, education, ethnicity and occupation) account

36 (http://stats.bls.gov/opub/mlr/1996/10/art3exc.htm; ftp://ftp.bls.gov/pub/news.release/conemp.txt)37 For contingent workers, median weekly earnings were $285, compared with $416 for noncontingentworkers (Hipple & Stewart, 1996).



for much of the raw differential between part-time employment and full-timeemployment earnings and concludes that the demographic and occupationaldifferences are more than sufficient to explain the observed part-time/full-time wagedifferences.

Likewise, the economic impact for those in ‘lower end’ non-standard work dependson a number of demographic variables and job characteristics such as age, education

and industry. Dillingham (2000) in his analysis of CPS data found that youth andlower education levels largely account for lower earnings among contingent workers.This was due, firstly, to younger workers being more likely to be in school and towork part-time and, secondly, that education and age are positively correlated with productivity, “which in significant ways drives wages”. Thus the effects of age,education and work status on wages needs to be taken into account.

Lane et al., (2001) also suggest the possibility that differences in education attainmentmay contribute to some of these discrepancies in earning. On-call workers andagency temporaries have the lowest educational attainment while independentcontractor and contract workers are most highly educated, which indicates a high

correlation between earnings and education.

In a study that controlled for differences such as education and hours worked per week, Segal and Sullivan (1998) 38 find that a 15 to 20 percent wage differential exists between wages earned in temporary work and the wages that would be expected fromtraditional work based on the work history of the individuals in the sample. But, up tohalf of this effect appeared to be due to factors associated with temporary work (suchas workers turning to temporary work after having suffered a career setback) rather than to temporary work per se. The differential dropped to about 10 percent whenwages were compared to those earned at the types of jobs that the individuals would probably find, during the same period, if not involved in temporary work.

The OECD (2002) used multivariate regression techniques to provide an estimate of the independent impact of holding a temporary job on pay, by standardising for paydifferences due to other individual and job characteristics. The results showed thatthe wage penalty associated with holding a temporary job was reduced but noteliminated. There were still statistically significant wage penalties for temporaryworkers in all of the countries considered.

However, the OECD (ibid ) notes that the regressions may still provide a biasedestimate of the wage penalty to temporary jobs because they do not control for all potentially important characteristics. Furthermore, national differences in the

estimated wage penalties may reflect not only different economic and institutionalcontexts, but also differences in data quality.

6.2 Employment relations

Non-standard working arrangements impact upon employment relations in a number of ways. According to Mangan (2000), on the supply-side they have the potential toremove third parties, such as unions, from the industrial relations process. Workers

38 http://www.chicagofed.org/publications/workingpapers/papers/wp98_23.pdf



are more likely to choose to make arrangements for individualised contracts or, in thecase of casual or marginalised workers, may not feel part of the union process.

The New Zealand Survey of labour market adjustment under the Employment

Contracts Act (Department of Labour, 1997) found that casual employees tended to beless informed than permanent employees on minimum conditions. Seventy-two percent of casuals were not able to identify any minimum conditions during

unprompted questioning compared to 57 percent of permanent staff. The 1993 surveyfound that over 40 percent of casual employees answered ‘never had/ not applicable’in response to questions about changes to their annual and sick leave provisions(Department of Labour, 1993).

In subsequent case study work of firms in the accommodation, winemaking and brewing industries (Whatman et al., 1999), it was found that conditions for casualstaff, as well as the way they were treated, tended to be less favourable than for thecore of permanent staff. In addition, some casuals did not receive their entitlements,such as holidays as they were entitled to under the Holidays Act.

Employers usually believed that they had significantly less risk of a personalgrievance complaint if the employment relationship was temporary, because theending of that relationship did not amount to a ‘dismissal’. Sometimes employeesworked as ‘casuals’ for long periods when they were effectively full-time employeeswithout a clear expectation of the relationship ending. Permanent staff generally hadwritten contracts in large and medium-sized enterprises as they presented the greatestrisk for employers. Casual staff in these enterprises, however, might not have writtencontracts (ibid ).

Whatman et al . (1999) found that small employers generally conducted relationshipsin a highly informal manner. On the other hand, large and medium-size employers in

all firms studied were more bureaucratic and had systems in place for handlingemployees in a consistent manner that were compliant with regulatory requirements.

The increasingly complex mix of hiring practices and employer-worker relationswithin any one enterprise, which is associated with non-standard employmentarrangements, complicates employment relations issues. For example, as Barker andChristensen (1998) argue, workers are being hired in larger numbers on a variety of different bases: temporary hires made directly by the firm; temporary hires madethrough an agency; and self-employed independent contractors who are hired on a project basis. In addition, entire functions of organisations, ranging from dataanalyses to janitorial, cafeteria, and security services, are being outsourced, that is,

subcontracted out to other companies. The amount of control the firm exercises over this range of workers can vary greatly (Barker and Christensen 1998).

In the case of independent contractors, the firm pays for the job that is contracted for but typically bears no responsibility for providing training or benefits. In the case of outsourcing of entire functions, the worker becomes an employee of thesubcontracting firm, and the original organisation abdicates any direct responsibilityfor compensation, training, benefits, or liability (ibid ).



The situation for temporary agency hires is more complex. Whilst they aretechnically employees of the temporary agency, which is responsible for settingcompensation and for providing training, they are supervised by the client firm towhich they are assigned. This ‘co-employer’ relationship can make the handling of issues such as sexual harassment and worker safety quite complicated, particularly interms of liability. Likewise, the dependent contractor can be part of a co-employmentrelationship where the boundaries for liability become unclear (ibid ).

6.3 Health and safety

The impact of changes of labour hiring procedures on workplace health and safety isan issue in need of further research (Mangan, 2000). Some results are available fromSpain, which has the highest percentage of temporary workers and contracted labour in the European Commission with just over 36 percent of all workers on contract. ASpanish Labour Ministry study of 1993 showed that 48 percent of all industrialaccidents in Spain involved employees on temporary contracts. The Spanish TradeUnion Confederation found that 88 percent of all fatal accidents involved workers ontemporary contracts and 44 percent of all accidents involved employees with less than

one year of service. They argued that these accidents occurred more frequently withtemporary staff because:

It is generally more difficult for employees to become familiar with andtrained in labour practices of a particular industry if they are employed ona contract of only a few month’s duration (European Industrial RelationsReview, 1995, cited in Mangan, 2000: 143).

Rebitzer (1998) looks at the US petrochemical industry, which in the six months of January to June 1991 had 11 major workplace accidents, nine involving contractworkers. He concludes that host plants offer more effective safety training andsupervision to their employees than to contractors.

Rebitzer (ibid : 243) argues that despite the increasing importance of contract andtemporary employment relationships, very few studies have examined theimplications these have for the operation and regulation of labour markets. He writes,

At the level of the firm, little is known about the manner in which contractemployees are trained and supervised. At the economic policy level, littleis known about how laws and legal concepts developed for conventionalemployment relationships work when applied to contract employmentrelationships … Organisations that use temporary or contract workersdisavow health and safety responsibilities for such workers by assigningthe primary responsibility for their safety training and supervision of

contract employees to individual contractors.

A report from the European Agency for Safety and Health at Work finds that casestudy research indicates a transferral of work-related risks to non-permanentemployees and to subcontractors.39

The report concludes,

39 The report has sought empirical evidence of changing contractual relationships within the EuropeanUnion in order to assess the occupational safety and health (OSH) implications. It is based on the studyof relevant literature and on the consulting of experts by means of a questionnaire and expert seminar.



[These] are the people who do the dirtiest, the most dangerous and themost monotonous jobs under relatively poor ergonomic conditions. Theyare not as well protected as permanent employees since they often falloutside the jurisdiction of committees that monitor working conditions or labour unions. This is not always necessarily intentional; sometimes theyare simply not around long or often enough to participate in safety trainingor employment negotiations (European Agency for Health and Safety atWork, Goodswaard et al , 2002: 29).40

Quantitative analysis supports this view to some extent, but some of the differencescan also be explained by differences in age, occupation or background. Both casestudy research and data indicate a segmentation in the workforce based on differencesin conditions of employment. Employees with a temporary or fixed-term contract (or a part-time contract) have less access to training (this includes OSH training), lesscontrol over their working time, fewer career prospects and perform less skilful tasks.There are gender differences in contractual relationships and in health outcomes butmore research is needed.

Another of the European Agency’s research information reports, Research on the

changing world of work – implications on occupational safety and health in someMember States of the European Union,

41 found common trends which are summarised below:

Workplace changes Possible OSH changes/implications

Employment status changes:

Increased part-time work May experience social isolation

May miss out on OSH trainingMany jobs less skilled and potentially monotonous

Temporary workers Possible stress from insecurityMay not receive OSH training

Self-employed workers Coverage by OSH systems not always clear

Some are technically self-employed for tax reasons butin practice work under the control of the parentcompany

Precarious workers ingeneral

Evidence that they are more exposed to physical workhazards and have less access to training

May experience insecurity (stress)

More difficult to reach to provide OSH services such asinformation or occupational health services

(Source: Forum, European Agency for Safety and Health at Work)42

6.4 Training

If temporary and casual workers receive fewer opportunities for training and skilldevelopment from their employer than permanent workers, then the impact this mayhave in the longer-term on their future career prospects needs to be considered.

40 http://agency.osha.eu.int41 http://agency.osha.eu.int/publications/reports/205/en/index.htm42 http://agency.osha.eu.int/publications/forum



Non-standard employment does not entail any formal impediment in access totraining. The issue, therefore, is centred at the level of employment practice(Campbell, 2001). In Australia, ABS data on the training experience of casual and permanent employees for 1989, 1993 and 1997 gives an insight into the employment practice. The differences in 1997 were greatest for in-house training courses, with40.5 percent of permanent employees but only 16.7 percent of casual employees participating in such courses. The data also indicate a marked difference in relation to

employer-supported external training courses and, in the case of unstructured on-the- job training, casual employees are less likely to participate. Campbell (ibid : 73)concludes,

In short, as many researchers note … the aggregate data point to asignificant deficit in participation in training, especially employer-supported training, between casual employees and permanent employees.… Aggregate data suggest that the gap is not narrowing. Indeed, giventhat an increasing proportion of employees is involved in casualemployment, the impact of this deficit may be assuming greater importance.

Mangan (2000) refers to Romeyn (1992) and a survey of women public servantsundertaken in 1991 by the Australian Public Service (APS) bipartite consultativegroup that found that ‘training was generally designed for and required full-time participation’. Romeyn has identified a number of factors that actively block thehuman capital development of part-time and casual work. These are:

• Institutional – the cultures of most workplaces still see non-standard workers as peripheral and as a result do not fully include them in their training anddevelopment plans.

• Organisational – the concentration of these workers into low-ranking jobs tends to be reinforcing and prevents access to advancement and the training required for

advancement.• Attitudinal – management presumptions about the motivations of non-standard

workers and their level of commitment to the firm.

• Structural (particularly the provision and delivery of training) – access to trainingand promotion may be constrained by the structure and timing of courses whichare organised around a full-time schedule (Romeyn, 1992 cited in Mangan, 2000:139).

The OECD (2002), using probit models of training participation that control for individual and job characteristics, found that temporary workers are significantly lesslikely than permanent workers to receive formal training from their employers in 12European countries. However, they argue that taking account of informal (on-the-job)training would probably give a more positive picture of the amount of trainingreceived by temporary workers. The OECD (ibid: 159) stresses that temporary jobsoffer work experience, irrespective of whether formal training is offered, and thuscontribute more to human capital accumulation than “many forms of non-employment”.

Likewise, industry organisations maintain that temporary help workers receive aconsiderable degree of training (Lenz, 2001). This view is supported by some survey



evidence in the US, according to Segal and Sullivan (1998).43 In addition to technicalskills that temporary workers may be able to acquire, for instance in the use of computer software, they may also be able to acquire useful information about howwell they are suited to a particular field. They may therefore acquire more humancapital more rapidly than workers in standard jobs (ibid ).

The implications of the ‘training deficit’ also depend on the mobility patterns

associated with these jobs. In other words, if the temporary jobs are ‘stepping stones’,then less training may not be a concern. If the worker is ‘trapped’ in a temporary job,however, then their longer-term career prospects may be compromised as a result of limited training opportunities. Implications also depend on the characteristics of theworker. For example, a student whose primary source of training or skilldevelopment is derived from their study will not be affected adversely in the way anon-student without qualifications might be.

6.5 Trade unions – their relationship with non-standard work

There is little empirical information available on the relationship between unions and

the level of non-standard employment. Mangan (2000) argues that trade unions arestruggling to cope with the changing labour market. Unions are less attractive to non-standard workers than traditional workers, and unions themselves are uncomfortablewith the concept of non-standard work.

Mangan (2000) argues that the increase in non-standard working arrangements hashelped in the decline of trade union membership, although he acknowledges that itmay be difficult to establish a direct causal effect. The inverse might also be true, inthat declining union membership or, more importantly, union influence may havecontributed to the increase in non-standard working arrangements. Most unions haveonly recently begun to consider how non-standard employment could be made to

work for, rather than against, workers and unions (ILO, 1997).

Wooden and Hawke (1998) measure the level of union influence by way of amultivariate analysis, taking account of a number of explanatory variables. They thenassess the association between the level of casual employment and unions. As theyhypothesised, the presence of ‘active’ unions in the workplace appears to impede theuse of casual employment, with the estimated probability of hiring casuals at suchworkplaces about 80 percent less likely than at comparable workplaces where unionsare either absent or not active.

Carroll (1999) argues that changes in unionisation in New Zealand may affect the

supply of non-standard workers, given it is often suggested that unions encouragestandard employment. Trade union membership has declined quite steeply over thelast 15 years and Carroll (ibid ) suggests this may have contributed to the rise in supplyof non-standard workers.

It is envisaged that the Department of Labour’s evaluation on the ERA will givefurther insight into the relationship between casual workers and unions.

43 Krueger (1993) and Bureau of Labor Statistics data analysed in Autor (1998) (see Segal and Sullivan,1998: 2).



6.6 Mobility

It is necessary to look at mobility into and out of casual and temporary jobs in order toassess whether they are a ‘stepping stone’ towards gaining access to permanentemployment, an ‘interlude’ between spells of unemployment, for example, which mayor may not be desirable for the worker, or a ‘trap’.

Determining this will make the significance of precarious work, in terms of labour market inequalities, clearer. In other words, if mobility from precarious jobs to permanent jobs is high, then implications arising out of these jobs may be lesssignificant. If, however, there is a tendency for people, or particular groups of people,to be ‘trapped’ in these jobs, then the longer-term effects, which might include poverty, lack of training and career progression, or stress caused by insecurity, may beconsiderable.

The issue of precarious employment and job mobility is extremely important in termsof lifetime worker welfare. The consequences of precarious employment are quitedifferent if it is the same group of workers in those jobs throughout their working

careers, compared to a situation where all workers during their careers ‘cycle’ throughthose jobs for a short amount of time.

This issue is the focus of considerable research internationally. In the UK there isevidence for both the ‘stepping stone’ and the ‘interlude’ propositions. Employmentin temporary work has been found to be associated with multiple spells of unemployment (Casey, 1988), but it is also likely to be a stepping stone out of unemployment or non-employment (Rubery, 1989).

Likewise the OECD (2002: 25) finds evidence consistent with the both the ‘steppingstone’ and the ‘trap’ metaphor. Overall, many temporary workers “manage to keep a

foot in employment over the medium term” and furthermore, a “considerable share of temporary workers move into permanent jobs over a relatively short time period”.However, evidence also suggests that others stay in temporary employment or becomeunemployed. The OECD states that it is difficult to judge how many in this latter group are ‘trapped’ in temporary jobs, because some people may choose to stay inthese jobs and the test period of two years is a relatively short time horizon.

The OECD (2002) draws together a number of studies and presents new evidence.However, data is only analysed for European countries and, as they acknowledge,differences in data sources and methods limit the comparability of their researchfindings. Some of their results indicate the following:

• Mobility into permanent jobs is highest for medium to highly educated persons between the ages of 25 and 34 who have not been unemployed in the previous fiveyears. Typically, worker and job characteristics associated with lower mobilityinto permanent jobs are also associated with an increased risk of falling intounemployment.

• Less educated workers in Mediterranean Europe are 17-24% less likely thanhighly educated workers to move from temporary to permanent jobs.



• Having been unemployed in the previous five years particularly reduces the probability of moving into permanent jobs in Austria and Germany (by 23% and33%, respectively).

• Temporary workers in small firms are less likely than those employed by larger firms to find permanent jobs.

Key empirical studies from the US include Houseman (1997) and Lane et al. (2001).Lane et al. – looking at temporary agency work as opposed to temporary work per se

– found survey-based evidence suggesting that few temporary agency jobs lead to permanent employment. Only five percent of companies report hiring agencytemporaries to fill positions for more than one year. However, this does not take intoaccount the desire of the employee which may be to remain in temporaryemployment. Unemployment Insurance wage record data also suggested that fewtemporary jobs become permanent. Roughly six percent of persons with temporaryagency jobs may have obtained full-time non-temporary employment through atemporary job (ibid ).

Houseman (1997), on the basis of data from the US employer survey, also found that

a very small number of temporary work positions – including fixed-term contract, on-call, contracting out and seasonal workers – are transformed into permanent jobs. Nonetheless, 40-55% of the establishments surveyed reported that they occasionallymoved temporary workers to permanent jobs.

However, these studies are based upon the question of whether the individual movesfrom temporary employment to permanent employment in the same firm. Whether or not a temporary worker has gained a permanent job at another firm does not appear tohave been considered in either of the studies. Moreover, with respect to ‘seasonalworkers’, it could not be considered that a firm would turn a seasonal job into a permanent one.

Lane et al. (2001) suggest that the alternative to work in temporary help agency work might not be standard employment, but rather nonemployment. Thus, in anexamination of outcomes such as wages, employment duration, and benefits a year later, they suggest it might be more appropriate to compare temporary help workerswith nonemployed workers rather than workers to standard employment.

They found that individuals who had a spell in temporary help work had worseearnings and employment outcomes a year later than did similar individuals with aspell in standard employment. On the other hand, individuals who had a spell intemporary help work fared substantially better a year later than did similar individuals

who had a spell in nonemployment – for example, they were nearly twice as likely to be working one year later than were their counterparts. “Although temporary workersdo fare worse than those employed in standard work, their outcomes one year later aremuch closer to those of standard workers than those of nonemployed workers” (Laneet al ., 2001: iii).

In contrast to Lane et al.’s work on temporary help workers, Stewart (2000) andRichardson et al . (2002)44 find evidence to suggest low wage jobs in general are not

44 A literature review for the NZ Treasury by the National Institute of Labour Studies.



necessarily pathways to better outcomes. While low wage jobs per se are not thefocus of this paper, some commentators argue that people in low end non-standard jobs are the same people that other studies identify as receiving low pay (Brosnan andScully, 2002).

The movement between low wage employment and unemployment in the UK isexamined in detail by Stewart (2000). His work empirically controls for a range of

observed and unobserved characteristics that predict unemployment/low wage, suchas age and education.45 He argues that a large part of the reason for the persistence inunemployment is the quality of the jobs that re-entrants get, which tend to be low paidand unstable, or ‘dead-end’ jobs and he finds evidence of a “low pay – no pay cycle”(ibid : 1).

In short, Stewart (ibid ) presents evidence that the low paid are more likely to becomeunemployed in the future and the unemployed are more likely to be low paid on re-entry to employment. He finds the impacts of unemployment and low pay to besimilar, both on the probability of unemployment in the next period and on the probability of low pay, and that low paid jobs act as the main conduit for repeat

unemployment and considerably increase its probability.

He concludes:The policy objective, rather than simply being to get an unemployedindividual into any job, should be to get him or her into a “good” job …typically low paid jobs are not “good” jobs in this sense. The results of the paper are consistent with the hypothesis that a low paid job does notaugment a person’s human capital significantly more than unemployment.If unemployed individuals’ employment prospects are to be permanentlyimproved, they need to gain access to jobs where they can augment their skills, raise their productivity and move up the pay ladder (Stewart, 2000:28).

Data from the US on temporary help workers, albeit a narrower group than low wageworkers in general, contradicts these findings. Heinrich et al . (2002)46 explore theeffects of temporary help firms on the labour market outcomes of welfare recipients(compared to welfare recipients who are hired directly by the firms in which theywork) by looking at the characteristics of welfare recipients who go to work for temporary service firms and by examining their subsequent employment and welfaredynamics. They use administrative data on all welfare recipients in Missouri and North Carolina and all employment covered by unemployment insurance in these twostates. Their results show that, although welfare recipients in temporary help jobsreceive lower earnings and have less promising prospects for movements from

welfare than those who have jobs in other industries, these differences are small onceindividual characteristics are controlled for. Overall, they find that those in temporaryhelp jobs have significantly better future prospects than those who are not holding jobs; they are no more likely to be unemployed than those taking jobs in other industries; and are only slightly more likely to remain on welfare.

45 Stewart (2000) looks directly at the comparison between being unemployed and holding a low wage job, on both wages and employment one and two years later, while holding constant a range of personalattributes. He uses UK data from the BHPS and includes people aged 18-about 65.46 http://cep.lse.ac.uk/seminarpapers/22-11-02-TRO.pdf



Consistent with Stewart’s (2002) overall findings and in contrast to Heinrich, et al ’s(2002), Richardson et al .’ s (2002) review of the literature argues that there is littlesupport for the view that any job is better than no job in improving prospects for future employment or escape from low wage jobs. She argues that the conclusionfrom the psychological literature about the consequences for mental well-being of unemployment compared with employment in a poor job supports this finding.“Studies consistently suggest that ‘bad’ or unsatisfactory employment is no better for

a person’s psychological well-being than having no job at all”.

Psychologists report that employment prospects are better if you come from a highsocio-economic status, well-adjusted two-parent family and are confident, motivated,intelligent and have good relationships with your peers when you are young. Thesefactors work on employment prospects both directly and indirectly via achievement inthe education system (Richardson et al ., 2002).

The main sources of upward mobility are finding a better job match, obtaining wagegrowth on the job as a result of accumulating skills, and undertaking formal educationcourses off the job. The opportunity to move up the wage ladder through on-the-job

training or job mobility differs systematically among low wage workers (ibid ).

Richardson et al . (ibid ) find that upward mobility is higher for men than for women,and for more educated workers. Teenagers employed on or near the minimum wagehave high rates of upward wage mobility. In contrast, for older, less educated andfemale workers, low wages are likely to be a trap rather than the first step on theladder. An important group that is particularly prone to low wages is mothers of young children, and sole mothers in particular. Instead of providing a pathway intohigher-wage jobs, sole mothers appear to become stuck in low wage jobs indefinitely because these jobs do not provide opportunities for skill development. In addition,older workers who have lost reasonably well paid jobs face substantial wages losses

that last for a long time, indicating that training and mobility are not effective pathways for them.

An important policy issue is not only mobility out of temporary work into permanentwork, but also the interface between the benefit system and temporary or casual work – how does the benefit system currently interact with these jobs? There is limitedinformation from the US on this issue and a New Zealand study, referred to below.

Some states in the US have begun to refer unemployment insurance and welfarerecipients to temporary help agencies with the implicit assumption that these placements will provide avenues for permanent jobs (Houseman, 2000). While, as

Houseman argues, it is possible that temporary placements will provide workers with job experience that will help them find permanent jobs with other employers, veryfew are likely to find permanent jobs with the client firms, given that these jobsintrinsically have little security.

Others may argue, however, that the objective of US campaigns such as “Get a Job,Get a Better Job, Get a Better Life” is not about placing welfare recipients into permanent jobs with a client company; rather it is about helping people find a jobthrough which they can gain experience, confidence and motivation. In turn, thiswould enable them to find a ‘better job’.



6.6.1 New Zealand research on mobility

New Zealand data from the Ministry of Social Development on trends in benefit exitsinto work over a five year period, from 1996 to 2001, showed evidence of a ‘cycling’effect with workers moving between temporary employment and unemployment.Further, the findings showed a large and consistent discrepancy between the major metropolitan cities and the rural areas with the latter more likely to experience acycling effect.

Over the past five years, urban areas have clearly offered very strong opportunitiesfor sustainable work options while most rural areas offer the opportunity for morefrequent but shorter intervals off benefit (Gilbert, Haig and O’Rourke, 2002: 18).

The authors looked at the amount of time people stayed off benefit after having goneinto work – the overall national average was 30 percent returned within three months;11 percent returned between three to six months; 13 percent returned between six to12 months; and 46 percent were off benefit over 12 months and may never havereturned. There were significant variations occurring between regions – Nelson onaverage had 45 percent of exits over this period return to benefit within three monthsand 58 percent of all exits return within six months. Data for the East Coast was very

similar. The authors suggest that the reason for these high proportions is the labour markets, the way resources are used, and the seasonal short-term labour demands inthese regions. All Auckland regions and Wellington, on the other hand, had low proportions of ‘cycling’.

6.7 Work-family and other social concerns

This last section looks at the human concerns of working in casual and temporaryemployment arrangements for the worker and their family.

The considerable degree of research interest in economic implications has not been

matched by research interest in the social consequences. It is an area in need of further research.

There is some evidence to suggest that non-standard work is more likely to take placein non-standard work hours than is standard work. According to the OECD (2002)temporary workers are somewhat more likely to work night and weekend shifts, asdiscussed earlier. In addition, the incidence of inflexible work schedules issignificantly higher among temporary workers (ibid ).

Evidence from the May 2001 BLS Current Population Survey tells us that flexibleschedules were most common among managerial and professional specialty

occupations. Shift work, on the other hand, was least common among managers and professionals, and greatest among workers in service-orientated professions (wherewe know the highest proportion of temporary jobs exist). Over half (53.3 percent) of those in shift work did so because it was the “nature of the job”. Other reasons for working a non-daytime schedule included “personal preference” (13.3 percent),“better arrangements for family or child care” (8.9 percent), “better pay” (6.9 percent), and “because it allows time for school” (3.3 percent).

Below is evidence from two New Zealand reports, the first looking at inequality innon-wage employment conditions, such as the times of the day when work must be



carried out, and the second examining the impact of shift patterns on workers in the process manufacturing industry.

6.7.1 Evidence from New Zealand

Callister and Dixon (2001) analyse the timing and location of paid work in NewZealand47 and argue that, from the perspective of workers, the timing of a job’s hoursof work is an important attribute that can raise or lower well-being. Given that the

majority of paid work takes place during daylight hours from Monday to Friday, people who work outside these times are likely to face reduced opportunities for social interaction with friends and family in their leisure time. Those who work atnights or on rotating shifts also face greater risks of experiencing health problemssuch as fatigue or sleeping difficulties. People working in the agricultural, forestryand fishing occupations; in the retail, restaurants and hotels industry sector; and in theservices and sales occupational group all recorded much higher average levels of weekend work than did other occupations (ibid ). These sectors are where the highest proportions of temporary and casual work are located.

Overall, Callister and Dixon (ibid ) find that the data suggest a high proportion of

workers undertake small or moderate amounts of work at non-standard times of theday and week – typically early in the morning, in the evening or on weekends. Veryfew people work in the hours that are usually considered to be most problematic – between midnight and 5am. In addition very few workers do all of their paid workinghours at unconventional times of the day.

It is also important to note the distinction between non-standard work for higher endworkers and lower end workers. Higher end workers may be able to take advantageof ‘flexible’ hours (such as allowing paid work to be more readily combined withother activities like education or childcare). Lower end workers are less likely to havechoice over hours and may have uncertain and irregular hours, which creates its own

attendant problems for themselves and for family relations.

A 12-year longitudinal study of process manufacturers in New Zealand, undertaken todocument shift patterns and establish their impact on organisational performance andemployee well-being, found that shiftwork had increased dramatically prior to 1994(Wilson, 1994). This was mainly due to the expansion of service industries andextended hours of operation. Wilson argued that manufacturing was still a dominantshiftwork employer in order to meet variable demand levels, but that this productivitycame at a high human cost in terms of health, safety and quality of life. The majorityof the shiftwork industry was still the eight-hour, reverse rotating shift, with frequentovertime and a low level of training and support. Across the sample, shiftworkers

demonstrated significantly more health, social and related problems such as sleepdisruption, family and social problems, sleep disorders, digestive problems, use of prescription and non-prescription drugs and depression, than standard workers.

6.7.2 Evidence from overseas

The Australian ACTU survey of union members ( Employment Security and Working

Hours, 1998) found that over half the respondents placed increased job insecurity (54 percent) and greater control over working hours (53 percent) as the major

47 The report uses data from the New Zealand Time Use Survey 1998/99.



employment issues that are impinging upon family issues and personal well-being(Mangan, 2000).

Data in Canada point to the same concerns amongst workers when it comes to jobinsecurity. In repeated polling in the 1990s between 42 and 48 percent of Canadiansfear they will lose their jobs in the next five years. This fear is reported as having aneffect upon marriages, family relations and the quality of life (Canadian Labour

Ministry, 1997).

There are significant issues around the social and psychological consequences of insecure work arrangements. Barker and Christensen (1998) note the effect thattenuous attachments to employers and insecure futures within an organisation musthave on workers, given the high premium many workers place on job tenure. Somewriters are of the view that many features of unemployment are similar to those of precarious work (Rodgers and Rodgers, 1989). On the other hand, the work of Laneet al . (2001) finds that outcomes one year later for temporary workers are better thanthose of unemployed workers.



7. Conclusions

The international literature is in agreement that non-standard work forms anincreasingly significant proportion of employment. The OECD (2002: 25) concludesthat temporary employment has grown in a considerable number of OECD countriesin the past two decades. The portrait that emerges, with respect to the growth intemporary employment and its implications for the welfare of workers, is complexand confirms “neither the most optimistic nor the most dire assessments”.

There is general concern about some of the implications of this growth and the possible effects on the quality of working life, both in terms of working conditionsand longer term worker welfare.

For New Zealand, given part-time and self-employment arrangements are consideredto be included in non-standard work, we can state with certainty that non-standardwork has increased over the past 15 years. It is difficult to assess trends in other forms of non-standard work, however, due to lack of data.

With respect to the international empirical evidence, some of the overseas trends mayapply in a New Zealand context and some anecdotal evidence supports the findings of a number of the international studies. However, drawing comparisons and findingcommonalities between these international findings and the New Zealand situationshould be approached with caution. There are significant differences in terminologyused, widely varying country definitions and methods of measuring the many forms of non-standard work, not to mention the different labour markets and regulatoryarrangements.

What is precariousness and how can we measure it?

One of the key problems with the concept of precariousness, as with non-standardemployment, is that there is no commonly accepted definition and the literaturerecognises this, referring to its inherently ‘fuzzy’ nature.

There is a commonly held view that in order to decide whether a job might beconsidered precarious, criteria are required. The set of criteria generally include:work with low wages, low job security, higher health and safety risks, little or nocontrol over workplace conditions or hours of work, and limited opportunity for training and skill development.

It is not any single criteria but the combination of them that influences the level of precariousness. The elements involved are therefore multiple and there are different

dimensions and degrees of precariousness. There is also considerable ambiguity. For example, an unstable job or a low paid job is not necessarily precarious, given thatthere may be other compensatory characteristics of the job. Rather it is somecombination of these factors which causes precariousness.

One way of responding to this problem is to develop a set of indicators that weconsider relevant in a New Zealand context. The review has suggested ten indicators(see Section 3). In addition, an important issue to consider in assessing precariousness is worker preference. Students are more likely to have a higher



preference for temporary or casual jobs than adults who are ‘primary’ earners in ahousehold with dependents. It is the interaction of the nature of jobs and worker preferences that determine what constitutes precarious employment.

The welfare impacts also depend on the preferences of those affected – the precariouscharacteristics of a job would have greater adverse welfare consequences for older workers with dependents than for young full-time dependent students.

Where is ‘lower end’ non-standard work located and what are the characteristics of

people associated with these work forms?

International research indicates that the highest concentrations of temporary jobs areto be found in agriculture and the unskilled, predominantly manual jobs that areconventionally held by men and in less skilled service jobs conventionally held bywomen. In New Zealand, results from the two workplace surveys in 1991 and 1995found the Community and Personal Services sector had by far the highest proportionof casual workers at 30 percent. The result was even higher in a US study(Houseman, 2000), which found that casual workers made up 44 percent of theservices industry; the incidence of contract workers was highest in the mining and

construction industries at 61 percent. An Australian study (Wooden and Hawke,1998) found that workplaces where demand was seasonal had an average 25 percenthigher share of casual workers than workplaces where demand was not seasonal.

Apart from the New Zealand workplace surveys, there is little empirical informationabout occupational profiles of casual and temporary jobs in New Zealand. A number of sectors have been investigated, including retail, forestry and the accommodation,winemaking and brewing industries. These studies report some evidence of precarious non-standard work. However, while informative, they are not quantitativeand therefore not statistically generalisable.

With respect to location in the public and private sector, evidence from Australiaindicates that, with the exception of some part-time work, casual work isdisproportionately contained within the private sector. For New Zealand, non-standard workers overall were evenly spread in the private and public sectors in 1995(as opposed to 1991 where there was a higher proportion of non-standard workers inthe public sector than the private sector) (Brosnan and Walsh, 1996). The authorssuggest that the change resulted from a combination of public sector restructuringhaving slowed since 1991, whilst the private sector’s capacity to reshape its workforcewas enhanced following the Employment Contracts Act 1991.

In terms of enterprise size, research evidence from the OECD (2002) and Australia

(Wooden and Hawke, 1998) found that smaller firms are more likely to hire workerson casual or temporary contracts than are medium-and large-sized firms.

The overseas literature is in agreement on the characteristics of workers in precariouswork – they are more likely to be women, young, of an ethnic minority, and less-skilled and -educated. The OECD (2002) finds that, whilst there are gender differences, they are only large in a few countries. The difference is minimised giventhat the highest concentrations of temporary jobs are in manual jobs that areconventionally held by men. They stress that, despite temporary jobs being



disproportionately held by younger and less-educated workers, temporary workers arenonetheless a diverse group.

International and New Zealand evidence suggests that men are more likely to be inhigher end forms of non-standard employment such as contracting and consulting, asopposed to women who are predominant in the lower end forms such as casual work.

What determines the extent of non-standard/precarious work and what factorscontribute to its growth?

The overseas literature indicates that the explanatory factors contributing to the extentof non-standard employment – supply-side, demand-side and institutional factors – donot interact in equal ways. Supply-side factors are more likely to predominate for thehigher end non-standard arrangements, such as self-employment and part-time work,as opposed to lower end non-standard jobs whereby evidence suggests that demand-side factors are more likely to predominate. At the same time, US evidence indicatesthat most workers in these jobs take them for personal rather than financial reasons,that is, family or personal obligations, school, training, or the need for a flexibleschedule.

In the main, the literature tends not to emphasise the supply-side explanations for temporary and casual work. We know that the increased participation of women inthe workforce and the need for both parents to combine family responsibilities with paid work may lead to a preference by some for work in non-standard hours (or alternatively, lack of availability of childcare may necessitate it). Likewise, thosesuffering from ill-health or injury, or workers wishing to make a gradual transitionfrom work to retirement may find casual or temporary work a good option,48 although part-time employment may be more attractive than casual or temporary work.

Students also may opt for casual or temporary work as a way of supplementing

income while studying. The increase in the share of tertiary students may contributeto numbers of temporary and casual workers overall. The work skills gained fromthese kinds of employment arrangements are likely to be less important than theeducational qualifications. The same could be said for mobility out of these jobs. Theconcern over whether they are stepping stones or traps may not be an issue for students who view them as short-term jobs whilst studying.

Temporary jobs can also be useful for those workers who wish to ‘job shop’ as a wayof gaining work experience in different sectors and assessing available work opportunities or potential employers. Of course, the benefits offered by temporary jobs, including hours flexibility, may only be beneficial to a particular demographic

such as the young and/or well-educated. For older workers, or those with youngchildren, ‘hours flexibility’ may simply signify ‘unpredictability’ and all the attendant problems this causes.

Motivations of employers for using non-standard work arrangements range fromminimising costs and accommodating fluctuations in workload to avoiding thedesignation of an individual as an employee and thereby avoiding provision of and

48 The Department’s recent firm visits provided examples of both these scenarios. One worker who had been unwell for an extended period was choosing to return on a casual basis; and a retired person waskeen to work on a casual basis and maintain some contact in an industry he was familiar with.



payment for work-related benefits and regulations around dismissal. To a lesser extent, trialling new workers was also found to be a motivating factor behind the useof temporary contracts, although evidence suggests that the proportion of workersmaking the transition from temporary to permanent contract within the same firm isextremely low.

The Department’s recent firm visits found some results not captured in the

international research, namely the distinction between large and small firms and thelimited choices facing small firms looking to expand. Achieving growth byincreasing permanent staff was not financially viable according to many small firms.Small firms also felt compliance issues around dismissal procedures wereconsiderably more onerous than the larger firms and this led to the desire to employnew staff on a trial basis on temporary contracts.

In thinking about the determinants of precarious work, other factors to consider include firm production technologies, bargaining power and union influence.Temporary and casual jobs are more likely to have a higher proportion of people withlimited personal bargaining power as well as limited expectations of improving

conditions through collective bargaining. The form of their employment also makes ithard for trade unions to organise them – their workplace and the labour force may beconstantly changing.

Furthermore, bargaining power over wage and non-wage conditions may have greater credence at the higher end of the non-standard labour market, but at the lower end thechoices are more limited. Workers in these jobs have little to bargain with if they arelow skilled, have no qualifications, have skills that are widely available, or (particularly for women with young children) are only available at certain hours. If their only alternative is an equally poor job or unemployment, there is little incentivefor their employer to offer better pay or other compensating features.

Explanations for the growth of non-standard employment, as with its existence at a point in time, relate to a combination of supply-side, demand-side and institutionalfactors. Supply-side factors include the substantial increase of female participation inthe workforce and their propensity to work in non-standard, particularly part-timeemployment; changing family structures; the need to combine family responsibilitieswith paid work; the need to access childcare; and an increase in the share of young people who are students.

Demand related reasons include the desire of employers for a more flexible labour force in response to changing product market conditions such as customer’s

requirements of individual and just in time production. An increase in competitive pressure may also have led to greater product demand uncertainty. In addition, theeconomy has shifted away from the production of goods, and toward services, inwhich part-time and casual work has always been more important. Quantitativeresearch suggests that demand-side factors provide more likely explanations for changes in the level of lower end non-standard employment than supply-sidecharacteristics.

Institutional factors such as minimum wage requirements and other regulatoryarrangements may also affect the extent of precarious employment. Greater labour



market flexibility in Australia and Spain was seen to encourage an increase in non-standard employment. However, the easing of labour laws in New Zealand in the1990s did not appear to result in the expected increase of casual and temporary jobs,at least in the first half of the decade for which we have data. This may have been dueto the Employment Contracts Act making it less costly for employers to have full-time permanent employees work longer hours.

In summary, determining the predominant causes for the extent and growth of non-standard employment is complex and requires further research, as does the effect of regulatory arrangements.

Why are we concerned with precarious work … what are the implications?

A number of concerns are highlighted in the literature around the potential economicand social implications of precarious work. With respect to economic concerns,earnings differentials for ‘lower end’ non-standard workers are well researchedinternationally, although no New Zealand evidence is available. The distinction between the economic consequences for higher end as opposed to lower end non-standard work is significant. For example, the US Bureau of Labor Statistics figures

finds there is no earnings penalty and maybe even an earnings premium for theindependent contractor (who is likely to be white, male and educated), whereastemporary agency workers (likely to be black, female, poorly educated and singlemothers) are at particular economic risk.

An area that receives less attention in the literature is the possible explanatory factorsfor the difference in pay and shorter tenure, such as the different demographiccharacteristics of the workers as opposed to the nature of the work. As Lane, et al

(2001) argue, the impact of alternative work on employees depends on a number of factors, such as the type of work arrangement the worker is in, the reason the firmhired the worker, and the demographic characteristics of the worker.

The OECD (2002) found that temporary jobs pay less than permanent ones. Bycontrolling for differences in individual and job characteristics they found the wage penalty associated with temporary employment was reduced, but that it was stillstatistically and economically significant. The wage penalty for temporary work wassimilar for women and men.

There is considerably less information on the employment relations implications for workers engaged in non-standard/precarious work arrangements. While this area may be the focus of a number of overseas studies, the findings are less relevant because of the widely varying regulatory arrangements in other countries. We do have some

information from New Zealand case studies (such as Whatman, et al , 1999), whichsuggests that non-standard employees (with the exception of the higher end group)fare worse than standard employees in the negotiation of employment contracts.Access to minimum code provisions such as wage and holiday provisions and other entitlements also tends to be lower than for standard workers.

In addition, it is argued by international commentators that the increase in non-standard working arrangements may be associated with the decline of trade unionmembership, and trade unions are less likely to be involved with the non-standardworkforce (for example Mangan, 2000). This may impact on the bargaining power of



some non-standard workers, particularly those who may already be at a disadvantagein terms of their educational background and occupational skill level.

Changes in unionisation may affect the supply of non-standard workers, as it is oftensuggested that unions encourage standard employment. Results from empiricalresearch in Australia show that the presence of ‘active’ unions in the workplaceappears to impede the use of casual employment – to the extent that the estimated

probability of hiring casuals at such workplaces is about 80 percent less likely than atcomparable workplaces where unions are absent or not active. There is no empiricalresearch information available in New Zealand.

The overseas literature indicates that the impact of increased non-standard work onworkplace health and safety is an area greatly in need of further research. Both casestudy and quantitative research indicate that employees with a temporary or fixed-term contract have less access to training, including OSH training. It also indicatesthat these employees have less control over their working time, have fewer career prospects and perform less skilful tasks (The European Agency for Health and Safetyat Work 2002). The European Agency (ibid ) found that precarious workers in general

are more exposed to physical work hazards, they do the dirtiest and most dangerous jobs, they may experience stress from insecurity, and they may be more difficult toreach in order to provide OSH services such as information or occupational healthservices.

With respect to workplace training, overseas data point to a shortfall in training for temporary and casual employees, compared with permanent employees. The gap inaccess to training does not appear to be narrowing. Given that most reports into theissue of non-standard work and training in the workforce are pessimistic, the possibleimplications this has for the future skill level of the workforce are significant. Again,the disadvantages are greater for ‘lower end’ non-standard workers who may

experience difficulties self-funding training, as opposed to ‘higher end’ non-standardworkers (such as independent contractors) who are more likely to be able to self-fundtheir own training. Furthermore, the implications are dependent to a large extent onwhether there is high or low mobility out of these jobs and into permanent work.

To assess whether precarious non-standard jobs are ‘stepping stones’ towardsstandard employment or long-term ‘traps’, it is necessary to look at mobility into andout of temporary and casual jobs. The issue is the focus of considerable internationalresearch currently and it would seem there is evidence for both these propositions.

US studies in particular (Houseman, 2000; Lane et al ., 2001; Segal, 1996) find

evidence suggesting that few temporary jobs lead to permanent employment with thesame employer, and there may be a ‘cycling’ effect with temporary workers moving back and forward between the states of unemployment and temporary work. NewZealand data on benefit exits into work illustrate this cycling effect in some ruralareas where seasonal employment is a significant part of the labour market. However,as with pay differentials, comparing outcomes of non-standard workers with standardworkers may be misleading because certain characteristics such as skill levels,education and age will be different.



Lane et al. (2001) argue that assessing the outcomes of ‘at-risk’ non-standard workersdepends on whether the comparison group is standard workers or nonemployedworkers. They find that individuals in temporary work had worse earnings andemployment outcomes a year later than individuals in standard employment; yetindividuals in temporary work fared substantially better a year later than did similar individuals in nonemployment.

In contrast, Stewart’s (2000) UK study on low wage employment and unemployment,which controls for a range of observed and unobserved characteristics such as age andeducation, finds that the impacts of unemployment and low pay are similar and thatthe low paid are more likely to become unemployed in the future. Likewise,Richardson et al .’s (2002) review of the literature argues that there is little support for the view that any job is better than no job in improving prospects for futureemployment or escape from low wage jobs. She finds that the conclusion from the psychological literature is that ‘bad’ or unsatisfactory employment is no better for a person’s psychological well-being than having no job at all.

Research interest in economic implications of non-standard/precarious work is not

matched with interest in the non-wage employment conditions, such as times of theday when work must be carried out and the social consequences of this.

Non-standard working schedules can be beneficial for workers who wish to combinetheir paid work with other activities such as study. However, at the other end of thespectrum is the scenario where the flexibility is enjoyed solely by the employer, andworkers experience uncertain and irregular work hours. Overseas evidence andlimited New Zealand evidence indicate that shiftwork and nightshifts (as well as jobinsecurity) all impact negatively on a worker’s health, well-being, family relations andquality of life.

Where to from here?In presenting a framework for analysing precarious work, and evidence on itslocation, this review lays the groundwork for future research in the area. It is clear from the review that an area for further consideration is the very limited quantitativeand qualitative data on casual, temporary and fixed-term employment in NewZealand.

Findings from the international studies indicate that there are potential policyconcerns for lower end non-standard workers around earnings differentials, health andsafety issues, workplace training, career progression, employment relations, andfamily and other social and psychological issues. Unfortunately this is an area where

there is a considerable knowledge gap in New Zealand, therefore further researchwould be needed in order to reach any sound conclusions.

Information on demand and supply issues, factors that drive employer/employee behaviour, and issues around bargaining power and worker preference would beuseful in helping to understand the New Zealand situation. Other key areas whereinformation gaps exist include the impact of union influence and whether or not thereis a relationship between unions and the level of non-standard employment; what theimpacts are on the wage progression and skill acquisition of precarious non-standard



workers and, more generally, on the labour markets where these forms of work are prevalent.

The effect of institutions and regulatory arrangements on the incidence of non-standard/precarious work is another issue which further research will need to address.It would be useful to compare New Zealand with other countries in terms of how non-standard work is regulated and to examine how shifts in regulations and labour market

flexibility have influenced the level and growth of non-standard/precariousemployment over time. Other questions centre around whether increased regulationslead to increased or decreased demand for non-standard/precarious workers; what thecosts and benefits of policy responses in this area are; and whether targeted measuresto shield workers from undesirable employment conditions are more or less effectivethan general measures.

In order to address these knowledge gaps, one-off and repeated cross-sectionalsurveys would be useful to collect quantitative information (and possibly qualitativeinformation on outcomes and preferences). The most important starting point would be to determine the incidence and scope of non-standard/precarious jobs in New

Zealand.

It would be useful for data collection to have a longitudinal dimension to track patterns over time and examine issues such as occupational mobility and the degree towhich these jobs may be traps or stepping stones. The issue of precariousemployment and job mobility is extremely important in terms of lifetime worker welfare. Cross-section perspectives, such as information on the percentage of casual jobs at a point in time, can provide only a limited perspective on this issue. Theconsequences of precarious employment will be quite different if the same group of workers are in these jobs throughout their working careers, as opposed to a situationwhere all workers during their careers ‘cycle’ through these jobs for a short amount of

time.

Longitudinal data could enable longer-term impacts of scarring effects of precariousemployment to be measured. It could also capture information on whether theoutcomes for lower end non-standard workers are relatively better or worse than for those who are unemployed or in standard employment and what the transition pathsare that people take between these states over time.

The OECD’s (2002) thoughts on future work in this area include the following:

[P]olicies to shield temporary workers from the undesirable employmentconditions sometimes associated with temporary jobs – especially, long-

term traps in precarious employment – deserve serious attention.However, such measures would have costs as well as benefits and specific policy options would need to be analysed carefully. Accordingly, studiesof whether access to benefits should be eased for temporary workers or policies implemented to facilitate transitions from temporary to permanent jobs would be of great interest. It would also be important to assesswhether such policies are best targeted at certain disadvantaged categoriesof temporary workers, along the lines of what is already done for unemployed persons in some OECD countries, or if more general measureswould be more effective, such as modifying rules concerning minimum



qualification periods for fringe benefits, maximum allowable durations of temporary jobs or access to training (OECD, 2002: 26).



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Appendix OneDefinitions of temporary employment in selected OECD countries’ labour force

surveys

Coverage Questionnaireask whether the

job is:

Are fixed-termcontractsseparable fromagencyworkin ?

Is agencyworkingincluded?

Specialcategoriesidentifiable

Australia Employees Casual Not applicable Not knownBelgium All working

(includingself-employment)

Temporary job or fixed-term contract

No Yes Probationarycontracts andparticipants inspecialmeasures

Canada Paid workers,employees

Job with a specificend-date

Denmark Employees Temporary job Not applicable Yes NoFinland Employees Fixed-term contract

for a specific task,replacementcontract or jobcreationparticipants

Yes Not known Participants inspecialmeasures

France Employees Agency work,

apprentices,trainees (includingthose on specialmeasures), time-limited or seasonalcontracts

Yes, time-limited

and seasonalalso separable

Yes Temporary

employees inthe public sector

Germany Employees Time-limitedcontracts includingapprenticeships

Not applicable No (have open-ended contracts)

Apprentices

Greece Employees Temporary job or fixed-term contract

No No (notpermitted)

Probationarycontracts

Ireland All working(includingself-empl’t)

Occasional or seasonal job

No Yes No

Italy Employees Temporary job Not applicable No (notpermitted)

Probationarycontracts

Japan Employees Employed on a

contract lastingmore than 1month, but lessthan 1 year

No Not known Day workers

Luxembourg Employees Time-limitedcontracts, includingapprenticeships

Not applicable Yes Probationarycontracts andapprentices

Netherlands Employees Agency work, oncall contract or replacementcontract

Yes Yes Probationarycontracts andtemporarycontracts, unlessthere is no timelimit

Portugal All working(includingself-empl’t)

Non-permanentcontract

Not applicable Yes No

Spain Employees Temporarycontract or job

No Allowedrecently, verystrict limitations

Probationarycontracts,seasonal or temporary work

United Kingdom Employeesnot in specialmeasures

Seasonal job,fixed-term contract,agency work,casual work, andother temporarywork

Yes Yes Participants inspecialmeasures andtemporaryworkers (no timelimit on contract)

United States All working(includingself-employment)

Lack of an implicitor explicit contractfor ongoingemployment

Not applicable Yes Workers who donot expect their

job to last

Source: (OECD, 1996: 7)



Appendix TwoDefinitions of temporary employment used in the OECD (2002) report

Temporary employment Data source

Australia Workers with a fixed-term contract; employed bytemporary agencies; seasonal workers

Forms of Employment Survey, 1998(data relate to 1997).

Austria Employees with a fixed-term contract; interim workthrough a temporary work agency; apprentices and

trainees; probationary period; contract for a specific task;daily workers.

Austrian Labour Force Survey

BelgiumDenmarkFranceGermanyGreeceIrelandItalyLuxembourgNetherlandsPortugalSpainUnited Kingdom

In the majority of the European Union countries most jobs are based on written work contracts. A job may beregarded as temporary if it is understood by bothemployer and the employee that the termination of the

job is determined by objective conditions such asreaching a certain date, completion of an assignment or return of another employee who has been temporarilyreplaced. In the case of a work contract of limitedduration, the condition for its termination is generallymentioned in the contract. To be included in thesegroups are also: a) persons with a seasonal job, b)persons engaged by an employment agency or businessand hired out to a third party for the carrying out of a“work mission” (unless there is a work contract of unlimited duration with the employment agency or

business), c) persons with specific training contracts.

Eurostat, European Union Labour Force Survey

Canada A temporary job has a pre-determined end date or willend as soon as project is completed (including seasonal

jobs).

Canadian Labour Force Survey

Czech Republic Workers with a fixed-term contract; employed through atemporary work agency; apprentices and trainees; onprobationary period; occasional, casual or seasonalworkers; individuals carrying out community work asunemployed; workers with a contract for a specific task.

Czech Labour Force Survey

Finland Workers whose main job is with a fixed-term contract;trainees; workers on probationary period; other jobs thatare considered as temporary by respondents.

Finnish Labour Force Survey

Hungary Workers whose main job is with a fixed-term contract;apprentices and trainees; workers on probationaryperiod; individuals carrying out community work asunemployed; workers with a contract for a specific task;

individuals employed on jobs lasting less than 12months; daily workers and others.

Hungarian Labour Force Survey

Iceland Workers whose main job is with a fixed-term contract;doing interim work through a temporary work agency;apprentices and trainees; workers on probationaryperiod; occasional, casual or seasonal work.

Iceland Labour Force Survey

Japan Workers whose main job is with a fixed-term contractlasting not more than one year; doing occasional, casualor seasonal work; working on a job lasting less than 12months.

Japanese Labour Force Survey

Korea Workers whose main job is with a fixed-term contract;temporary agency workers; on-call workers; seasonalworkers; workers who do not expect their job to last for involuntary, non-economic reasons.

Summer 2001 Supplement to theKorean Labour Force Survey

Mexico Workers whose main job is with a fixed-term contract;occasional, casual or seasonal work; workers with acontract for a specific task; employed in a job lasting lessthan 12 months.

Mexican Labour Force Survey

Norway Workers whose main job is with a fixed-term contract;interim work through a temporary work agency;apprentices and trainees; workers on probationaryperiod; occasional, casual or seasonal work; workerswith a contract for a specific task; individuals with a joblasting less than 12 months; daily workers.

Norwegian Labour Force Survey

Poland Workers whose main job lasts less than 12 months. Polish Labour Force Survey

Sweden Workers whose main job is with a fixed-term contract;apprentices and trainees; workers on probationaryperiod; occasional, casual or seasonal work; individualscarrying out community work as unemployed; individualswith a contract for a specific task; daily workers.

Swedish Labour Force Survey



Temporary employment Data source

Switzerland Workers whose main job is with a fixed-term contract;interim work through a temporary work agency;apprentices and trainees; occasional, casual or seasonalwork; individuals carrying out community work asunemployed; individuals with a contract for a specifictask; daily workers.

Swiss Labour Force Survey

Turkey Workers whose main job is occasional, casual or

seasonal work; daily workers or other persons whodepend only on an employer and do not work regularlyand for unlimited duration; seasonal or temporaryworkers or on-call workers (ex. Construction workers,etc).

Turkish Labour Force Survey

United States Dependent workers, temporary help and contractcompany workers who do not expect their job to last.

Contingent and Alternative WorkArrangements Supplements to theCurrent Population Survey, 1995and 2001.

(Source: OECD, 2002: 172).



Appendix Three

Regulatory Framework for Employment Relations

(Employment Relations Service, http://www.ers.dol.govt.nz/)

The Employment Relationship

Who is an employee and who is not?

An employee is:

• anyone who has agreed to be employed, under a contract of service, to work for some form of payment. This can include wages, salary, commission and piecerates.

This includes:

• homeworkers

• people who have been offered and accepted a job

• fixed-term employees• seasonal employees

• casual and part-time employees

• probationary and trial employees.

An employee is not:

• a self employed or independent contractor

• a sharemilker

• a real estate agent whose agreement says they are an independent contractor

• a volunteer who does not receive a reward for working. The fact that volunteersreceive some payment to cover their expenses does not make them employees.

(If people are called by a different title, e.g. temporary rather than fixed-term, it stilldoes not change their status as an employee).

People intending to work are employees

The Employment Relations Act 2000 says that people who have been offered andhave accepted employment are employees from the date of acceptance. They have therights of employees. This applies even if the employees have not actually started todo the work.

Fixed-term and seasonal employees

Sometimes employers and employees agree that employment will be for a set periodof time (e.g. for six months) or until a certain event occurs (e.g. until a particular project ends) or until work is completed (e.g. until the fruit is picked).

The basic rights and obligations of employees and employers apply to fixed-term andseasonal employment, except that the employment relationship ends at the end of thefixed term.



Casual or part-time employees

Sometimes employment is on a “casual” basis. In other words, the employer andemployee agree that the employer will offer the employee work when work isavailable. Temping agencies often employ people on this basis.

At other times, employers employ employees on a “part-time” basis. The basic rightsand obligations of employees and employers apply to casual or part-time employment.

Employee or self-employed contractor?

The term “employee” does not include self-employed people who work for othersunder contracts to do particular jobs or services. These people are often referred to as“contractors” or independent contractors. The law is different for self-employedcontractors. Sometimes, though it is not clear whether a person is an employee or aself-employed contractor.

Extra rights for fixed-term employees under the ERAAn employer can only offer a fixed-term employment where:

• there are genuine reasons for doing so (such as seasonal work, project work,

temping work, or filling in for a permanent employee on leave), and• the employer advises the employee of those reasons and how or when the

employment will end, and does so at the outset.

A fixed-term agreement cannot be used simply to make it easier to get rid of someonewithout using normal disciplinary procedures or as a trial period.

Trials or probationary periods

Trials or probationary periods must be made clear to the employee in their writtenemployment agreement. During the trial period, the employee must be actively‘coached’ so that they can reasonably know the employer’s performance expectations

and receive adequate training to try to meet them. Also, if the trial is not successful,the employer is still required to go through proper performance management andexit/termination procedures.

Minimum employment conditions in legislation

There are a number of provisions that are established by legislation. These form thefoundation of all employment agreements, and an employer and employee cannotagree to waive them.

Annual leaveThe Holidays Act 1981 sets out the minimum entitlements for annual holidays andgives all employees rights to paid annual leave, whether they are full-time, part-time,fixed-term, temporary or casual employees, adults or young employees. Employeesare not lawfully able to give up these rights. All employees are given three weeks’ paid annual leave after one year’s continuous employment with the same employer.At least two uninterrupted weeks of these holidays must be allowed within six monthsof the holiday entitlements falling due. The rest must be allowed within the next sixmonths.



Holiday pay at the end of employment

All holiday pay due to an employee (ie, total entitlement less any holiday pay alreadyreceived) should be paid to the employee at the time the employee leaves the job.Employees who work for less than three weeks are entitled to holiday pay of 6% of their total ordinary pay.

Public holidays

All employees (including casual employees, part-timers and employees on fixed-termagreements) are entitled to 11 public holidays on pay if they fall on days the employeewould normally work. The employment agreement can provide for alternative days, but not for less than 11 public holidays.

Where an employee works on a public holiday, other than Waitangi Day or AnzacDay, they must receive a paid day’s holiday in lieu, regardless of any penal payments paid for the day worked. If penal payments are paid on Waitangi Day or Anzac Daythere is no requirement to grant a day in lieu.

Special leave

By law, after working for the same employer for six months, an employee has theright to five days paid special leave for each subsequent 12-month period. Specialleave can be used by an employee for any of the following:

• sick leave

• domestic leave to care for a sick spouse, dependent child, or dependent parent of the employee, or of the employee’s spouse

• bereavement leave on the death of a spouse, parent, child, brother, sister,grandparent, parent-in-law, and also when the employer accepts that the death of any person means that the employee has suffered a bereavement.

Parental leave

Parental leave is time off work available by law to new parents if they are employeesand meet the eligibility criteria. Employees who have been employed by the sameemployer for 12 months and have worked at least an average 10 hours per week areentitled to 12 months which may be shared between them if they are both eligible.There is also a tax funded payment available to parents eligible for parental leave. If the employee works an irregular employment pattern the normal pattern of hours over the period is used to establish the average hours.

‘Precarious’ Non-Standard Employment

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