This report was published by the former Department of Families, Community Services (FaCS).
- Executive summary
- 1. Introduction
- 2. Structural change and its consequences
- 3. A new productive system and its workforce
- 4. 'Non-standard' contracts of employment
- 5. Employment on one's own account
- 6. Nevertheless, and concluding remarks
A sharp rise in Australian unemployment during 1974 was attributed to an exceptionally severe recession. In hindsight, it appears to mark a structural shift in the labour market, although not quite the beginning of that shift. By 2001, much had changed in the national economy, the composition of the labour force, and forms and conditions of employment.
Notable trends included:
- relative decline in employment in production industries and corresponding growth in service industries;
- growth of female employment, including women with children and women in older age-groups, and relative decline of male employment, especially but not only in older age-groups;
- growth of part-time employment, especially of females but also of males, although from a low base;
- unprecedented growth in proportions of adolescents and young adults of both sexes, but especially females, in full-time education; and
- substantial and economically significant participation of full-time students in part-time employment.
Those trends were widely recognised, although causes were often obscure, and their regularity implied that they must eventually be self-limiting. Remarkably, total labour supply, calculated as hours worked per head of adult population, remained nearly constant. Some reputed trends were neither confirmed nor clearly disproved by the statistical evidence. For instance, it could not be shown that employment in general had become less secure, nor that employment for wage or salary declined in relation to other forms.
In the past 30 years, the Australian Bureau of Statistics (ABS) modified some categories and sometimes produced significant corrections. Overall, however, the statistics did not keep up with changes in the labour market, and some became misleading or at least open to misunderstanding. Examples include casual employment and self-employment:
- the term 'casual employment' has had a variety of meanings, and the relevant statistical category corresponded exactly to none of them;
- 'self-employment' has included several different arrangements, but the statistics neither covered the whole category nor distinguished between types; and
- the extent of changes in organisational practice reputed or demonstrated by research, such as growth in fixed-term contracts of employment and in business services supplied under contract, could not be determined.
By 2001, the monthly ABS Labour Force Survey was undergoing the most comprehensive revision since 1978. New tax provisions designed to confine certain concessions to 'genuine independent contractors', and changes to industrial awards intended to discourage unnecessary and inappropriate use of 'casual' contracts of employment might also contribute to clarity, if indirectly.
The effects of technical innovations, especially in information technology, had been much discussed, but their nature and extent was unclear. They were most apparent in how work was performed, and therefore to some degree in who performed it. Examples included retailing, financial services and office work generally.
The labour market might prove to have reached or be approaching an equilibrium, very different from that of 30 years ago. One implication for public policy could be that people whose employment and earnings were secondary to other activities and sources would continue to make up a high proportion of the workforce.
The last three decades of the twentieth century are likely to be seen as a time of exceptional change—not unique but neither predicted nor predictable—in the Australian economy, forms of employment and workforce composition. This study reviews and summarises the available statistical series on the labour market during the last 30 years, or as much of it as was covered by usable statistics. Graphical presentation is used where possible. Tables corresponding to the figures appear in the statistical appendix. Some important topics were either absent or ill-defined in the statistics but were identifiable from other sources.
Similar things happened in other countries, although the details and timing of events in Australia were affected by its particular system of industrial relations which itself was undergoing change. Another factor was Australia's equally unusual but resilient social security system.
In attempting to trace changes in the Australian labour force and types of employment, the principal source is published data from the ABS Labour Force Survey. This survey of occupants of a sample of occupied dwellings has been conducted in State capitals from November 1960 and nationally from February 1964, first quarterly and then monthly from February 1978. In 2001, the sample comprises approximately 0.5 per cent of the population. Over the years, the main changes were expansion of the questionnaire and finer distinctions within broad categories. The sample was rotated by replacing a fraction—one-eighth in 2001—in each successive month.
Some data were collected yearly, less often or irregularly by addition of appropriate items to the monthly questionnaire, and were reported separately.
Most of the information presented here is calculated as employment ratios—persons actually employed as a proportion of the whole demographic category they belong to—rather than as the employed as a proportion of job-holders plus unemployed jobseekers. Individuals are classified simply as working or not. By international convention, 'employed' means gainfully employed for one hour or more per week, and 'full-time employment' means employed for 35 hours or more.
The statistics provide a clear picture of the composition of the employed labour force over time by age, sex, family status and hours of work, and of tendencies for working life to be abbreviated at one end by extended formal education and at the other by non-employment, particularly of older men, sometimes referred to imprecisely as 'early retirement'. Despite adoption during the period of an improved system of occupational and industrial classification, these reveal comparatively little about the content of peoples' jobs.
The names or definitions of some statistical categories render them liable to misunderstanding. Casual employment and self (or 'own-account') employment are such categories. Each covers a range of patterns of employment and contractual arrangements, some of which have been reflected in disputes coming before courts and other tribunals. This study attempts to distinguish the various meanings attached to the terms.
Multiplicity of meanings contributed to a perception that one trend was towards greater insecurity of employment in general. However, that perception was not confirmed by statistics on rates of job change and job loss.
Trends in several forms of employment associated with changes in organisational practices and indicated by occasional collections or special studies can be distinguished only dimly in the regular population statistics, if at all. Examples include provision of business services or temporary staff by one entity under contract to another.
Causes of the long process of change were undoubtedly complex. The regularity and international character of changes imply that these were systemic, and moderated rather than initiated by political and cultural factors. In Australia, a severe recession at the beginning of the 1990s produced at most a temporary deviation from long-term trends. However, by the end of the decade, after several years of sustained recovery and growth, it seemed possible—but only possible—that a new state of equilibrium was being reached. If so, that order would present problems as well as opportunities for public policy.
Between the mid 1970s and 2000, Australia's paid labour supply, calculated as average hours worked per head of total population 15 years of age and above, fluctuated around 20 to 21 hours a week. If the size of the potential workforce were adjusted for deferral of labour supply by extended education and the infirmities of an aging population, it would presumably be found to have increased appreciably over that period. Of males 15 and over at the 1976 census, 7.5 per cent were aged 65 and over, and at the 1996 census the figure was 13.7 per cent. However, profound change had occurred in the relative contributions of different segments of the potential workforce—males and females most impressively—the organisation of work, conditions of employment, the goods and services produced, methods of production, and in Australia's international trading and financial relationships.
In mid-1974 unemployment, often becoming long-term, had risen sharply and stayed much higher than in the preceding 25 years and, until a sustained recovery from severe recession occurred in the early 90s, rates of economic growth had been much lower. A series of institutional reforms in the 1980s and 1990s, intended to promote efficiency and growth, had little immediate effect on unemployment, although rates fell gradually in the later 90s.
The speed and extent of change provoked a degree of insecurity. Public discussion concentrated largely on domestic social and political factors, which clearly were important, but broadly or closely similar things were happening in other industrialised or industrializing countries. Those countries were most obviously but not only liberal parliamentary democracies with capitalist economies. Countries with other political systems were also affected; perhaps to the extent that they entrusted investment, production and growth to national and international markets. The critical factor appeared to be the nature of the economic system, or its effective core, and apparently something basic to those systems had changed.
The time series on employment and varieties of employment presented here not only bear the marks of short-term fluctuations of the ordinary business cycle but also reflect underlying trends that cannot be extrapolated to predict any plausible future. They are best understood as representing a long transition from one more-or-less steady state of economy and labour market to another. Analogous transitions had happened before. The preceding two or two-and-a-half centuries had seen not one but several industrial revolutions, and a consensus emerged gradually among those who accepted the discontinuity of change that this probably was another. There was less agreement on what was driving it and where it might lead.
Theories of the propagation of major innovations and their eventual expression in whole systems of production went at least as far back as Marshall, who wrote of the diffusion and application of new ideas: 'An epoch-making idea…starts the thoughts of the world on a new track [but] is seldom fully effective for practical purposes till many minor improvements and subsidiary discoveries have gathered themselves around it…' (Marshall 1890 (1920), p. 205). In 1999 the chairman of the Federal Reserve Board, discussing 'the unexpected emergence [of] labor productivity acceleration' in the United States, suggested that this was 'not just a cyclical phenomenon or a statistical aberration but reflects—at least in part—a more deep-seated, still developing, shift in our economic landscape.' Structural shifts of that kind 'have visited our economy from time to time in the past', and now:
The newest innovations, which we label information technologies, have begun to alter the manner in which we do business and create value… They were unanticipated and evolved, for the most part, independent of the ebbs and flows of economic activity [but] there has been a perceptible quickening in the pace at which [they] are applied. [An] evident acceleration of the process of 'creative destruction' which has accompanied these expanding opportunities has been reflected in the shifting of capital from failing technologies into those technologies at the cutting edge (Greenspan 1999).
Seventeen months later, Greenspan again asserted that 'Technological innovation, and in particular the spread of information technology, has revolutionised the conduct of business over the past decade' (Greenspan 2000).
The reference to 'creative destruction' was an unacknowledged quotation from Joseph Schumpeter, who attributed those major events to the operation of the so-called Kondratiev cycle of economic development, a theoretical construct which describes the past reasonably well but was never accepted as establishing the existence of long, regular and—crucially—self- generating cycles of growth, decline and recovery. Schumpeter referred to the changes resulting from innovation as 'economic evolution', explaining that, although the term was unsatisfactory, 'it comes nearer to expressing our meaning than any other, and it has the advantage of avoiding the associations suggested by the…term 'progress', particularly the complacency the latter seems to imply'. He went on to explain that 'evolution is a disturbance of existing structures and more like a series of explosions than a gentle, though incessant, transformation' (Schumpeter 1939, pp 86,102). Or, in a memorable restatement, that:
in dealing with capitalism we are dealing with an evolutionary process… Capitalism…is by nature a form or method of economic change and not only never is but never can be stationary… The fundamental impulse that…keeps the capitalist engine in motion comes from the new consumer goods, the new methods of production or transportation, the new markets, the new forms of industrial organisation that capitalist enterprise creates. [This] process of industrial mutation…incessantly revolutionises the economic structure from within…destroying the old one [and] creating a new one. This process of Creative Destruction is…what capitalism consists in and what every capitalist concern has got to live in (Schumpeter 1942 (1947), pp 82-83).
Predictions that new information technology—to which some added biotechnology and materials technology—would transform productive systems and their institutional frameworks, had been made since the early 1980s, and in Australia by 1996 the Economic Planning Advisory Commission (EPAC) had no doubt that:
The advance of information technology will change almost every job. The scale of change is at least as great as with other technological advances such as the steam engine or car. It has increased the pace of innovation and structural change and will further increase globalisation and competition. It will both create and destroy many jobs, and change the balance of skill requirements. [Because of] new technology and changed social attitudes… the old style of work organisation…large-scale mass-production, with rigid job delimitation and hierarchical management…is being replaced by organisational styles that emphasise innovation, small teams, autonomy [and so on] (EPAC 1996b, p. viii).
It seemed highly probable that deep change was occurring, likely that it proceeded from technological innovation, and possible that the most important of the innovations related to information technology. Only time could tell, and in any case both Schumpeter and Greenspan expected the ups and downs of the ordinary business cycle to persist, despite any underlying shift.
The detail of what was happening in the Australian labour market, and especially the new things that were happening, or changes in the significance of things once unimportant but now of interest, could not be distinguished clearly. The main statistical categories had been defined at or before the beginning of the period covered in this paper. Some had become misleading or irrelevant and, once beyond them, the available information was little better than anecdotal, showing that certain things were indeed occurring but insufficient to quantify them. For example, a substantial proportion of 'casual' workers were in fact persons running their own businesses and the variety of arrangements within the category, 'independent contractor', created difficulties for courts, tribunals and the Australian Taxation Office (ATO), as well as for analysts.
Public discussion was also confused because people misunderstood the statistics that did exist. The term 'dramatic' tended to be overused and misapplied to changes that in reality were gradual but prolonged, sometimes because rates of growth were confused with growth in absolute numbers. A fact such as, 24 per cent of all jobs in both 1983 and 1998 were full-time jobs occupied by women can be interpreted as meaning that the rate of female full-time employment had not changed. In fact, 26 per cent of all women over 15 years of age were working full time in 1983, and 29 per cent in 1998. It is hoped that the present work will aid understanding of the meaning of the statistics we have and help to define the statistics missing but needed.
- 3.1 Old jobs and new
- 3.2 The demography of labour supply
- 3.3 Education, youth employment and unemployment
- 3.4 Parallels and explanations
- 3.5 'Early retirement' unexplained
- 3.6 Skills and occupations
From the late 1960s to 2000, the more apparent trends were the cumulative increase in female labour supply; more part-time employment and employment in service industries; the decrease in male labour supply; relatively slow growth in full-time employment, and the reduction in the importance of industries preparing, treating or converting materials and producing goods. These changes are so closely interrelated that priority can hardly be assigned to any, although the changing industrial structure must have been influenced by technological developments. Similar trends occurred in other industrialised countries.
Figure 1 shows the distribution over time of the Australian working population between 'production industries', comprising construction, agriculture, forestry and fishing, manufacturing, mining, and electricity, gas and water; and 'service industries', comprising property and business services, accommodation, cafés and restaurants, cultural and recreational services, personal and other services, health and community services, retail trade, education, wholesale trade, government administration and defence, finance and insurance, transport and storage, and communication services.
The rate of change in the distribution of employment between those two broad categories was remarkably steady through a period of more than thirty years, varied only by episodic accelerations and decelerations apparently corresponding to upturns and downturns of the business cycle. According to a fairly standard interpretation of this particular change in the labour force 'over the past few decades', offered by the ABS:
…new technology, microeconomic reforms (such as tariff reductions, industrial relations reforms and changes to standards and regulations) and internationalisation of product markets have all contributed to this change. [A] major influence on industrial restructuring has been government economic policy. [I]nitiatves in the 1980s aimed at creating a more efficient and less sheltered manufacturing sector…included gradual cutting of tariffs, floating the Australian dollar, liberalisation of foreign investment and allowing foreign banks into Australia… Factors contributing to…growth of employment in the service sector…include the increase in part-time and casual work and the increase in services that replace work previously done in the home [and also] the recognition that many sectors of the service industry have the potential to earn export income (ABS 1997, 'Changing industries…').
That account emphasises the significance of policy change, and perhaps of changes in tastes. However, if policy decisions were of primary importance one would expect a less regular pace of change, with rates responding perceptibly to rounds of tariff cuts or financial deregulation. The regular trend towards growth of certain industries and the decline of others could correspond to the diffusion of a new technological style, or style of life, or both. Thus the policy changes mentioned in the ABS publication could then be examples of institutional adaptation to an emerging style rather than causes of it. The possible indications in Figure 1 of a slight levelling out in the 1990s could represent the impending completion of a structural shift.
Figure 1: Proportion of all employed persons in production and service industries, 1966-1997
Redrawn from ABS 4102.0; 1997 figures 6230.0
Firstly however, as discussed later, workers providing business services may or may not be classified to the employers' industry, depending on whether the services are produced in-house or bought in.
Secondly, an industrial classification relates more directly to what is produced than to how it is produced, and emergence of a new productive style must involve more than changes in relative demand for existing goods and services, and hence for those who produce them. By themselves, productivity gains will tend to reduce demand for labour, as they have in agriculture and some sectors of the transport industry.
The specific effects of information technology on employment are not clearly apparent. For example, they will have influenced changes in finance and large-scale retailing, but much less in the construction industry (which increased its share of jobs between 1985-86 and 1995-96), or in 'accommodation, cafés and restaurants' (where employment grew at three times the overall rate in the same period). Some of the recognised industrial categories are heterogeneous: for example, 'business services', a subdivision of 'property and business services', contains both 'computer services' and 'security and investigative services (except police)', both of which grew from minor to substantial sources of employment but for quite different reasons. Any effects on demand for clerical labour could involve many categories.
The rise of employment in service industries was associated with another of the long-term trends suggestive of a historic transitionæthat is, growth of female employment. In 1997, women occupied 43 per cent of all jobs. Figure 2 shows industry subdivisions with more than that proportion, accounting between them for 76 per cent of all women workers. Except for the declining 'textile, clothing, footwear and leather manufacturing', they are all service industries. Perhaps women had some advantage in the expanding industries, or perhaps the availability of women workers enabled them to expand, or perhaps both are true. However, the subdivisions with the highest proportions of women, although certainly not untouched by technical innovation, and some of them much concerned with information, are characterised more by labour-intensity.
Figure 2: Industry subdivisions with more than 43 per cent female workers, 1997
Source: ABS 6230.0
Note: These subdivisions included 76 per cent of all employed females and 41 per cent of employed males
Between the early 1970s and 2000, employment grew approximately in proportion to the Australian population. Figure 3 shows the numbers of males and females in full-time and part- time jobs. Cyclical change was most apparent in male full-time employment, less in female full-time and least in part-time employment. All categories grew steadily throughout, although male part-time numbers came from a very low base. In Figure 4 the same categories are presented as proportions of all jobs in the particular year. As with the growth of employment in service industries, the striking feature of the trends over twenty-nine years is their regularity. Male full-time employment steadily lost its dominance, while part-time male and, especially, female grew; and female full-time employment continued to constitute around 24 per cent of all jobs. This meant many more jobs at the end than at the beginning of the period, and a much-increased proportion of all full-time employment, from 27 per cent in 1972 to 34 per cent in 2000. The statistical series again provides an image of a system in transition, but also possible indications that rates of change eased in the long period of growth following the recession of the early 90s.
Figure 3: Number of employed persons by full or part-time and sex, 1972-2000
Source: ABS 6101.0, 6203.0
All figures are for August
Figure 4: Distribution of employment by sex and hours, Australia, 1972-2000
Source: ABS 6101.0, 6203.0
All figures are for August
In Figure 5 the labour supply of males and females from 1975 to 2000 is represented as aggregate weekly hours of paid employment divided by the population 15 years of age and over. That base seems as good as any. 'Working age' has conventionally been regarded as 15 to 64 years for males and 15 to 59 (until 1995) for females, the upper limit being age of eligibility for statutory pension, but the reality was always less distinct and has varied over time. On the present calculation, adjusted aggregate hours fluctuated around 20 or 21 hours per week for the whole period, with movements above and below that figure corresponding to phases in the business cycle. However, the index of market sector productivity superimposed on the figure indicates that the real product of that labour supply rose by more than 30 per cent.
On average, employed males continued to work longer hours than females. One reason was their concentration in full-time employment. Although the ABS classified anything under 35 hours a week as part-time, the average was much shorter—about 17 hours in August 1999, when part-timers constituted 26 per cent of all workers but contributed only 12 per cent of all hours worked. Secondly, on average, women's full-time hours of work were consistently shorter than men's hoursæfor example, 36.7 and 40.9 hours respectively in June 1989, and 39.5 and 44.2 in August 1999.
The net result shown in Figure 5 was that although male labour supply was sensitive to both downturns and upturns of the business cycle it trended down, from about 15 hours per head of total adult population to about 13 hours, a decline almost balanced by a steadier rise in the female contribution from about six to above seven hours. Again, though, the male contribution stabilised in the 1990s.
Figure 5: Hours worked per head of population 15 & over, by sex, 1975-2000, and real gross product per hour worked, 1978-1996
Source: ABS 6101.0, 6203.0
All figures are for August
Figure 6 and Figure 7 show employment ratios by age group for females and males respectively for 1972, 1979, 1985, 1991 and 1997, and female ratios also for 1961. Employment ratio (the proportion of a group in the population actually employed) is used here and elsewhere as a more robust statistic than employment rate (the employed as a proportion of those in the labour force) which varies according to economic and social conditions.
The female ratios are more readily understood than the male. They expanded for most age groups, particularly in the range corresponding to the bearing and raising of children. The 1961 figures indicate that marriage and childbearing was commonly associated with permanent withdrawal from paid employment. In 1966, only 30 per cent of married women under 55 years of age, with or without children, were in paid work. By 1997, however, the inflection now representing only a temporary withdrawal from employment had almost disappeared. Further detail is shown in Figure 8. Between 1981 and 1997, when the employment ratio of married mothers whose youngest or only child was 10 but under 15 years of age rose from 55 to 69 per cent, the ratio for mothers of children under five years of age rose even more strongly from 30 to 46 per cent.
Meanwhile, Australian women were becoming more available for employment because they were spending less of their lives with responsibility for children; young women because first births were occurring later and older women because completed families were smaller. Natalie Jackson, writing in 1998 about the cohorts of women born in 1933-37, 1953-57 and 1970-1980, noted that 'In the 1960s only 8 per cent of women remained childless [but] current fertility patterns indicate that about one-quarter of women currently of reproductive age will remain childless,' and that 'successive cohorts of women are reentering the workforce with children of ever-younger ages', and summarised:
For the cohort born 1933-37… entry into the labour force was largely completed by age 16. Marriage and childbearing followed in quick succession, with the average age at first birth being between 23 and 24 years, and childbearing largely completed by age 31… For the [1953-57 cohort] there was a small upward shift in average age at labour force entry and first birth and, largely due to smaller average family sizes, a slight decrease in average age at last birth…
By contrast, for those born in the 'baby bust' years of the 1970s… there is every reason to suspect that significant demographic compression is occurring. [L]abour force participation at the younger ages has fallen… The median age at first birth… has similarly shifted upwards to 29.2 years. Given that this was the average age at the last birth for the cohort born 1953-57, the last birth age… will have to be around 35 years (allowing the same childbearing duration) (Jackson 1998).
Figure 6 suggests that the transformation of female employment proceeded rapidly in the 1960s, and also that a considerable expansion occurred between 1985 and 1991 for women aged roughly 35 to 54. Changes in employment ratios for unmarried women, with or without children, are shown in Figure 9. After gradual decline, ratios for 55-59-year-old women trended up from the late 1980s. Comparison of employment ratios for 1991 and 2000, as in Figure 10, indicates little or no change for males and slight growth for women in the years most closely associated with childbearing, but continuing gains by older women. The relatively small changes for males and younger females are again consistent with stabilisation.
Figure 6: Female employment ratios by age, Australia, 1961-1997
Source: Labour Report 1964, ABS 6101.0, 6203.0, Rept of Comm. on Econ.
Figure 7: Male employment ratios by age, Australia, 1972-1997
Source: ABS 6101.0, 6203.0
All figures are for August
Figure 8: Married women: Employment ratios by hours and age of youngest child, 1981-1997
Source: ABS 6224.0
Figure 9: Employment ratios of unmarried women, with or without dependants, by age, 1980-2000
Source: ABS 6203.0
All figures are for August
Figure 10: Employment ratios by age and sex, 1991-2000
Source: ABS 6203.0
All figures are for August
The changes in male employment ratios from 1972 to 1997, shown in Figure 7, indicate that the steepest decline, much of which occurred in the first half of the period, was among older men, and especially men 60 and over. Year-by-year detail is shown in Figure 11. As in other series, the ups and downs of the business cycle are superimposed on long-term trends, which are downward here. The oldest of the three age groups was affected by a policy change made long before, in 1935, when the Australian Soldiers' Repatriation Act was amended to provide 'service pension', equivalent to civilian age pension but payable at age 60 instead of 65, to war veterans. In the 1970s, increasing numbers of veterans of the war of 1939-45 were turning 60 and claiming pension, until in 1983 a peak was reached, followed by rapid decline in new grants. Perhaps expectations had changed, because although the employment of men aged 60 to 64 recovered quite strongly in the 1990s—in an unusual reversal of a trend—it was coming back from a very low base. The employment ratio for men aged 45 to 54 appears to have stabilised, and the rate of decline for men aged 55 to 59 to have eased.1
However, male employment fell at all ages and for groups whose rates had once been extremely high. For example, between 1977 and 1997, while the employment ratio for married mothers of dependent children rose from 40 to 59 per cent, the ratio for married fathers fell from 95 to 88 per cent. In Figure 12 and Figure 13 data from the quinquennial census are used to reconstruct, somewhat approximately, the experience of men born in successive five- year periods from 1897 to 1976. For ease of reading each of the figures shows alternate age cohorts. The strong shift at older ages is again apparent, clearly beginning with the 1912-16 cohort when it reached its early sixties and affecting the 1917-21 cohort in its late or even its early fifties, but this presentation reveals a new feature: not only does each successive cohort's employment follow a lower trajectory but the peak tends to have been reached at younger and younger ages. The 1937-41 cohort seems to have been at its best in 1971, when aged 25 to 29. The slight inflections apparent between the last and third-last data points for the 1952-56 and 1957-61 cohorts are probably because of high cyclical unemployment at the time of the 1991 census. Figure 10 suggests a stabilisation in the 1990s.
Tendencies for increasing female labour supply to compensate for declining male labour supply did not necessarily extend to the family and household. Figure 14 shows proportions of couple families with dependent children from 1979 to 2000 in which husband, wife, both or neither was employed. The main trends were increase in the proportions of two-earner families (which became the majority) and families with no earnings. The wives of non-employed husbands were not more but less likely than other women to be working. The proportion of families with no earnings increased at each major downturn and recovered only slightly but appears, like the ratios for other family types, to have stabilised in the later1990s.
Figure 11: Male employment ratios by age group, 1972-2000
Source: ABS 6101.0, 6203.0
All figures are for August
Figure 12: Male employment ratios by birth cohort, 1961-1996
Source: Published data from quinquennial censuses 1961-1991, 1996 data supplied by ABS Alternate 5-year cohorts omitted
Figure 13: Male employment ratios by birth cohort, 1961-1996 (alternate cohorts)
Source: Published data from quinquennial censuses 1961-1991, 1996 data supplied by ABS Alternate 5-year cohorts omitted
Figure 14: Couple families with dependent children: Employment of husband and wife, 1979-2000
Source: ABS 6224.0
Single parents constituted another example of a family type where lack of adequate earned income was associated with lower rather than higher labour supply. As shown in Figure 15, between 1977 and 2000 employment ratios for single parents were lower than for married parents, and the differences increased over time. Figure 16 distinguishes rates of full-time and part-time employment for single and married mothers from 1983 to 2000. Rates of increase of part-time employment were similar, except that the married rate may have fallen slightly in the late 1990s. In the earlier part of the period, single mothers were more likely to work full time than married mothers but their full-time employment actually declined from about 1991— another unusual reversal of a trend—and became less common than part-time, while an increasing proportion of married mothers worked full time until, again, the rate stabilised.
The employment ratios of both males and females aged under 25 years, and especially under 20, declined because of reduced opportunities for full-time employment and rising rates of participation in secondary and tertiary education but, because of growing opportunities for part-time employment and increasing overlap of the population of full-time students and the adolescent and young adult labour force, less than they might otherwise have done. Public discussion of youth unemployment was notably confused by failure to take account of the nature and extent of the changes.
Figure 15: Parents of dependent children: Employment ratios by sex and marital status, 1977-2000
Source: ABS 6224.0
Note gaps in series
Figure 16: Employment rates of married and single mothers, 1983-2000
Source: ABS 6224.0, 6203.0
Figures July to 1985, then June
At the 1971 census, 1.5 per cent of the male workforce was unemployed. Participation rates for males aged 15 to 19 and 20 to 24 were 56 and 89 per cent respectively and the unemployment rates 3.8 and 2.1 per cent. In August 1998, the male unemployment rate was 8.3 per cent, the participation rates of males aged 15 to 19 and 20 to 24 were slightly lower than 27 years before, at 54 and 86 per cent respectively, and the unemployment rates were many times higher, at 20.6 and 12.8 per cent, but so much else had changed that these and the 1971 figures were simply not comparable.
In the 1980s and 1990s, adolescent and young adult rates of participation in secondary and tertiary education rose to unprecedented levels, and females made greater gains than males, with probable enhancement of their future earning capacity. Figure 17 shows rates of employment and full-time study of males and females aged 15 to 19 from 1987 to 2000. The effects of sharp downturn in the business cycle in 1990 with a low point in 1992 followed by recovery are apparent in each of the series, with indications of a reciprocal relationship between employment and retention rates. Male and female levels of employment were similar and moved together, but females achieved somewhat higher rates of participation in education. Figure 18 shows that similar growth occurred and similar differences emerged among 20 to 24 year-olds, the rising trend being stronger for females than for males, with male rates of participation in full-time tertiary study moving from 11 per cent in 1987 to 20 per cent in 2000 and female rates more than doubling, from 9 per cent in 1987 to 23 per cent in 2000.
The educational system is only one of several means of replenishing and expanding the stock of human capital, although it has tended to displace or absorb some of the others, and in particular various forms of in-service training. Traditionally, apprenticeships in skilled trades (mostly available to males) were an alternative to continuing in formal education. Freeland, whose concern was with teenage unemployment, referred to the apprenticeship system as 'a protected labour market reserve for young males making the transition from school to employment', and called for 'an equivalent training culture across all industries' (Freeland 1997, pp 29-31).
Apprentices will normally be classified as employed, and in 1997 were 90 per cent male. Figure 19 is intended to give some idea of how the broader trend for adolescent males looks when apprentices are added to students. (As noted on the diagram, figures for apprenticeships are approximations, required by lack of detail in statistics for the earlier years, but they serve as an indicator of volume of entry.) The conclusions supported are that a fairly constant proportion of teenage males went into apprenticeships, although numbers were affected by the business cycle, and that a great and growing majority was in either formal education or apprenticeships, but that females had made real educational gains.
The last years shown in Figure 19 understate participation in formal training because increasing numbers of young people were entering traineeships. In 1996, apprenticeships and traineeships were integrated as 'new apprenticeships' intended, among other things, to provide better training opportunities for female adolescents and young adults.
In August 1997, 18 per cent of all part-time workers and 28 per cent of male part-time workers were full-time students under 25 years of age. In 2000, 53 per cent of employed persons under 20 years of age were full-time students, and 30 per cent of male but 41 per cent of female students were employed. Among 20-24-year-olds, as in the younger group, female students were more likely to be employed than males, with rates of 54 and 45 per cent respectively. Figure 20 shows a continuing upward trend in young-adult student employment.
Figure 17: Persons aged 15-19: rates of employment and full-time education, 1987-2000
Source: ABS 6203.0
All figures are for August
Figure 18: Persons aged 20-24 in full-time tertiary education, 1987-2000
Source: ABS 6203.0
All figures are for August
Figure 19: Males 15-19 in full-time education, and all apprenticeships current, 1987-1997
Source: ABS 6203.0, 6227.0
Figures for apprenticeships include females and persons 20 and over
Figure 20: Full-time students aged 20-24: percentage also employed, by sex, 1987-2000
Source: ABS 6203.0
All figures are for August
In a review of trends from 1966 to 1995, Wooden describes the 'enormous change' that had occurred in the youth labour market and notes the rapid increase in part-time employment but 'a decline in the number of full-time jobs…and a rise in youth unemployment' (Wooden 1996). That is true, but by the 1990s the term 'unemployment' had not only changed its meaning but had come to refer to a variety of situations hardly comparable with each other.
In August 1998, unemployment, by the standard definition, was 18.8 per cent for persons aged 15-19 and 11.9 per cent for persons aged 20-24 but, of course, the percentages are calculated on the base of persons working or actively seeking work, and 46 per cent of the teenagers were doing neither, mainly because they were in full-time education. But nevertheless, 46 per cent of the unemployed were full-time students, of whom 84 per cent were looking for part-time work. It can't be said that they didn't need that employment, but they hardly depended on it for a livelihood, and a definition closer to what we think we mean when we talk about adult unemployment might be 'not a full-time student, not working and seeking full-time work'. That would give a figure not of 19 per cent but 5.2 per cent of teenagers. In 2000, the corresponding figures were 16 per cent and 3.4 per cent.
Rates calculated on that limited basis are shown in Figure 21. In the 14-year period, male teenage unemployment rose and fell between 4 and 9 per cent, and for females, between 3 and 7 per cent. The calculated trend lines indicate falling rates from 1992, which is interesting because this dwindling minority of young people who had discontinued education could have suffered disadvantages in a presumably more demanding labour market. In the 20 to 24 year age-group male rates were much higher, moving between 6 and 15 per cent, although from 1993 the trend was down. Female rates moved only between 4 and 8 per cent, but Figure 21 shows another complicating factor—the high but variable proportion of non-student young women classified as not in the labour force. The calculated polynomial trend indicated falling rates to 1994 and then rising. No satisfactory explanation is apparent.
However, unemployment rates for young people in the full-time labour market were very high. In August 1999, of the 21 per cent of teenagers and 59 per cent of young adults either in full-time work or unemployed and seeking it, 20.9 and 11.6 per cent respectively were unemployed. Wooden (1996) concluded from his review of trends that 'the future labour market experience of today's youth cohort' would probably differ from that of its predecessors, but in ways and to a degree so far unpredictable. They might benefit from their extended education, 'or will the higher levels of exposure to casual and intermittent employment inhibit skills development and long-term career prospects?' Then again, 'there are good reasons to be concerned about those young people who exit the education system at a relatively young age and find themselves unable to secure full-time employment.' He did not go on to consider possible differences between males and females, but it seems that in some important ways females may have the better prospects, and that most of those who suffered from any polarisation would be male.
Figure 21: Non-student, not employed full-time jobseekers by sex and age, and females aged 20-24 not student and not in labour force, 1987-2000
Source: ABS 6203.0
All figures are for August
In general terms, and sometimes in detail, Australia underwent the same changes as countries with comparable economic systems, including its principal trading partners. Similar trends in the industrialised and industrialising countries are evidence of the depth of the process, and differences in timing, form and degree demonstrate the influence of local contexts, both social and institutional. The Jobs report published by the Organisation for Economic Cooperation and Development (OECD) in 1994 noted that:
A number of labour market trends were remarkably common among all or most OECD countries… A common feature of all OECD countries has been a slowdown in growth in both output and productivity over the 1980s and 1970s as compared to the 1960s… In the early 1990s more people were unemployed in the OECD area than at any time before… From 1973 to 1982 [the] number [had] tripled. Strong economic expansion over the latter half of the 1980s did bring some reprieve but failed to drive down the jobless total to the levels of the 1970s, much less to those of the 1950s and 1960s… (OECD 1994a).
Unemployment in several member countries was to rise higher still in the later 1990s. The 1994 study also reported that:
…growth of employment in the service sector over the 1980s, relative to the agricultural and industrial sectors, was…a feature of earlier decades… However…prior to 1970, the decline in the relative importance of agriculture was compensated by increasing employment shares in both the manufacturing and service sectors. Thereafter, the relative importance of the industrial sector as a source of jobs has also declined… Not all of this shift is entirely due to changes in consumption patterns, trade and technology; it also partly reflects a growth in the contracting out of service activities… In virtually all countries, employment expanded the fastest in financial and business services and in community and personal services… Another feature of the 1980s was the growth of part-time work in many OECD countries. In fact, in several countries, notably Belgium, Ireland, France and New Zealand, the number of full-time jobs declined over the 1980s and it was only through a rise in part-time jobs that overall employment gains were achieved. Part-time work also accounted for almost all of the overall rise in employment in Germany and the United Kingdom… The Netherlands experienced a particularly rapid rise…
One common trend across all OECD countries over the last 15 to 20 years has been the decline in participation rates for men and the rise for women (with the exception of Turkey). Outside the European Community, the increasing numbers of women entering the labour force have more than offset the decline in men's activity and, consequently, overall participation rates have been growing over time, with the biggest rise occurring in North America… Increases in non-employment rates for older men have been particularly substantial…
Non-employment rates for young people have increased substantially [except in] Germany, Japan, the Netherlands and the United Kingdom. However, this partly reflects higher retention rates of youths in education as well as increases in unemployment rates (OECD 1994a, pp 1, 2, 5, 8-9, 28-33).
Another study published by the OECD in the same year dealt specifically with trends in female employment. Expansion of the service sector had favoured the employment of women, service sector firms had been 'the keenest proponents of…external numerical flexibility [and] there is one form of flexibility that is considered particularly "female", namely part-time employment [which] has the undeniable advantages of creating new employment opportunities for many women.' In some countries a further incentive for employers to offer part-time work was that their contributory social insurance schemes excluded persons working short hours. 'Short' part-time work was known to have increased rapidly in several countries. 'The proportion of men working part time is still uniformly low [and] men working part time, especially on "short" hours, are typically students in Denmark, the Netherlands and the United Kingdom.' Denmark was unusual in that the great majority of women working 'short' hours were also students (OECD 1994b, 47-49, 78-9, 94).2
Declining male participation and labour supply aroused concern to the extent that it was reflected in unemployment and 'early retirement', but little curiosity, and was not studied closely. Two suggested explanations, not mutually exclusive, were that structural change reduced opportunities in traditionally male occupations and industries—or more generally resulted in mismatch between opportunities and male skills and preferences—and that a higher proportion of men were able to retire voluntarily. As expressed by the ABS, 'The production industries were, and still are, mainly the preserve of men working full time, and in the 10 years from 1985-86 to 1995-96 jobs in them increased by 0.7 per cent only, but service industry jobs by 31.1 per cent (ABS 1997).
The OECD's Jobs study reported, 'In all countries for which data have been collected, participation rates have fallen the most for adult men with few educational qualifications' (OECD, 1994a p. 31). A study of male participation rates from 1971 to 1993 conducted by the United States Bureau of Labor Statistics found a:
…continuous drop in labor force participation rates among men aged 25 to 54… For men aged 25 to 29 and 30 to 34; the period of the greatest drop in… participation was 1978-83—the years following the most rapid increase in the labor force. This may reflect the difficulties of the baby-boom generation getting jobs…
An important element in projecting future labor force growth is to have a better understanding of why men's labor force rates are declining. For young men, one reason …has been their increasing college enrolment. However, for men 25 to 49 that cannot be a significant factor . [Although] the number of men 25 to 49 grew by 2 per cent annually between 1983 and 1993 …the number of men…reporting themselves [in the Current Population Survey] unable to work grew by 9 per cent a year or four times as fast…
Accumulating evidence indicates that the decline in labor force activity…is greatest among men with fewer years of educational attainment and among men with low rates of pay (Fullerton 1995).3
In Australia too, many of the males whose predecessors would have been in the labour force, especially the older, classified themselves or were classified as 'unable to work' because of sickness or disability, although they were living longer and were presumably healthier.
The second line of explanation is represented by Rima, also writing of the United States, who concentrated on older men. In 1959, the labour-force participation rates of both black and white males had been:
…just under 84 per cent. However, since the early 1960s that has no longer been the case. The participation rates…declined by 1990 to 77 per cent for white males, and to 70 per cent for black males… The causal factors…are varied and complex, but the secular rise in real wages and earnings that has accompanied economic growth is the most obvious among them. [M]en as a group have chosen earlier retirement, partly in response to their having accumulated more wealth than was possible for earlier generations of males… The growth of private pensions, combined with a system of social security benefits that severely limits earnings from part-time employment…also has [increased] the attractiveness of labor-market withdrawal (Rima, 1996 p. 149).
A variant of the same theory was proposed in an Australian study of trends to 1982, which concluded that:
…the decline in participation rates over the 1970s is the result of the realisation of plans formed prior to 1973 [and] the deterioration of the labour market in the late 1970s …should be heavily discounted. [These] changing retirement plans are largely reflections of…the tendency of individuals with war service to retire at age 60 [and] change in individual preferences which derive from the greater lifetime income [and] wealth of today's 60-64-year-old cohort…(Miller 1983).
That explanation may have had some validity at the time but by the late 1990s seemed inadequate, the survivors of the large ex-service cohort having passed into old age and any plans formed before 1973 having been exposed to quarter of a century of new realities. Although home ownership and children's independence may help older people adjust to reduced income, the notion that accumulated 'wealth' enabled many to choose early retirement seems inconsistent with the fact that most were on unemployment and disability-related social security payments. The very term 'early retirement' is probably misleading when participation and employment rates had fallen for younger as well as older men, though not as far.
Borland used ABS material to examine changes in the labour-market participation of males of all ages from 15 to 64 between 1964 and 1994. Having noted that 'the issue of trend movements appears to have been relatively neglected compared to…cyclical movements in labour force participation', he found that 'The increase in the proportion of men out of the labour force was concentrated among older men, men with the lowest levels of educational attainment, with potential earnings in the middle of the distribution of earnings, and who were in married family groups.'
Like Miller, Borland compared surveys of retirement intentions with the subsequent experience of the populations surveyed, but found that 'retirement intentions do not match the decrease in…participation that occurred during the 1980s [and] it seems reasonable to conclude that contemporaneous changes in the labour market variables, as well as demand constraints, are likely to have affected…participation' (Borland 1995). However, in 1996 EPAC suggested that 'Rising personal incomes and wealth (often from having a wife as a second income-earner) have enabled older workers to retire earlier,' and that a further factor was the spreading coverage of occupational superannuation (EPAC 1996b, p. 45).
An American study estimated that changes to pension plans and social security entitlements in the 1970s and 1980s were responsible for no more than one-quarter of the trend to early retirement, and suggested that 'other factors which may have played a major role in increasing retirement include rising real wages, changes in disability insurance, changes in tastes for retirement and changes in the industrial distribution of jobs' (Anderson, Gustman & Steinmeier 1997).
Both the 'involuntary exclusion' and the 'escape to affordable leisure' explanations are compatible with the idea that secular decline in male employment was related to deep structural change and each may have some validity, but neither seems adequate. For example, many of the production workers shed by uncompetitive industries would have had few transferable skills and, although not wealthy, would not have been thrown into abject poverty by inability to find new jobs but could continue to live much as before, if at a lower level. Also, the customary and formal privileges males enjoyed in recruitment, retention, promotion and pay began to erode in the 1960s, and if men and women were competing in the labour market and within enterprises the competition was less unequal. The greater inclusiveness of the labour force and technological change could conceivably have raised the threshold of employability in terms of basic competences if not of specific skills.
Theories would need to take account of the duration of the process of change and the involvement of males of all ages. It might seem plausible that the combination of structural change and periodic downturns of the business cycle would remove workers who had become marginal and prevent their return to employment. However, the sharp rises in unemployment that occurred in 1974-75, 1981-83 and 1990-92 cannot be related clearly and consistently to the movements in employment ratios discussed above. On the contrary, we have seen possible evidence of recovery of cohort ratios following recession, and many of the new jobs were not conspicuously demanding either of skills or general competence. And there had been a whole generation for the actual and potential labour force to adapt to change.
A 1999 Treasury paper on trends in labour force participation, observing that 'the male participation rate has been declining over the last thirty years, while the female…rate has been rising,' offered the familiar explanations of employment growth in 'part-time service industries, which are dominated by females, and slower growth in industries traditionally employing full- time male workers, such as utilities, mining and manufacturing,' as well as increased female labour supply (Department of the Treasury 1999). The description is accurate enough except that, to some unknown extent, changes in industrial organisation and contracts of employment had reclassified jobs from 'production' to 'service', and the explanation implies a peculiar male inability to adapt, persisting for a whole generation. If type of work is the crucial factor, is it supposed that males have an ineradicable affinity with machines? Or if hours of work are crucial, that the labour market can't accommodate that preference as well as the preferences of women with domestic responsibilities?
A study of trends in the United States between 1959 and 1995 (Carnevale & Rose 1998) took 'a new approach because the traditional practice of tracking employment trends by industry…misses activities that cut across industries or are far removed from direct production or service activity.' Occupational data were classified into 'a new set of categories based on workplace functions', namely, extractive production, industrial production, low-skilled services, high-skilled services and 'administration and coordination (the office): all workers involved in management, administration, business and financial services'. A further classification distinguished 'élite jobs' performed by 'managers and professionals', 'good jobs' and 'less- skilled jobs'. The main findings were that:
Office work…has become the dominant feature of our economy, employing 41 per cent of all workers, paying the highest salaries, growing the fastest, employing over one-half of all college graduates and capturing 50 per cent of all earnings. [B]usiness professionals are the largest component, accounting for 44 per cent of office jobs. As the Office Economy has risen, the industrial economy has fallen…The…share of low-wage service jobs in the economy has remained constant at approximately one-fifth of the total workforce [and] high- skilled services (e.g., education, health care, police and firefighters [and clerks, technicians, tradesmen and supervisors]) have become more important…From 1959 to 1969 their employment share jumped from 11 to 16 per cent and then stabilised [although] their pay…has continued to increase, and now total earnings in these activities almost equal those of the entire industrial sector.
Decline in less-skilled jobs had been offset by increase in 'élite' jobs. Most office jobs were 'élite' or 'good', and for females over 70 per cent of élite or good jobs were in offices; where as many college-educated women were now employed as in health and education.
For females, the story is one of earnings gains for all. But for males, except for college- educated workers, earnings were down from 1979. [E]conomists and politicians…worry about [the] social consequences [and many have thought that] it must be technological change that particularly benefits those with more education. At a time when computer use has been skyrocketing, there is a certain appeal to this argument…
Yet, we find that the pay of professionals in technical/scientific fields has stagnated or declined, while the pay of nontechnical, nonscientific…professionals and managers has increased. These office careers…are growing fields that are populated with workers who have bachelor's degrees. They have some computer skills but they hardly are high- technology information workers (Carnevale & Rose 1998, p. 18).
No comparable study was conducted of the Australian labour market, but there were some parallels. Cully used data from the ABS Labour Force Survey, classified according to the 1996 revision of the Australian standard classification of occupations, 'explicitly hierarchical in ranking jobs by skill level', to examine changes in occupational composition between 1993 and 1999. The classification provided 'nine major groups,…which fall into five distinct skill levels.'
It appeared that the net employment growth of 17.2 per cent had been concentrated heavily in the highest and lowest skill levels, and in particular in jobs occupied by professionals, with degree or equivalent qualification, and by elementary clerical, sales and service workers— where employment grew by 31.5 and 35.5 per cent respectively. Employment of advanced clerical and service workers had declined slightly. To Cully this suggested 'an increasing polarisation of the Australian labour market between jobs that are high skilled (high paid) and jobs that are unskilled (low paid)' although, within the lowest skill level, growth in jobs for 'labourers and related workers' was below the overall figure (Cully 1999).
Government administration consists essentially of processing information, and during the 1980s and 1990s new technology changed both organisational structure and content of jobs in the Australian Public Service. The great bulk of staff had belonged either to the 'Third Division' or 'Fourth Division'. The minimum qualification for third division entry was a completed secondary education or equivalent, and most fourth division staff performed ancillary functions, which included filing and typing. They were represented by a separate union, the Australian Public Service Association (APSA).
Since 1967, the Department of Social Security had used electronic computers, depended on them increasingly and, having made extensive use of contract programmers, reached a certain maturity in computer applications in the early 1980s. Some fourth division staff felt their jobs were threatened and reacted defensively. In September 1983—the year that 'repetition strain injury' achieved epidemic status in Australia (Hall & Morrow 1988)—departmental representatives signed an agreement with APSA that clerical staff would not be permitted to operate keyboard equipment, which was intended and understood to mean principally word processing. In 1986, the union twice protested vigorously against use of word processing logons by third division staff. It was 'a crucial issue for our keyboard members whose jobs are threatened'. The agreement lapsed with merging of the third and fourth divisions in 1987 and disappearance of the jobs that had been defended. The Department of Social Security's annual report for 1991-92 said that 'Almost all staff make extensive use of the computing systems in their day-to-day work.' In the process almost all learnt to type, well or badly, and as of 1999 the great majority of staff in the former regional office network, now Centrelink, were involved in both processing and client contact. Few were required to have degree qualifications, although an increasing proportion had. Many vacancies were advertised with the information that certain qualifications or experience were preferred.
- 4.1 Variability of terms and conditions
- 4.2 The semantics of casual employment
- 4.3 Examination and regulation of casual employment
- 4.4 Temporary employment, job change and job loss
If permanent full-time work for a wage or salary is taken as the dominant, typical or standard form of employment, part-time employment was only one of the atypical or non-standard forms often said to constitute an increasing proportion of all jobs in the Australian workforce of the 1990s. In 1996, EPAC reported that 'casual, part-time, contract and self-employment have grown substantially. [Jobs are] becoming more flexible in the number and scheduling of hours worked [and] job tenure…more variable, with a mix of fixed-term contractors for short-term and long-term jobs' (EPAC 1996b, p. viii). Similarly, an article in the OECD annual Employment outlook enumerated 'shift work, weekend work, self-employment, part-time work and temporary work' (OECD 1993, pp. 18-31). In reviewing trends in industrialised countries Quinlan identified a decline in permanent full-time work, labour shedding and outsourcing by large enterprises, and growth in part-time, casual, agency and other temporary work, self-employment (including businesses conducted under franchises), homework and 'telework', and shift and night work (Quinlan 1998).6
Greater diversity of working arrangements might not only enable employers to manage their operations more efficiently and productively, but also widen the range of choice open to workers and potential workers. In Australia as in other countries, some welcomed the perceived changes accordingly. Others expressed fears of division of the labour force into skilled, secure and well-paid élites and an underpaid, unprotected and insecure lower class, and even of a general erosion of security of employment and entitlements associated with employment. Instead of 'flexibility' they spoke of 'casualisation' and 'polarisation' of labour, 'involuntary part-time employment', 'precarious', 'marginal' and 'contingent' employment; of 'free-market capitalism…producing fewer old-fashioned, tenured jobs, and ever more varieties of temporary work.'' 7 As of 1999, 'The growth of non-standard employment together with the growing insecurity of standard employment continues at a startling pace in Australia' (Burgess & Strachan 1999).
In fact, although change was undoubtedly occurring its extent and consequences were unknown. In Australia, of the various forms of non-standard employment supposed to have become more prominent in the emerging labour markets, the principal statistical collection, the Labour Force Survey, conducted quarterly from 1964 and monthly from 1978, distinguished only part-time employment with any clarity and accuracy. Few of the other forms were recent and some were very old, but none had been of enough interest to be enumerated regularly. In October 1995, the ABS announced that whereas:
A major redesign of the LFS was last undertaken prior to introduction of monthly surveys…In view of the considerable changes and restructuring of the labour market and [new information technology] a major review of the survey and its processing is now warranted, [including] a redesigned LFS questionnaire…
ABS believes that the questionnaire could better measure contemporary labour force characteristics. Some aspects of the labour market are now more prominent than when the current questionnaire was designed…
It is planned to finalise the questionnaire by late 1996… Subject to the successful completion of developmental work [it] will be introduced in late 1997 (ABS 6203.0 October 1995).
It was not. Some work proceeded, more slowly than had been hoped, but an information paper circulated in March 1998 reported that:
A…supplementary survey to be conducted in August 1998 will go part way to gaining an understanding of [the] changing face of the labour market [and a special supplementary] Survey of Employment Arrangements and Superannuation…will be conducted over the period March to May 2000 (ABS 1998).
Statistical collections in other countries had shown similar inadequacies in the face of similar developments. In the United States a special supplement was included in the monthly Current Population Survey for February 1995 to estimate the number of workers in 'contingent' jobs and 'alternative' working arrangements. A preliminary report was published in August 1995 and a group of articles in October 1996 (United State Department of Labor 1995-96). The survey was repeated in February 1997.
The term 'contingent work' was believed to have been coined in 1985 and in 1989 was defined by the Bureau of Labor Statistics as 'any job in which an individual does not have an explicit or implicit contract for long-term employment. In essence, a contingent worker was…anyone who was in a job currently structured to be of limited duration.' The survey data were classified according to the worker's experience and expectations under three definitions, narrower or broader. Under the narrowest definition 'contingent workers were defined as wage and salary workers who…expected to work in their current job for one year or less and who had worked for their current employer for one year or less.' The second included self-employed persons and independent contractors with similar expectations of their employment, and the third 'all wage and salary workers who do not expect their jobs to last.'
Employees in 'alternative' work arrangements were 'defined either as individuals whose employment is arranged through an employment intermediary such as a temporary help firm, or individuals whose place, time and quantity of work are potentially unpredictable.' Polivka (US Department of Labor 1996) remarked, 'It is important to note that although interest in workers in alternative arrangements is relatively recent…some of these alternative arrangements have been in existence for decades.' The four categories used were independent contractors, on-call workers, temporary help agency workers, and workers provided by contract firms.
The first category, independent contractors, was intended to distinguish 'the self-employed— both the incorporated and unincorporated—who considered themselves to be independent contractors, consultants or freelance workers from those self-employed who were business operators such as shop owners or restaurateurs.' The second, on-call workers, 'are called into work only when needed…although they can be scheduled to work for several days or weeks in a row.' The third, temporary help agency workers, were those paid by a temporary help agency, whether or not their job actually was temporary. 'Workers provided by contract firms are 'employed by a company that provides them or their services to others under contract and who are usually assigned to only one customer and usually work at the customer's worksite'. It was admitted that 'the conceptual distinction between the two types of intermediary arrangements is somewhat blurred…'
The three methods of defining contingency produced estimates ranging from 2.2 per cent to 4.9 per cent of the workforce. Workers in contingent jobs tended to be part-time, young, student, female, black, in certain industries, such as services and construction, and in certain occupations. Most stated a preference for permanent, or, rather, 'non-contingent' employment.
The four categories of 'alternative' employment comprised approximately 10 per cent of the workforce. Most 'contingent' jobs were not 'alternative' and most 'alternative' jobs not 'contingent', accounting for about one-third of all contingent workers under the broadest estimate. Under the same estimate 3 per cent of all full-time and 11 per cent of all part-time jobs were 'contingent'. The authors of the survey reports made no comments on whether the findings were as expected. Although compared to those in other countries, the United States' labour market is relatively unregulated, they give an impression of considerable stability in employment arrangements.8
The 1997 survey found that 'In general, the proportion of total employment accounted for by each ['alternative'] arrangement, as well as the characteristics of the workers, was little changed', and that 'Both the number and proportion of workers with contingent jobs…fell between 1995 and 1997' (US Department of Labor 1998).
While Australians waited for more informative statistics, concern was expressed with 'The increased casualisation of the workforce. What is happening to full-time jobs?' 'Casual work is the principal manifestation of marginal, precarious, or contingent employment' in Australia' (Sweet 1995). But what was 'casual work'?
In 1996, EPAC noted that 'Casual workers as a proportion of total employees increased from 13 per cent in 1982 to around 24 per cent in 1995,' and explained, under the heading 'Casualisation of the workforce,' that:
Casuals can be defined as workers who are employed as and when required and as such have no legal entitlement to security of employment or leave and other benefits enjoyed by permanent employees. For statistical purposes, the ABS defines casuals as those employees who are not entitled to annual or sick leave in their main job…
The increase in casualisation [sic] has certainly added flexibility on both the demand and supply sides of the market [but] raises important equity considerations (EPAC 1996b, p. 22).
However, the category in question includes many quite different arrangements, and the meaning of the statistical trend is unclear except for one thing: most 'casual' employment was part-time and most part-time work was 'casual'; and as one rose, so did the other. In August 1997, 66 per cent of all part-time employees were 'casual' and 70 per cent of all 'casual' employees worked part time (ABS 6310.0).9
As a term of the language, a casual worker is one who, being available, works or not according to the immediate needs for labour of an employer or series of employers. The Oxford English dictionary's illustrative quotation, from 1923, is
Casual labor. 'Unskilled help, employed and discharged at frequent intervals, and dependent upon the varying demand of the labor market from day to day, without any prospect of continuous employment.'
A study conducted in 1968 of the use of casual labourers by one of five transport firms at a Melbourne rail terminal where goods were transshipped between trucks and railway wagons found that:
The flow of goods is a sensitive indicator of the general level of economic activity, varying from month to month and from year to year [and] demand for labor at the terminal varies accordingly, to the extent that it would be uneconomic to retain enough permanent staff to handle maximum tonnages. Demand also varies from day to day, because goods accumulate in the weekend…The staff therefore consists of about sixty permanent employees, with up to about forty casual laborers being recruited as the occasion demands…
Men seeking casual work assemble at the timekeeper's office…about 7.30 in the morning and are selected…as the needs of the day are determined. Normally the unit of employment is a single eight-hour day [although] first preference is given to men who are regarded as 'permanent casuals', there being four or five…in this category at any given time…Staff say that rarely or never are they unable to recruit as many casuals as they need… I observed two of these morning pickups. Each was attended by about twice as many men as were needed (Jordan 1969).
Call that kind of arrangement 'casual1'. The reference to 'permanent casuals' indicates a distinction within the category between those who have an ongoing. relationship with the employer, recognised by both parties, and those who do not: call the latter 'casual1A' and the former 'casual1B'.
That subcategory, corresponding approximately to the 'on-call workers' of the United States Bureau of Labor Statistics classification, is presumably very common and often informal, and would include, apart from relief teachers and the like, barmen, waiters and shop assistants called on when help was needed for the day or the evening, and people who worked intermittently for truck drivers or tradesmen on the same basis. An unpredictable discontinuity of employment is a defining characteristic of casual1, distinguishing it from, say, regular part- time or seasonal work.
A status approximating to casual1, defined by what it was not, had a shadowy and uncertain existence in common law. Call it 'casual1C'. Brooks (1985) says,
While much…ink has been spilt in an attempt to explain when a worker is an employee and when not, there is no such soul-searching in the…jurisdiction when it comes to differentiating between casual and full-time [sic] employment. It is true that the common law does recognise a distinction between contracts…for a fixed term and those of indefinite duration…In terms of protection for the employee, the distinction turns on the period of notice required to terminate the contract properly. No problems arise with fixed-term contracts but where the hiring period is indefinite then termination is by reasonable notice…
The absence of established principles for determining whether, as a matter of fact, employment was 'casual', was demonstrated in a case decided by the High Court of Australia in 1936 (56 CLR 1936 pp 545-566), on appeal from the Supreme Court of New South Wales, which had upheld a decision of the Worker's Compensation Commission.
The appellant, Doyle, injured while working at his trade of boilermaker after five weeks with the particular employer, was incapacitated for two months. The Commission's determination of lost earnings, and thus the rate of compensation payable, was based on the view that the employment had been casual—a term not defined in the legislation. It was argued in support of that view 'that the industrial award wages paid to the applicant were those fixed for hourly hiring of casual workers in his grade, and that when temporary employment was offering he worked…with the employers in the same industry for short periods.'
The bench of four judges was evenly divided and the appeal dismissed. However, they were agreed on the lack of clear criteria: Starke (against), 'The description "casual worker" is not one of precision: it is a colloquial expression, and where…there is a reasonably debatable question whether the work is casual or regular, the question is…for the commission.' Dixon (against): 'In the case of such typical casual work as wharf labouring [determination of average earnings] causes little or no difficulty. But unfortunately what is casual employment is ill defined. Indeed…it seems open to a tribunal of fact to treat most forms of intermittent or irregular work as casual.' Evatt (for): 'Doyle was not a "casual worker" at all… Nor did the commission find that he was a "casual worker", merely…that his employment with the particular employer was "casual" in the sense that he could be dismissed at an hour's notice…' McTiernan (for): '…the term "casual worker" is not capable of exact definition…Engagement at an hourly rate is not a criterion of casual…as distinct from regular employment… Many artisans in regular employment are engaged at an hourly rate [and] the appellant was engaged for an indefinite time on terms applicable to all such artisans in the respondent's employment…There was nothing in the evidence which would…justify the application of the term "casual" to the relations existing between the appellant and the respondent.'
The underlying question on which the judges were divided seems to have been whether the form of employment here designated casual1 could be defined clearly enough to determine whether or not the original decision had been unreasonable. Evatt, who thought it was, probably went too far in saying that whereas Doyle had stuck to the one trade, 'a true "casual worker"…is engaged in different trades, callings, or occupations'.
Although derived historically from casual1, the remaining, formal categories really constitute alternatives to it and each other. Australian industrial awards commonly recognised, defined and restricted the employment of casual workers. The distinction appears to date from a decision by Higgins as President of the Arbitration Court in 1921, where the Amalgamated Society of Engineers—meaning metalworkers in general—had applied for a federal award (15 CAR 1921, at 297).10 The union's claim included:
…weekly rates with one week's notice on either side before termination of employment…I have often expressed myself in favour of weekly employment in all cases where the nature of the business makes it practicable… There is nothing that steady family men desire more than constant work, and some certainty as to their income for a week or more ahead. My wages…are awarded on the assumption that the work is regular; and if the work is casual, not regular (as in the cases of the builders labourers and the waterside workers), I award more per hour than in the case of regular work. The employment—whatever it is—should yield enough to pay for the needs of family life and the suitable reward for special qualifications… It is in the interest of the employers as well as in the interests of the employees that the employment should not be casual, that a man should not feel himself to be a piece of flotsam or jetsam in the industry—that he should have a sense of homeship in the concern. Moreover, the wages prescribed will be less; I am providing for 10 per cent higher wages in undertakings such as [for example] Mort's Dock, in which casual labour for urgent repairs to ships seems to be necessary.
The decision was intended to set standards applicable beyond the particular industry. Noteworthy features are that the typical employee was imagined as a male breadwinner, that casual employment—corresponding to our casual1—ought, in the interests of all concerned, be kept to a minimum, and that payment of a loading on the daily rate would encourage the employer to pay by the week wherever possible, while providing casual workers with some compensation for broken employment. New workers also might be employed from day to day for fourteen days. Compensation for lack of entitlements was not discussed, presumably because few existed. The union's claim for 'twelve consecutive days' of annual leave on full pay was refused.
Many things changed over the years, including rates of female and part-time employment unimaginable in 1921, but the distinctions persisted, providing a framework within which contracts of employment, rather than actual jobs, were classified as 'casual' or not.
Much later, Campbell explained that:
…most provisions in awards are couched in terms of continuing ('permanent') full-time waged employment. The floor of minimum labour standards was in fact…built to support…employees in standard employment. But it is also common to find supplementary clauses that allow for…persons in non-standard employment [and] casual employment [is] the most frequently cited form… [They] are [excluded] from most of the benefits and forms of protection prescribed for permanent full-time employees…
When they provide for casual employment, awards typically seek to limit its use [for example] by specifying proportional limits or quotas…When the restriction prescribes a maximum number of hours per week…casual employment is confined to part-time hours and takes the specific form of part-time casual employment. In the absence of provisions for part-time permanent employment, this can in turn mean that all part-time employees under the award are confined to casual status (Campbell 1996).11
Call employment under contracts resulting from variants of such provisions or closely comparable agreements 'casual2'. The defining characteristic seems generally understood to be compensation for lack of certain standard entitlements by a higher rate of hourly pay.12 The category will not include all casual1 employment and will include many other arrangements; very commonly, as Campbell points out, ongoing or 'permanent' part-time employment in which any formal lack of job security may be ameliorated by implicit or explicit agreement. Casual2 also includes most if not all of the 'temporary help agency workers' of the United States Bureau of Labor Statistics classification. Under those arrangements, the agency contracts with and is paid by the client enterprise and in turn pays the worker it has provided, and assumes all of the other normal responsibilities of direct employer. However, industry practice is to provide no entitlements to paid leave, irrespective of the duration of the temporary placement, but to pay a compensatory loading on the hourly rate.13
A 1998 decision of the Australian Industrial Relations Commission concerned principally, as described below, with use of fixed-term contracts in tertiary educational institutions also touched on casual employment, which it defined as 'employment on an hourly rate [that] is specified in one of the relevant awards and is loaded by a factor that takes into account… lack of entitlement to some award benefits available to non-casual employees'—that is, casual2. However, the particular variant that had caused grievance—call it 'casual2A'—was ongoing but discontinuous part-time employment, suspended during breaks in the academic year (AIRC 1998).14
Basically, a person is a casual2 employee if employed under conditions specified by a particular award or agreement as pertaining to 'casual' employees, and those conditions may vary. In a case involving termination of the employment of a man who had worked as master of a cruise vessel under a contract embodied in a letter describing him as 'a casual employee' the Industrial Relations Court had to decide whether he was a person 'engaged on a casual basis for a short period'. The form of words originated in a convention adopted by the International Labour Organisation (ILO) in 1982, ratified by Australia and included in the Industrial Relations Act as a schedule. Obviously, the ILO had not been referring to the peculiarly Australian casual2. Noting that 'In Australian domestic law the expressions "casual employee" or "casual employment" are expressions with no fixed meaning',15 the court looked for a general concept appropriate to the purposes of the schedule and the corresponding regulation and, ruling in favour of the applicant, based its decision on a very fair description of casual1:
In my opinion, what is intended…is that the régime embodied in the Convention should not apply to employment…known to the parties at the time of engagement to be informal, irregular and uncertain and not likely to continue for any length of time… A characteristic of engagement on a casual basis is…that the employer can elect to offer employment on a particular day or days and when offered, the employee can elect to work. Another characteristic is that there is no certainty about the period over which employment of this type will be offered. It is the informality, uncertainty and irregularity of the engagement that gives it the characteristic of being casual…
Plainly Reed's employment was regular and, after early January 1996, would have been infrequent. However, it lacked the informality of casual employment. It was ongoing employment and Reed's obligation to work was clear from the agreement of 20 October 1995 (IRC 1996c).
A study of what became of workers retrenched from the textile, clothing and footwear industry included information on the recruitment practices of manufacturing firms known to have employed any of them at some time after 1993. In describing their firms' use of 'casual' workers—undefined but evidently meaning other than 'permanent', and therefore paid casual wage loadings and lacking certain entitlements—the representatives interviewed had incidentally illustrated the variety of arrangements subsumed under casual2. The report distinguished six categories, three of which were described as typically forms of ongoing employment. For example, 'probationary' workers who might be offered permanency at the end of a specified period, and 'quasi-permanent' workers who 'do not necessarily differ from permanent workers in any easily identifiable way', some of whom preferred higher pay to 'the protection of permanence'. 'Labour pool casual workers' are on-call workers corresponding to our casual1B; 'a reserve…of reliable and trained labour that can be drawn on at peak times and in emergencies', and 'agency casuals' are placed temporarily by the agency that employs them. The remaining categories, fitted into the permanent vs casual2 dichotomy as 'restructuring' and 'technical-organisational casual workers', are suppliers of business services. 'Restructuring casual workers' are outsiders recruited when managers 'wish to transform work culture [and do away with] long-standing work practices…out of step with the organisation's new…directions', and may or may not be kept on after the change has been made. 'Technical-organisational workers' provide services ancillary to the firm's main production processes: 'computer programmers are employed as consultants, women in data entry are casual part-timers and truck drivers may be simply on-call casual' (Weller, Cussen & Webber 1999).
The ABS definition of 'casual employees' as 'employees who were not entitled to holiday leave or sick leave [sc. both…and…] in their main job' was intended to approximate to the status created by industrial awards and agreements but would cover a wider range, even assuming that respondents knew what their entitlements were. Call the statistical category 'casual3'. Its relationship to casual1 is remote and impossible to define precisely. (In a minor variant used in the 1995 Australian Workplace Industrial Relations Survey (AWIRS 95) (Morehead et al. 1997), managers providing information were advised that 'casuals are not usually entitled to paid holiday or sick leave.') Any disadvantages, including those that began in attempts to preserve the jobs and entitlements of existing full-time workers and confined part-time workers to casual2 contracts, were disproportionately borne by women. In August 1997, 32 per cent of all female employees but only 21 per cent of males were in casual3 jobs (ABS 6310.0).
Some indication of the defects of casual3 was given by a special survey, conducted by the ABS in New South Wales in October 1991, which used a more elaborate classification of non-standard forms of employment. The criteria for distinguishing 'casual' from other work were reduced to holiday leave entitlement only, a non-casual job was 'permanent' rather than 'temporary' if the respondent understood it to be permanent and a 'casual' job, being also part-time, was 'irregular' rather than 'regular' if, an hourly rate being paid, income from the job fluctuated. Table 1 below shows the distribution of the sample between categories and rates of entitlements for each. Nearly half were classified as 'regular casual' workers. Only one per cent of persons were 'temporary part time', and they have been combined with 'permanent part time' workers. We see that although coverage of benefits and favourable conditions was lower for 'casual' than for 'permanent' workers they did extend to substantial minorities. Either the two major categories were not distinct or the single criterion of holiday leave entitlement was insufficient to establish the distinction.
|Benefits and conditions
|Long service leave||32||66||10||10||9|
|Percentage of sample|
Notes: Figures in smaller categories are liable to sampling error. 'Don't know' responses have been ignored, and figures are therefore minima.
Source: ABS 6247.1
That survey of 'part-time, casual and temporary employment' was repeated in October 1997. Apart from an implausible tenfold increase in 'casual full-time employment'—our Figure 22 indicating much less growth—the published figures showed more change in conditions than categories of employment. Setting 'casual full-time' employment aside, 'permanent and temporary' part-time had increased slightly to 33 per cent, 'regular casual' had fallen slightly to 42 per cent, and 'irregular casual' and 'other' part-time had increased to 15 and 8 per cent respectively—all consistent, allowing for errors of sampling and measurement, with no change. However, the reported rates of coverage by superannuation, awards, long-service leave, study leave, training provided by the employer, promotion opportunities, overtime payments and worker's compensation had all increased. The reasons given most commonly for the current type of employment were 'personal choice' and 'for study purposes', followed by 'only type of work available' (ABS 6247.1, 1997).
Among the strange consequences of the definition of casual3 is the inclusion of very many people whose employment appears to be stable. In February 1993, 59 per cent of full-time and 55 per cent of part-time 'casuals' had been with the current employer for twelve months or longer. Stranger still, it will include numbers of people who are in fact self-employed because, if their businesses are incorporated or if, under some other arrangement such as a partnership they pay themselves a wage, then they are classified as employees and, hardly needing to award themselves paid leave entitlements, will fall into casual3. In August 1990, 23 per cent of casual3 wage and salary earners were 'managers and administrators', 'professionals', 'paraprofessionals' or 'tradespersons'.16
For whatever it may be worth, Figure 22 shows casual3 workers as percentages of all full-time employees from 1988 to 1997. The trend was rising but the peak in 1989, the sharp fall between 1989 and 1990 and the resumed rise thereafter—to 11.5 per cent for males and 9 per cent for females in 1997—are suggestive of cyclical factors. No explanation for the widening gap between male and female rates is apparent.
Figure 22: 'Casual' workers as percentage of all full-time employmees, 1988-1997
Source: ABS 6310.0
All figures are for August, no publication in 1996t
The not inconsiderable literature on 'casual' employment in Australia, concerned largely with disadvantages attached to the status, drew its conclusions from the flawed and ambiguous casual3 statistics, either in the ABS or supposedly identical AWIRS version, because there were no others. Even commentators as well informed and otherwise lucid as EPAC were liable to invest them with meanings they didn't really possess. For example, the indented quotation from EPAC (1996b, p. 22) above slips from casual1 to casual2 in the first sentence, and to casual3 within the first paragraph. Campbell (1996) goes a step further and writes that:
…labour market deregulation tends to facilitate an increased dispersion of wages and conditions [which] for particularly unfortunate groups of permanent employees…poses the threat of a degradation that may bring at least some of the conditions…down to a level normally associated with casual employment.
[Certain] evidence points to a deterioration of conditions among part-time permanent employees. Working-time conditions…traditionally associated with casual employment now appear to be spreading within this section of the workforce. [I]t appears…appropriate to describe the emergence of these degraded forms of part-time permanent employment as elements in a general process of casualisation, in the broad sense of the spread of casual conditions of employment.
Here, in what may be called 'casual4' employment, the term has become figurative or metaphorical, evoking the image of the men standing on a loading dock at dawn, hoping for a day's work, but applying it to very different people in utterly different situations.
It was becoming harder to believe that the statistical category, casual3, was an accurate measure of a particular form of contract defined in Australian industrial law, casual2, based in a category supposedly recognised in common law that, in turn, reflected the daily reality of the workplace, casual1. Wooden and Hawke, having used data of AWIRS 90 and AWIRS 95 to explain the relationships between worker characteristics, workplace characteristics and casual employment, admitted that casual3 was 'not without difficulty' because of the variability of casual2 conditions of employment. Discrepancies between ABS and AWIRS data suggested that 'the ABS measures may not be as reliable as widely assumed', because 'ABS estimates may be biased upwards, and increasingly so over time, as a result of treating managers of incorporated enterprises as employees. Moreover, these…difficulties can be expected to increase given the gradual shift towards individual- and enterprise-based bargaining arrangements' (Wooden & Hawke 1998).
|Semantics of casual employment: a summary|
|Casual1||Work found or accepted according to the immediate need for labour of one, several or a series of employers.|
|Casual1A||No ongoing relationship with employer.|
|Casual1B||Ongoing relationship with employer, but employment intermittent. Includes many employees of temporary employment agencies.|
|Casual1C||Supposed reflex of casual1 in common law, defined, if at all, in opposition to ongoing or 'permanent' employment.|
|Casual2||Employment designated 'casual' in Australian industrial awards, agreements and contracts of employment, derived historically from casual1 but usually defined, if at all, in opposition to 'permanent', or to 'full-time' and 'regular part-time', employment. Mostly part-time and characterised by payment of 'casual loading' on hourly rate and absence of various rights and entitlements attached to 'permanent' employment—although may be continuing. Casual2 contracts sometimes used during a probationary period.|
|Casual2A||Variant of casual2 in which employment is ongoing—if subject to renewable fixed-term contract—but discontinuous.|
|Casual3||Approximation of casual2 used by ABS: employment for wage or salary without entitlement to paid sickleave and annual leave.|
|Casual4||Figurative or metaphorical extension, as in 'a general process of casualisation', meaning erosion of the rights and entitlements of 'permanent' employees.|
The ABS did conduct its supplementary survey of forms of employment in August 1998, applying new methods of classification to the augmented information. The results confirmed that the standard measure of 'casually employed persons' was far removed from its archetype. The procedure was, roughly, to identify persons working for an employer for wage or salary, to set aside those paying themselves, to identify in the remainder those not receiving paid sick and holiday leave and then, among them, those who considered their employment to be 'casual' (ABS 6359.0, 1998).
As summarised in a Productivity Commission research paper, 23.2 per cent of employed persons covered by the forms of employment survey would have been classified as casual employees by the standard ABS definition (our casual3), but reclassification, mainly of owner-managers and persons who did not see themselves as being employed as casuals, reduced that figure to 17.7 per cent. ('Self-identified casuals' were 61 per cent female and 24 per cent full-time students aged 15 to 24.) Furthermore, 38 per cent of self-identified casual workers reported that their earnings did not vary from month to month and 76 per cent that they expected a fixed-term contract to be renewed or, in the absence of such contract, that they expected to be with the current employer or business in 12 months' time. The corresponding adjustment left 11.3 per cent of employed persons who were self-identified casuals with variable earnings or without implicit contracts for ongoing employment.
Self-identified casuals were distributed across industries but with the heaviest concentrations in 'retail trade' and 'accommodation, cafés and restaurants', and in lower-skilled occupations although, possibly in some contrast with the past, 'clerical, sales and service workers' greatly outnumbered 'labourers and related workers'. Four per cent—that is, 1 per cent of the whole sample—were paid by an employment agency. The stepwise process of classification hardly revealed a coherent or homogeneous category, but probably none exists. Why respondents described their employment as 'casual' or not is unknown (Murtough & Waite 2000a, and ABS 6359.0, 1998).17
In December 2000 the AIRC determined an application for variation of provisions of the Metal, Engineering and Associated Industries Award relating to casual and part-time employment (AIRC 2000). In February 2001 the Commission, pursuant to 'conferences and written submissions', issued an order amending its previous decision (AIRC 2001). Casuals, defined as persons 'engaged and paid as such', were still supposedly 'employed by the hour', and were excluded from award entitlements for 'personal leave…parental leave, public holidays, notice of termination,…remedies against unfair dismissal within the first 12 months of service, [and] severance pay'. The loading on the hourly rate was now 20 per cent.
Noting 'a drift toward more indefinite terms of employment', the Commission concluded that 'casual employment is often a continuing employment, until the need arises to interrupt or terminate it [and then] is terminated at will or on short notice, or is treated as expired if not renewed.' The actual pattern was neither a sequence of hourly engagements nor 'informality, uncertainty and irregularity of engagement'. Evidently 'casual and irregular engagements' were still needed, 'but in many instances long-term casual employment is based on habit, administrative ease, or probationary screening practices.'
However, the union's application to have casual employment restricted to 'short term and emergency work needs, or to work that cannot practicably be rostered to "permanent employees"' was rejected. The proposed conditions might be desirable but 'would be difficult to apply with any real precision' and although the award definition was circular it 'does have a clear meaning', and neither union nor employers proposed to remove it. The type of employment was used widely for a variety of legitimate reasons, catered for by the award over many years. 'It is far too late to reverse that acceptance.' And there was 'a body of evidence indicating that for some employees the casual employment and loaded rate régime is not unsatisfactory to their needs.'
The approach was to ensure as far as possible that casual contracts were entered into with the employee's informed consent, and that that a person 'who has been engaged by a particular employer for a sequence of periods of employment…during a period of 6 months shall thereafter have the right to elect to have the contract converted to [ordinary] full-time…or part-time…if the employment is to continue…' That period might be extended to 12 months by agreement, and the right of election was only to express a preference. The employer might consent to or refuse conversion, 'but not unreasonably', and 'an employee must not be engaged and re-engaged to avoid any obligation under this Award.' After conversion the employee might revert to casual status by agreement. Minimum daily hours of engagement would be set at three hours for ('permanent') part-time workers and four hours for casuals, although both might apply for shorter periods to accommodate individual circumstances. The casual loading would be increased to 25 per cent.
The Commission's implicit aim was to bring the award's casual2 status closer to the casual1 of the present analysis, by requiring the parties to ongoing engagements at least to consider the appropriateness of the classification. The amending order also introduced a novel category, still closer to casual1—the 'irregular casual employee'—who was excluded from the qualified right of conversion. 'An "irregular casual employee" is one who has been engaged to perform work on an occasional or non-systematic or irregular basis' (AIRC 2001, 4.2.3 (f)). 'Engaged' evidently referred to the sequence of engagements over the period in question rather than the terms of initial engagement, and the exclusion could provide the employer with 'reasonable' grounds to refuse conversion.
Little emerged about the composition of the casual1 workforce or its patterns of employment, and little more from the ABS forms of employment survey. Tentative conclusions might be expressed in the form of hypotheses:
- Casual1 employment persisted, but not as the typical form of any industry nor, probably, as both the principal activity and sole source of income of a substantial proportion of all employed persons. Many casual workers were students, and although the AIRC referred only in passing to 'linkages between employment and social welfare access', social security income tests had been relaxed specifically to encourage supplementation of payments by casual and part-time work. Distribution between industries and the frequency of variable earnings suggested that many were on-call workers.
- Much casual1 employment and much more casual2 employment was ongoing, and, although both might be temporary, much temporary employment was not classifiable as either.
Rates of change of employment might reflect either its insecurity or opportunities to leave less attractive jobs for more attractive ones. The term 'involuntary part-time employment' has been applied to people in part-time jobs who would prefer but cannot find full-time work. In August 1998, 38 per cent of male, 22 per cent of female part-timers and 45 per cent of 'self- identified casuals' working part time said they would prefer longer hours—but not necessarily full time. Still, most were apparently satisfied, preferences can be strong or weak, realistic or unrealistic, and a more reliable measure of dissatisfaction may be that 17 per cent of male and 7 per cent of female part-timers said they 'had actively looked for full-time work in the four weeks to the end of the reference week' (ABS 6203.0).18
A 1996 survey of part-time women workers in 'a large banking and financial organisation in Australia' found them to be 'a complex, variegated social grouping. [T]he majority of…the sample were content with their current part-time work arrangements' and 'the most common motivation for working part-time was to spend more time with dependent children'. Twenty per cent, who tended to be younger, primary or equal income earners with no children of pre- school age, could be regarded as involuntary part-time workers in that their current preference was for full-time work, and 'almost one in two part-time women workers expressed a desire for full-time work in the future'. However, for one-quarter of the sample, mostly married and secondary income earners, about two-thirds of whom wished to retain their present status, 'the decision to work part-time had been decoupled from dependent children'. 'There was no evidence that these women were "trapped" in part-time employment because of limited opportunities [for] full-time work' (Walsh 1999).
Statistics on actual changes in employment status confirm that male part-timers were relatively dissatisfied and female part-timers relatively satisfied with their hours of work. Figure 23 shows proportions of males and females unemployed at the labour force surveys of October in the years from 1990 to 1998 whose status had changed to full-time and to part-time work a month later, and the proportions whose status changed from part-time to full-time work. Males were consistently much more likely than females to go directly from unemployment to full- time work and, if in part-time work, to move into full-time.
Another indicator of occupational mobility is the number of jobs held in a given period. The proportion of respondents who, having been employed in the previous twelve months, had changed jobs at least once is shown in Figure 24 for the years 1980 to 2000. Male and female rates were very similar, and the main influence on both seems to have been the business cycle, with lower rates of change in downturns.19 The data presented in Figure 25 come from the same survey and seem to confirm that in the 13-year period both mobility and length of tenure varied cyclically, although the series is too short for any certainty.
McDonald and Felmingham (1999) studied disaggregated Labour Force Survey data from 1987 to 1996 and found that 'the general patterns in job mobility over the business cycle [were] similar across both job and personal characteristics.' However, 'Results suggest…a change in the labour market following the 1990s recession, characterised by higher incidence of retrenchments, stagnant rates of voluntary mobility, and consistently higher incidence of unemployment following retrenchment.'
Figure 26, on reported rates of retrenchment between 1988 and 2000, also suggests that something may have changed. The main influences seem again to have been cyclical, but when male rates fell and female rates stabilised in the 1990s they did not return to the levels of the 1980s, possibly indicating a structural shift.
If the various forms of non-standard employment really had become more common it might be expected that temporary jobs—where the contract is for a specified period or until completion of a task—would constitute an increasing proportion of the total. Figure 27 shows temporary or seasonal work as a proportion of all jobs terminated, except by retrenchment, from 1988 to 2000. Retrenchments were excluded on the assumption that job-shedding in recession might obscure any secular trend. The male trend seems to rise gently until stabilising in the 1990s and the higher female rates to show little change.
Student labour supply is of importance to temporary and seasonal as well as part-time employment. For example, in the year ending February 1998, 18 per cent of all such terminations were followed by return to study.
However, the accuracy, or at least the meaning of the statistics is uncertain. Apparently, the varieties of temporary employment that involve an agency as direct employer were enumerated incompletely, the volume of temporary placements by private agencies being much higher than the 10 000 estimated for the year ending in July 1994 (ABS 6245.0).20 When the relevant question was asked directly in the 1998 forms of employment survey, the estimated total currently 'paid by an employment agency' was 84 300 (ABS 6359.0). Not only that, but the figure of 270 100 terminations of 'temporary or seasonal' jobs in the year ending February 1994 must have been too low.
Information obtained from the main association of private agencies supplying temporary workers was that its members, who represented about 85 per cent of the industry, made approximately 372 000 placements in the 12 months to March 1995. A survey of group certificates indicated a median duration of seven to eight weeks. Demand rose in the phase of recovery from recession because employers, unsure it would be sustained, chose to recruit temporary rather than permanent labour. Recognised categories of temporary worker included women with children, students and people whose preferred lifestyles preclude continuous employment.21 Much of the employment in the shearing industry was organised in the same way, with contractors acting as the direct employers.22
Figure 23: Rates of change of employment status by sex, 1990-1998
Source: ABS 6203.0
Between October and November except 1992 (July-Aug)
Figure 24: Worked at some time in previous year, changed employer or business, 1980-2000
Source: ABS 6206.0, 6209.0
Note: Some changes of definition between earlier and later figures
Figure 25: Persons working in February: current duration and whether job change in previous year, 1988-2000
Source: ABS 6209.0
Figure 26: Ceased job in last 12 months, 1988-2000, percentage retrenched
Source: ABS 6209.0
Figure 27: Temporary or seasonal as proportion of all terminations, except retrenched, 1982-2000
- 5.1 Self-employed (and 'own account') workers
- 5.2 Independent contractors: appearance and reality
- 5.3 Taxation reform and survey evidence
As with casual work, self-employment is not easy to define precisely, and both legal statuses and statistical categories may depart from definitions corresponding to common understanding and appropriate to economic analysis. A further difficulty in attempting to examine trends over time is that forms of contract may be manipulated to obscure the worker's actual status for such purposes as tax minimisation or on-costs of labour to an employer.
The American Heritage dictionary defines 'self-employed' as 'earning one's livelihood directly from one's own trade or business rather than as an employee of another.' The Oxford English dictionary defines 'on one's own account'—as in 'business on…'—as 'for one's own interest, and at one's own risk,' which catches something important, because we are concerned primarily with the worker who, as expressed by Creighton, 'goes out into the marketplace and contracts to perform a specified task for a principal on the basis of a fee for service…bears the risk of the undertaking, and stands to take the benefit of any surplus or profit which may be generated' (Creighton 1994). However, 'fee for service' is too narrow. Adam Smith (1776 Bk I, Ch VIII) defined the 'independent workman, [who] gets profits as well as wages' in terms of his ownership of value added: 'It sometimes happens…that a single independent workman has stock sufficient both to purchase the materials of his work and to maintain himself till it be completed. He is both master and workman, and enjoys the whole produce of his own labour, or the whole value which it adds to the materials upon which it is bestowed.'
Smith's definition remains an excellent description of some forms of self-employment, but we need one general enough to include, say, a craftsman, farmer, fisherman, haulage contractor, plant operator, plumber, electrician, landscape gardener, tailor, shopkeeper, hairdresser, musician, author, data analyst, doctor, lawyer and prostitute, but specific enough to distinguish some members of each of those occupations from others.23 A reasonable approximation might be as described in the following paragraphs, with a summary in Table 3, page 59.
The self-employed worker is an entrepreneur who engages in a series of transactions in which he buys or hires whatever land, premises, equipment and materials may be necessary to the production of whatever goods or services he sells,24 may increase his net income by more efficient use of inputs and the price, quality and reputation of what he sells but also, if dependent on that employment for a livelihood and perhaps while fully employed, may go broke. The worker is also a manager, although some management services may be bought, and he may be assisted by family members with or without pay. Nor is self-employed status necessarily lost by use of other paid help as long as the proprietor remains directly involved in and in detailed control of production.
Using subscripting for brevity, let us call that 'self-employed1'.
Creighton says of 'work arrangements falling outside of the traditional legal conception of employer/employee relationship', that:
The most obvious example[s] are those which involve persons who work under contracts for services rather than contracts of service—that is, those who are independent contractors rather than employees… Traditionally the distinction hinged upon whether the 'master'…could be said to 'control' the 'what, the how and the when' of the 'servant's'…job. [This] has proved singularly ill-suited to the…requirements of post-industrial society. Yet the courts…have shown a dogged persistence in trying to adapt this pre-industrial concept of control to [present] circumstances…The State and federal parliaments are similarly afflicted (Creighton, 1994, pp 57-59).25
Let us call the various legal definitions collectively 'self-employed2'.
Although not concerned with legal complications, Covick (1984) also had referred to 'the problem that while in principle the self-employed sell the output produced from their labour rather than their labour itself, it is often in practice very difficult to make the distinction…The border between self-employment and wage (or salary) earning employment is a blurred one rather than a precise boundary.'
In the United States, the Bureau of Labor Statistics survey of alternative employment arrangements, 'independent contractors' were:
Workers identified as wage or salary workers in the basic CPS [Current Population Survey] who answered affirmatively to the question, 'Last week, were you working as an independent contractor, an independent consultant, or a freelance worker? That is, someone who obtains customers on [his] own to provide a product or service.' Also, workers identified as self-employed in the basic CPS who answered affirmatively to the question, 'Are you self-employed as an independent contractor, independent consultant, or something else (such as a shop or restaurant owner)?' in order to distinguish…independent contractors…from those who were business operators…
[I]ndependent contractors may have one client or many, may have employees or work alone, and may or may not have businesses that are incorporated… Of all the self-employed, about one-half were reported to be independent contractors [and] some 85 per cent of independent contractors were classified as self-employed in the basic questionnaire… (United States Department of Labor 1996, Cohany, p. 32)
That seems to distinguish the main varieties of self-employed1, suggesting it ought to be subdivided into self-employed1A for independent contractors and self-employed1B for (other) own-business operators. Those distinctions have not been made in Australian collections. In an article on 'trends in self-employment' published in 1997 the ABS explained that:
A self-employed person can be an own account worker or an employer and is defined as a person who operates his…own economic enterprise or engages independently in a profession or trade and the business is not incorporated, either with or without employees. This definition excludes owner-managers of incorporated enterprises, who are defined as employees. (ABS 6203.0, January 1997)
That suggests that own-account workers were a subcategory of self-employed person. However, as of 2001 the definition of 'own-account worker' was (ABS online), 'A person who operates his or her own unincorporated enterprise or engages independently in a profession or trade, and hires no employees (this category was formerly entitled self-employed). (Emphasis added.)
Some of the misleading consequences of the exclusions were mentioned above. People working in their own businesses, being limited liability companies, with or without employees, were themselves 'employees'; 'employers' were people who worked in their own businesses, not being limited liability companies, with employees, and 'did not pay themselves a wage or salary'.
Those peculiarities were at least partly because of particular requirements for compilation of national accounts. Call the ABS category 'self-employed3'. Its inconsistencies with self-employed1 meant that many respondents, even those who knew, for example, that incorporated enterprises are persons at law, would give 'incorrect' answers, as might a tradesman who sometimes employed an assistant on a casual basis, or took on an apprentice, or set up a partnership with his wife to split income for taxation purposes.26
The discrepancies between self-employed1 and self-employed3 could cause the ratio between the two to change over time with, say, changes in types of business or in taxation or regulatory régimes, which would affect the significance of statistical time series. Subject to that proviso, reputed changes in the labour market would lead us to expect increased self- employment in relation to wage and salary employment. Figure 28 shows figures for males and females from 1986 to 2000, after exclusion of employment in agriculture, forestry and fishing, where self-employment could have been decreasing for quite different reasons. Male and female figures moved together at different levels, although the calculated male trend rose gradually until stabilising in the later 1990s and the female trend line was nearly flat.
The ABS article mentioned above presented quarterly trend figures of the ratio between 'self- employed and all employed' from 1978 to 1996, and concluded that 'Changes over time in the number of self-employed persons have followed a similar trend to all employed persons… . Both series show cyclical behaviour… [T]he male self-employment rate increased slightly… ' Changes between 1986 and 1996 were looked at in some detail. In both years the heaviest concentrations were in agriculture, construction, retailing, and property and business services, and notable increase had occurred in the proportion of self-employed workers with post- school qualifications.
Figure 29 indicates that one factor in change may have been part-time self-employment. The series is not exactly comparable with the one shown in Figure 28 because agriculture, forestry and fishing cannot be excluded in the published data. However, the male trend was for a gradual but distinct fall in full-time as opposed to part-time self-employment with, yet again, stabilisation in the later years. The female proportion changed very little.
It cannot be concluded that nothing much was happening in the labour market in respect of the various forms of self-employment. Perhaps the available instruments of measurement failed to detect or quantify changes. The statistical categories are opaque, several categories of interest are not distinguished clearly or at all, respondent error may be relatively high; and the statistics may be somewhat worse than uninformative. In the period between 1988 and 1993, growing discrepancies appeared between the ABS labour force series, reported in 6203.0, and the ABS quarterly survey of employment and earnings (SES), reported in ABS 6248.0, where information on wage and salary earners is supplied by a sample of employers. As explained by the Bureau in that publication for September 1994:
The monthly Labour Force Survey collects data by interview from a sample of about 29 000 …dwellings… Self-employed persons are included in the Labour Force Survey… There are conceptual and methodological reasons for differences in the estimates produced by the two surveys…
Since the introduction of the SEE series in… 1983, the estimates of the number of wage and salary earners have been lower than those from the LFS. The difference between the two series started to widen during 1989 and has grown to its present level of approximately 610 000.
When making comparisons of…the two surveys it must be borne in mind that SEE draws its sample from the ABS register of businesses [which] on occasions…can be subject to undercoverage of business units and…affected by delays… This…cannot [affect] a household based collection, such as LFS.27
Figure 28: Ratio of self-employed (own account) workers to employees, excluding agriculture, forestry and fishing, 1986-2000
Source: ABS 6203.0
All figures are for August
Figure 29: Self (own account) employment, all industries, proportion full-time 1986-2000
Source: ABS 6203.0
All figures are for August
If, as that suggests, the LFS be taken as reliable, the SEE failed to account for more than 9 per cent of wage and salary earners. Other explanations, not necessarily mutually exclusive, are possible. In one of a series of reports, VandenHeuvel and Wooden suggested that a contributory factor was overcounting of wage and salary earners because of
…an increase in the number of former employees now being employed on a contract basis without experiencing any fundamental change in either the type of work of the principal- agent relationship between employer and worker. A problem with using the self- employment data from the Labour Force Survey as an indicator of trends in contract employment is [that] some individuals [will] consider themselves to be…wage and salary earners when in fact they are not on the company payroll (VandenHeuvel & Wooden 1994).
They referred to these 'employees in all but name' as 'dependent contractors', as opposed to contractors who regularly provided services to more than one organisation. Using new data, the same authors (VandenHeuvel & Wooden 1995) estimated that 38 per cent of non-farm self-employed contractors were 'dependent'.
One obvious motive for an employer to reclassify employees would be minimisation of oncosts of employment, and one incentive for employees to accept would be receipt of total earnings instead of earnings after pay-as-you-earn (PAYE) taxation. The ATO having long been concerned by possible avoidance of responsibilities normally incumbent on parties to an employer-employee relationship, the then Treasurer, introducing the 1995-96 Budget, foreshadowed legislation to prevent loss of revenue from:
Certain labour market practices [which] have entailed the replacement of traditional…employer/employee arrangements with labour or result-based contracts… Some of the new arrangements are purportedly outside the scope of the pay-as-you-earn provisions of the income tax law [which] will be amended [to] cover payments for the labour of a contractor which were always intended to be covered. Consequential amendments will also be made [to] related laws; for example, in determining which payments for labour are within the scope of the Superannuation Guarantee legislation.
In other cases, individuals form an entity, such as a company [which] may be used with the intention that…personal services income, which would otherwise be assessed to an individual, is received by an entity and then alienated. For example, the income is split with family members to reduce overall tax liability…
The Government's objective is to ensure that the appropriate tax is payable by individual taxpayers on income which is clearly derived from the personal services provided by the individual (Department of the Treasury 1995-96).
That particular proposal lapsed with change of government in 1996. Meanwhile, the attempts of the ATO to enforce current provisions illustrated the difficulty of any clear distinction, unless arbitrary, between independent contractors and employees, and suggested that contracts of employment had indeed become more varied. New forms of contract may have developed.
The ATO was aware of the complexities. In 1985, it had issued a ruling 'to set down guidelines to assist in the identification of the payments, described as "salary or wages" to which the PAYE system applies' (ATO, 1985). The ruling contained 23 numbered criteria on which a 'master and servant relationship' might be distinguished from an 'independent contractor relationship'. For example, whereas 'an employee…will usually be engaged to work on a continuing basis and at the direction of the employer' the agreement with a contractor 'will require the performance of a specified task/s'; whereas 'plant and equipment is normally provided by the employer' of a wage or salary worker, such provision 'is usually the responsibility of the contractor'; and whereas payment of an employee 'is often…for the time actually worked' and 'normally made on a regular basis', 'the contract [with an independent contractor] will provide for the specified work to be performed for an agreed sum or other sum ascertainable by reference to the contract [although] the contract may also provide for payment of the agreed sum by instalments or progress payments…' The words 'usually', 'normally' and 'often' acknowledged the absence of simple and conclusive tests, although 'The presence of a right to control how, where, when and who is to carry out the work in question points very strongly (and usually conclusively) to employee status.'
If application of specific criteria were inconclusive the relationship might be deemed on its overall character to be that of employer and employee:
The more an individual's activities are integrated with that of the principal the greater the prima facie inference that the individual, while perhaps not an employee as such is, in the work performed, virtually in the same position as an employee as such. Payments for work performed by such individuals would constitute 'salary or wages' for the purposes of [taxation].
The 1985 ruling was largely an attempt to codify precedent common law. From time to time determinations were appealed against and became subject to external review, and the question of whether or not a person was an independent contractor was also at issue in cases litigated for other reasons. The series need not be considered in detail, but five cases decided in as many jurisdictions will give some idea of the issues and how they were dealt with.
Forms of contract had fiscal implications for State as well as federal governments. A decision of the Administrative Appeals Tribunal of Victoria in 1996—although the events under review went back to 1987—concerned liability to payroll tax in respect of people employed part-time as interviewers by a firm conducting surveys of public opinion (AAT(V) 1996). The particular interviewers seem in fact to have been on-call workers, 'currently…expected to work about two weekends a month,' 'not subject to any written contract or retainer,' and paid at rates 'having regard to [the firm's] assessment of the time that may reasonably be required to complete the given number of questionnaires.' Income tax was not deducted and no entitlement was provided for holiday pay or long service leave.
The company argued that 'the interviewers were not employees, but rather independent contractors…engaged for each assignment,' which they could accept or decline. They were 'paid on a piecework basis', subject to control only so far as to ensure validity of data, did not work set hours, were free to engage in other work, and so on. In finding against it the tribunal saw no need to go far beyond the issue of control: 'The essence of the case…is that the company tells its interviewers precisely what to do and how to do it, and then employs people to check that they have done so.' The 'voluntary and irregular nature of the work…must be the case with many casual employees.'
In another 1996 decision the relevant legislation was the Industrial Relations Act 1988. A young man described by the court as 'relatively unsophisticated generally, and particularly in relation to dealings with…employers', had words with his boss and was sacked on the spot. In the upshot, entitlement to compensation for dismissal without payment in lieu of notice was contested on the ground that 'the applicant was an independent contractor and…not an employee'—a term defined unhelpfully by the legislation as 'any person whose actual occupation is that of an employee.' Although he had subscribed to a form of agreement defining his status as that of a subcontractor with no entitlement except a specified payment for each day worked, and explicitly responsible for 'outgoings such as income tax…accident and other insurance…superannuation' and so on, 'The applicant argues that in spite of that agreement he was an employee, if you like, in heavy disguise.' It appeared that he had been 'committed to working for the respondent, or to making himself available…every day of the week', had been paid weekly for days worked, and that 'the respondent exercised almost complete control over the applicant in the performance of the work.' Finally, when it was put to the respondent 'that the purpose of the contract was to avoid his obligations as an employer…he agreed with that proposition [and] following on from that…to avoid all that flows from that relationship' (IRC 1996a).
A third case requiring application of common law, decided by the New South Wales Court of Appeal in 1996, concerned the liability of a firm under the Superannuation Guarantee (Administration) Act 1992 to make contributions towards the superannuation of persons employed as courier riders and drivers. The degree of control exercised by the appellant company had been emphasised. However, the court upheld the appeal on the grounds that the couriers supplied their own vehicles and equipment, were paid so much a delivery, had been taxed as independent contractors, were free to use their own business names and therefore, 'although…the case is hardly without difficulty…at common law…must be classified as independent contractors', and that, while the legislation referred to 'a contract that is wholly or principally for the labour of the person', 'In view of the fact that each courier provides his own capital and faces the loss of that capital if the venture does not work out…the courier is working for himself,' and therefore outside the scope of the statutory provision (NSW SC 1996).
Judgment in that case, Vabu, referred to a 1986 decision of the High Court of Australia, in which a man engaged in a logging operation as a truck driver had been injured in 1977 as a result of the admitted negligence of a man driving a bulldozer. It had been claimed that the firm conducting the logging was legally responsible for the bulldozer driver's negligent act, either because he was their employee or, if he was not, because, being in charge of the workplace, they had failed in a duty of care to provide safe working conditions. The first question to be decided was whether the bulldozer driver had been an employee or an independent contractor, which involved giving some attention also to the status of the truck driver, who had been employed on similar terms. The court noted that:
A prominent factor in determining the nature of the relationship between a person who engages another to perform work and the person so engaged is the degree of control which the former can exercise over the latter. [That, however], whilst significant, is not the sole criterion by which to gauge whether a relationship is one of employment. The approach of this Court has been to regard it merely as one of a number of indicia which must be considered in the determination of that question…Other relevant matters include, but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provision for holidays, the deduction of income tax and the delegation of work by the putative employee (Aust HC 1986).
The two men had 'provided and maintained their own equipment, set their own hours of work and received fortnightly payment…determined by the volume of timber they had been involved in delivering'. No tax had been deducted, and 'Stevens's profit and loss account for the years [1976-77 and 1977-78] showed the ratio of his expenses to his gross income to be approximately 71 per cent.' Work was not guaranteed and they could seek other work if temporarily not required. Operations were supervised by a bush boss, but there appeared to be no intention that he should have authority 'to direct [the men] in the management and control of their equipment.' Furthermore, the bulldozer driver had delegated responsibility for driving his truck to his son.
Those facts, taken together, might be inconclusive only if weight were given to the so-called 'organisation test'—very similar to the 1985 Tax ruling's 'integration test', and probably its inspiration. It had been treated in various ways by the courts but, as applied to the present case, could involve consideration of the extent to which the men had been merely contributing to the timber company's business rather than conducting their own. The court thought that the 'control' test was 'the more cogent in determining the nature of the relationship'. It found that both men had been working as independent contractors, and that the company had not failed to take reasonable action to ensure safety.
In the fifth and last case, decided by the Federal Court in 1997, the eight applicants for review were involved in operating taxi services as regulated by legislation in four States, and were disputing the ruling of the Commissioner of Taxation that they were to deduct tax from their drivers' earnings and to pay superannuation guarantee charges. The Commissioner argued that the drivers were employees either in common law, being paid under contracts wholly or principally for their labour, or under 'the extended statutory definition' as being 'an integral part of the plaintiffs' businesses.' All parties had agreed to seek no order as to costs.
Contracts varied in detail, but in each case the vehicles were owned and maintained by the taxi company, issued to drivers at the beginning of a shift and returned at the end with payment either as a percentage of fares received or a fixed sum. The court concluded that:
…the agreement between the operators and drivers in each of the present cases was one of bailment28 and not of employment. Although no single factor is determinative…
First, the driver pays the owner, and not the other way around…While the fixed payment method more clearly is marked as a bailment than the gross percentage of meter method, I do not think that ultimately a distinction should be drawn between them…
Second, when there is an agreement in writing, or implied by legislation…that agreement is one of bailment [and] where it is not suggested that the label is a sham, it should be given effect to.
Third, although some control is exercised by the operators over the drivers [it] is only such as to ensure compliance with legislation concerning taxis [and] control exercised as well by network operators…is only such as is necessary for the running of the network…Drivers are free to obtain work as they wish…often utilising mobile phones [and] will pick passengers up from the streets, or from ranks. There is no compulsion…to use the network, although clearly it will be in the interests of drivers to do so.
Drivers provide their own change and directories, pay for the petrol consumed and [for] keeping the cars clean…In some places drivers pay additional insurance premiums; in all States, subject to insurance, drivers are required to pay for damage to vehicles which the driver causes…In the event of a breakdown, the drivers are entitled to some reimbursement of amounts which they pay for the hire…
It is only in NSW that legislation requires payment of long service leave, sick pay and workers' compensation premiums [but in] many…determinations…it has been accepted that the relationship is one of bailment…In all States stamp duty is exigible on the basis that there is a bailment relationship…
I would, accordingly, conclude that the relationships…between all applicant operators and their drivers are…of bailment [and that] each of the drivers with which the present applications are concerned carries on his or her own business rather than being a person engaged as an employee in the business of the applicants.
Which left the question of whether payments were 'wholly or principally for the labour' of the drivers. Firstly, in fact the drivers paid the operators. Apart from that, 'the drivers make payment to the operators for the right to bail the cabs and ply them in their own business. They are neither employees in the ordinary sense, nor do they receive payments under contracts for their labour' (Aust FC 1997).
These five cases had the common characteristic of a more-or-less continuing relationship between the contractors, or many of them, and the principals, which is not why they were selected but has much to do with why they were subject to dispute. To return to problems of classification, if we imagine a group of people discussing the terms of employment in their several jobs, they would seldom have difficulty in defining themselves as self-employed or wage and salary workers, although what they communicated to each other would not correspond with ABS definitions. The status of some who identified themselves as self- employed might be questioned, and particularly when they worked under contract of some duration for one principal. In clarifying their situation they would probably refer to much the same indicia as the courts: that they were organised as a business, had invested and were risking capital, were not simply paid for hours spent in a pre-existing job but had considerable autonomy, and so on. The High Court remarked in Stevens v Brodribb that 'Brodribb and the men, including Stevens and Gray, regarded their relationship as one of independent contract, not one of employment.' Our hypothetical group would concede that self-employment did not necessarily involve contracting with several principals in any short period.
All self-employed1A are independent contractors, and the subcategory comprising those relatively closely integrated with a principal's business—call it 'self-employed1Aα'—has no satisfactory name. 'Dependent contractor' is pejorative and refers to something rather different. Self-employed1Aα is a recognisable but not clearly-defined category, and identification of a person as belonging to it could sometimes depend on context; that is, on comparison with other people of the same occupation or in the same workplace. Call the equivalent category as distinguished by the common law 'self-employed2α'. Stepwise development of common law can lead into vacuity, incoherence, absurdity and inequity, sometimes requiring legislative correction,29 but self-employed 2α would seem to correspond closely to self-employed1Aα. Similar or overlapping entities defined by legislation or deemed to exist under authority conferred by statute—the 1985 ruling's proposal to treat a person, although 'perhaps not an employee as such', as an employee—might be called collectively 'self-employedX'. Finally, sham arrangements intended to misrepresent an employee as self-employed1A—Clarke v Custom Security Services—might be called 'self-employedZ'.
|Forms of self-employment: a summary|
|Self-employed 1||Entrepreneurs who supply their own working capital for production of goods or services and depend on value added by personal effort. May have employees.|
|Self-employed 1A||Independent contractors who supply goods or services for prices negotiated with series of clients.|
|Self-employed 1Α....||Contractors in close and substantial, but not necessarily exclusive, relationship with one client. Approximates to the undefined or ill-defined 'dependent self-employed contractor', and includes many persons engaged and paid by employment agencies.|
|Self-employed 1B||Proprietors of businesses retailing goods or services to individual members of public at fixed or advertised prices. May conduct business under franchise.|
|Self-employed 2||Reflex of self-employed 1 in common law, and indirectly in statutory provisions.|
|Self-employed 2....||Reflex of self-employed1A• in common law.|
|Self-employed 3||The ABS category corresponding to self-employed 1 , but only approximately.|
|Persons having some characteristics of self-employed 1 treated under statutory authority as though employees, although not necessarily so designated. Likely to affect many self-employed 1Α.... as well as self-employed Z .|
|Employee under contract of employment misrepresented by self or employer as self-employment.|
The issues outlined by the then Treasurer in 1995 were finally addressed in 2000 as part of extensive tax reforms. Some were also touched on in the ABS forms of employment survey of 1998 (ABS 6359.0), which found that 37 per cent of owner-managers undertook contract work, of whom 48 per cent had one contract. Fifteen per cent of owner-managers were 'in some way dependent' in that a contract prevented subcontracting, or working for multiple clients or, most commonly, that the client had control over working procedures. Rates of dependence were highest in transport and storage, and construction.
Announcing the New Tax System (Alienated Personal Services Income) Bill, which became law in June 2000, the Treasurer explained (Department of the Treasury 2000) that 'earnings from work will be treated the same way for all taxpayers, regardless of whether the income is earned through a company or other entity or…directly by the individual. The measures will not affect genuine independent contractors [and] will not deem an individual to be an employee for the purposes of other legislation or industrial award. The legal status of the entity is not affected in any way.'
It was further explained (ATO 2000) that whereas 'Equity issues can arise when individual contractors or their personal services entities can claim higher deductions than employees providing the same or similar services,' 'Individual contractors affected by the measure [will] generally have the same deductions that would be available to…an employee.' Income was 'personal services income if the client is mainly paying for your personal skills or effort [rather than] the supply or sale of goods'. Income from the production of 'a result, other than services on an hourly rate…is still personal services income, if the result is produced mainly from…personal skills or effort…'
Those to whom the Treasurer was apparently referring when he spoke of 'genuine independent contractors' might be accepted as conducting a 'personal services business', and therefore entitled to claim certain deductions from gross earnings, where less than 80 per cent of their personal services income was from one client in the period of the assessment and either the income was received 'as a direct result of…offers to the public' from at least two clients unrelated to the contractor or each other or the contractor had maintained premises specifically for the purposes of the business or persons or unrelated entities engaged by the contractor had contributed at least 20 per cent of the work required to generate the income.
Where 80 per cent or more of income was from one client, application might be made to the Commissioner of Taxation, who could consider whether failure to satisfy the tests had been temporary and, further, could apply the familiar criteria of whether the work had been for producing a result, whether the contractor was required to supply the necessary plant, equipment or tools, and whether he was liable for the cost of rectifying any defect.
The approach taken was somewhat analogous to that of the AIRC on casual employment, in that it was intended to regulate the consequences of particular forms of employment—in this case for tax liability—without attempting positive definition of those forms. In doubtful cases the Commissioner of Taxation might consider the specified subsidiary criteria, and then only to satisfy himself. Once he had taken reasonable steps to do so, the decision would stand. In the table above this category has been designated 'self-employedX'.
When tax returns came due for lodgement in 2001, protest was raised by and on behalf of people affected by the 80 per cent limit, who complained of the work involved in applying for a determination, the unreasonableness of the limit in their cases, or both. The Treasurer announced that his Government would introduce amendments to provide for self-assessment, subject to audit, and emphasised the criteria of whether the contractors derived the income from producing a result, supplied their own plant, equipment and tools of trade, if required, and were liable for rectification. Also, 'The measures do not apply at all to owner-operator truck drivers or couriers who derive income from their truck or vehicle rather than labour or skills' (Department of the Treasury 2001).
- 6.1 Indications of changing practices
- 6.2 Organisational change and contracting
- 6.3 Concluding remarks
Notwithstanding inadequate statistics and possibly deceptive appearances, evidence that contracts of employment were both changing and diversifying was better than anecdotal. Nor were those events confined to Australia. For example, part-time, fixed-term and self-employment increased by a total of 15 per cent in European Union countries between 1985 and 1995, despite falls in the developing economies of Greece and Portugal (De Grip, Hoevenberg & Willems 1997). International resemblances included acknowledgment in the 1995 report of the United States Bureau of Labor Statistics survey of 'contingent and alternative' employment of the possibility that some workers appearing as self-employed might be 'individuals who were "converted" to independent contractors to avoid legal requirements' (United States Department of Labor 1995).
Conversion motivated by cost-cutting was described in a survey of self-employed editors, proofreaders and indexers in British book publishing (Stanworth & Stanworth 1995). That industry had undergone structural change in response to various factors, including technological developments, was putting out more products with shorter print runs and sales lives, and was making 'increasing use of subcontractors and self-employed home-based workers.' The study found that many were regular employees before being made redundant, and its authors concluded that:
…freelancers in publishing are essentially casualised employees, rather than independent self-employed. They have few of the advantages of being employed but neither do they enjoy the accepted advantages of being self-employed. In objective terms, they are 'disguised wage labour', with very limited autonomy and freedom…they do not enjoy the legislative safeguards which accrue to employees [and they] lack the structural solidarity necessary to secure [National Union of Journalists] rates of pay. [T]he risks of obtaining a constant income-flow are moved from the publishing house onto the individual.
In 1994 Wooden and VandenHeuvel, commissioned by the ATO and the Department of Industrial Relations, conducted a sample survey of the use of contractors in workplaces employing 100 or more people. Respondents were asked to distinguish independent contractors, including homeworkers, from employees of contractors and agency workers. It appeared that in the survey month 70 per cent of workplaces had used self-employed contractors, 59 per cent employees of contractors, and 58 per cent agency workers. Thirty-two per cent had used all three, and the categories had accounted for 10 per cent of total employment. Principal reasons stated for the use of contractors were 'to access specialised skills not available in-house…to cope with periods of peak demand…and to deal with one-off tasks.' A low rate of response to the mailed questionnaires, 32 per cent, could have introduced bias.
The authors noted that their figures, as compared with the preceding AWIRS 90, 'taken at face value…point to a marked increase in the use of contractors.' Respondents had reported a smaller but substantial increase in the same period, and, 'To summarise, all indicators point to a marked increase in the importance of contractors in the Australian workforce during the last five years. The data, however, are not of sufficient quality to permit…an accurate assessment of the magnitude of this increase' (Wooden & VandenHeuvel 1996).
At best estimate, most self-employed contractors were probably 'dependent' at 28 per cent of workplaces and probably not at 41 per cent. However, the authors questioned the continuing relevance of the distinction between employee and non-employee.
The subsequent AWIRS 95, found that about the same proportion of workplaces as in 1990 used contractors or their employees, agency workers or outworkers, but they had increased from 4.7 to 6.5 per cent of all workers in the main sample, and that agency workers had been used at 21 per cent of workplaces compared with 14 per cent in 1990. The report explained that 'the…employment status of contractors depends on whether they have entered into "a contract for service" (independent contractor) or "a contract of service" (employee),' but warned, 'Although the AWIRS questionnaire specifies "a contract for service", the technical legal distinction may not have influenced all managers' responses' (Morehead et al., 1997). Indeed; and the uncertainty may have been aggravated by failure to distinguish within the category, 'contractors and their employees', the 'workers provided by contract firms' of the United States' survey of contingent and alternative employment.30 Wooden and VandenHeuvel had mentioned that 'employees of contractors…were most likely to have been used to provide cleaning services [and] equipment and building maintenance'.
One distinction made for the first time in the employee survey included in AWIRS 95 was between 'permanent', 'casual' and 'fixed-term' employment, which was reported by 9 per cent. These last were evidently not the temporary workers placed and paid by an agency. Although no statistical series exists on fixed-term contracts of service, they appear to have become more common in the 1990s. Their widespread use by tertiary educational institutions in a period of expanding numbers and budgetary constraints led to prolonged proceedings before the Industrial Relations Commission, an interim award in 1996 and a final decision by the full bench of the Commission in May 1998 (AIRC 1998). As well as general grievances related to low status and insecurity, issues had included entitlements that normally accrued with length of service, such as redundancy payments in situations where employment might be terminated simply by expiration of the latest of a series of contracts. The Commission extended entitlements and defined the circumstances in which fixed-term contracts might henceforth be used: for example, for a specific task or project, for conduct of research, and to provide temporary replacement of another employee.
Attention has been given to the interrelationships between organisational and institutional change and terms and conditions of employment. In 1997 Walsh, referring to 'a widely held view…that employers are increasingly segmenting their workforces along the lines of a core and periphery in the pursuit of greater efficiency and flexibility in production,' reported a comparative study of developments in the internal labour markets of two big retail banks, one in Australia and one in the United Kingdom, and in the public postal services of the two countries. 'Both industries have been traditionally associated with well-established internal labour markets.' Now the two banks, 'Ausbank' and 'UKbank':
had moved away from…lifetime career progression, seniority-based promotion and general training…Ausbank…now filters its employees into four separate career streams… Managerial positions in the two organisations had largely become the preserve of graduate recruits and were significantly professionalised… The…effects…had been compounded by the deployment of computerised technologies [with] specialised computer data centres… Branches had become outlets for the marketing and sale of financial products…to either consumer or corporate customers… Both had increased the numbers of part-time staff within the branch network, particularly during peak periods [and] there has also been some experimentation with extended opening hours…
UKbank had shed about 4 000 clerical and management posts [and] Ausbank around 1 000 staff [in its] management reorganisation and…rationalisation of staff in non-core banking activities… Clearly, however, neither…appeared to be 'casualising' the workforce… The stated aim of both banks was to maintain a predominantly permanent workforce, albeit with increased number of part-time employees (Walsh 1997).
Recruitment and career paths had changed less in the postal services. However, in promoting staff the Royal Mail now placed more emphasis on merit and less on seniority 'largely because [it had] buttressed the position of long-serving (usually male) workers and served to undermine the job prospects of female workers with shorter tenure.' Both services were making more use of part-time workers. The respective unions had delayed some changes, but '[the] relative stability may reflect the fact that key aspects of postal service and delivery are highly labour intensive and not readily amenable to fundamental technological transformation.'
Organisations respond to currents of theory and fashion as well as to technological innovation, functional change and economic environment, and the responses may have unintended consequences requiring correction. The idea that efficiency could be improved by the contracting out of productive and organisational maintenance functions previously performed by employees can be said to have become fashionable. A small study of sweeping changes in administration of Melbourne's water supply and sewerage system reported views, not necessarily unprejudiced but informed, that enthusiasm had gone too far.
The former Melbourne and Metropolitan Board of Works had been replaced by five 'business units' and staff reduced from 9 000 to fewer than 3 000 in 10 years. Union representatives and senior managers were interviewed on the effects. Managers believed that contracting out had produced savings, one explaining that not all specialised skills were needed continuously. However, most respondents, including some managers, thought important skills had been lost from the organisation, including skills needed to train and supervise contractors, and that it had become dependent on a few contractors with the required specialised competence (Bottomley 1996). Whatever the facts of the particular case, it will generally be true that, to get its money's worth from the contracting out of work related to its central functions, an organisation must put commensurate resources, including skills, into the management of contracts.
The Victorian State government elected in 1992 went further than its contemporaries in selling some instrumentalities, 'corporatising' others, contracting out of functions previously performed by the remainder, and changing the terms of employment in departments of government reduced from 48 700 staff in 1992 to 23 000 in 1998. It legislated to give departmental heads, themselves employed on 'standard executive contracts', 'similar powers to private sector employers to employ and assign people as needed'. Whereas, 'Traditionally…people were recruited at base grade level and their advancement was often related to their seniority or length of service…now…a career depends upon individual performance [and] department heads are giving priority to performance management systems that link achievement of outputs, development opportunities and rewards' (VOPE 1998).31 Details varied between departments, but included financial incentives to sign individual Australian Workplace Agreements (AWAs) and, frequently, fixed terms. In one department as of 1998 existing staff could remain under former arrangements but most had chosen to sign AWAs, and signature was required for all new employees and all persons promoted. Terms of employment would be reviewed in 2000. In another, said to have been using three-month rolling contracts, persons recruited were paid more if they signed AWAs.
In the United States, between 1972 and 1993, employment in the 'business services industry', engineering and architectural services, and accounting, auditing and bookkeeping had grown much faster than total employment. A study prompted by 'growing interest in…market- mediated work arrangements: contracting out for business support services, subcontracting, and the use of temporary employees,' used data collected in supplements to the monthly Industry Wage Surveys—of establishments employing labour—from June 1986 to September 1987. Respondents were asked what proportions of specified services were secured under contract in 1979, 1983 and currently. Subsequent analysis related propensity to contract those services out to size of establishment, wage levels—allowing for the level of skills required in particular occupations—union involvement, seasonal and cyclical variations in employment in the industry, and geographical location.
In theory, contracting out rather than having work performed in-house might appeal to an employer as 'a way for high-wage organisations to take advantage of low market wage rates for certain types of low-skill work,' or 'the desire to smooth the work load of the regular work force may encourage organisations to contract out peak period tasks, while…discouraging them from contracting out tasks that could…keep the regular work force occupied during | off-peak periods.' Or, on the other hand, the decision could reflect 'the existence of scale economies accruing to the providers of particular services.' It might not be economical for the firm to invest in the necessary equipment or skills (Abraham & Taylor 1996).32
Conventional but well-designed econometric analysis of the data led to the conclusion that 'observed contracting behavior seems to reflect a mixture of all three of [those] influences', and supported speculations strongly reminiscent of notions of the labour market—here the internal labour market—as a social institution:
Contracting for janitorial services—the only low-skill activity included in the set of services we have studied—appears to be motivated primarily by a desire to reduce hourly labor costs. The major correlates of contracting out for machine maintenance, engineering, and drafting, accounting, and computer services…are consistent with the existence of important economies of scale in the provision of these services. Establishments in more cyclical industries are more likely to contract out for accounting services [but] appear to be less likely to contract out for janitorial and machine maintenance services, suggesting that [they] may be discouraged from using outside contractors by the desire to reserve certain tasks to be performed by the regular workforce during off-peak periods.
[E]vidence on which employers use outside contractors is of interest for the light it sheds on the underpinnings of the employment relationship. Our findings concerning the relationship between an establishment's wage level and its contracting behavior corroborates other evidence suggesting that internal equity considerations constrain the relative wages paid to employees within a single internal labor market. [Otherwise] there would be no reason to expect any difference in the contracting behavior of high-wage and low-wage establishments. [T]hat high-wage establishments are more likely to contract out for janitorial services suggests that [they] cannot readily pay low wages to janitors on their own payrolls. Similarly, the finding that low-wage establishments are more likely to contract out for certain…high-skill services suggests that [they] cannot easily pay high wages to workers in selected occupational groups.
[T]he relationship between the volatility of the demand faced by the establishments and the propensity to contract reinforces the…view of labor as a quasi-fixed…factor of production. [E]stablishments facing more volatile demand are less likely to contract out for janitorial and machine maintenance services, and we infer that…more of this work is performed in-house during slow periods. Such behavior is indicative of the value that employers attach to maintaining stable relationships with their regular employees.
Contractual arrangements can also be the means of transmission and development of new technology. Analysis of input/output statistics from the latter part of the 1980s for Italy, Germany, France and the United Kingdom indicated that:
Communication and business service industries are the new strategic sector of the emerging…economy. Their products are key intermediary inputs to the rest of the economy. A small increase in their use makes it possible to increase significantly the output levels… [T]he competitiveness and innovative capacity of the European economy is increasingly [dependent on] the new information and communication technologies and, consequently, the…knowledge-intensive business service sector (Antonelli 1998).
Studies of substitution of external for internal contracts illustrate the ambiguity of aggregate figures on trends in employment by industry. The ABS assigns respondents to industrial divisions and subdivisions according to the activity of the establishment that employs them, not their own occupations. If, over time, an establishment producing and distributing goods were to contract out for, say, transport and technical services it would contribute to apparent growth in those sectors and apparent relative decline of its principal activity, even if the volume of services were unchanged.33
Information collected by the ABS gave a reasonably clear account of the changing demography of the labour force, and the employment status and earnings of its members, which was its principal purpose. However, it omitted much that was increasingly of interest and importance to public policy.
This study proceeded from the idea that what happened to Australian employment in mid- 1974 was not an interruption of normality but marked both the end of the period of growth dated approximately from the White Paper of May 1945 (Australia 1945, Full employment in Australia) and also the beginning of something quite different. It has attempted to trace and, where possible, explain trends in the labour market over the succeeding quarter-century.
Perhaps the most basic statistics are those presented in Figures 4 and 5, covering the periods 1972-2000 and 1975-2000 respectively. Rates of unemployment rose abruptly in 1974 and never fell back to what was regarded as a satisfactory level, but the material summarised in Figure 5 shows that total labour supply, calculated as hours worked per head of total population aged 15 years and above, barely changed. What did change was who supplied the labour and in what kinds of jobs, and that the work they did was much more productive at the end than at the beginning of the period. Those changes are summarised in Figure 4, on the distribution of jobs between males and females, and full-time and part-time employment. Here the constant feature over time was the rate of change, hardly disturbed by the fluctuations of the business cycle. However, that development could not continue indefinitely.
The future was unpredictable as always, but by the year 2001 it seemed possible that the labour market was approaching an equilibrium in a form unprecedented historically and, although not immune to recession, likely to persist until new forces for change asserted themselves. One prediction that could be made with confidence was that there would be no return to the conditions of, say, 1960. Not that nothing of value had been lost, or all interests advanced, or social justice established. As understood by Schumpeter, economic evolution is destructive as well as creative, and not to be confused with cumulative progress.
It seemed that female employment and labour supply would stay much higher than in the past, and male employment somewhat lower. Rates for older males might recover significantly, if hardly to past levels, and women were likely to make further gains. Demand could be influenced by aging of the population. Employment ratios were still rising for women with children and older single women, and the continuing rise in female participation in tertiary education, with higher rates than for males, would be reflected in earning capacity and labour supply. Segmentation of the labour force by sex would persist, but developments in technology and organisation would probably open areas of opportunity for women in industries previously dominated by men.
Neither the nature nor the extent of change in systems of production, forms of employment and contractual arrangements during the 1970s, 80s and 90s can be determined from the available statistics. Various organisational and institutional changes were intended to overcome impediments to economical and productive use of available human and material resources, and to facilitate their reallocation. They had some success, but in the process established practices, expectations and interests were threatened. Some welcomed 'flexibility' and consequent competitiveness; others denounced 'globalisation' and 'casualisation'.
Where the past was taken as a standard of judgment it may have been idealised and in any case was beyond recall. On the question of insecurity, the statistics provide no clear evidence of increasing rates of job change, whether voluntary or involuntary, and although literally permanent employment may have become rare it could never have been common. Coverage of formal entitlements related to employment spread, and apparently they were distributed more evenly. Wider opportunity may have compensated, to an unknown extent, for any loss of security.
Lack of information over time on literally casual employment—'casual1'—its uses, and the circumstances of those dependent on it, is more to be regretted than lack of information on its opposite, literally permanent employment. All that can be said is that it continued to exist and was of significant economic importance. The ABS category—'casual3'—defined by lack of formal entitlements and intended as a rough approximation to the 'casual2' award provisions was easy to enumerate but supplied little information about casual2 and much less about casual1.
The complex interactions between economic processes, social change, public policy and the labour market were beyond the scope of this study. Evidently, social and economic factors, including technical innovations, were primary and the contribution of policy was to facilitate and ameliorate rather than initiate. Some of the negative and wholly unintended effects of change, such as higher rates of unemployment and non-employment, were mitigated by social security provisions designed for other circumstances but adaptable to the new conditions, although with negative effects of their own.
Many unemployed, males in particular, were led to redefine themselves as unemployable and retired. At the same time, transfer payments may have contributed to the formation of a new ancillary labour force made up of persons mainly committed to some other activity or whose principal income was unearned. The clearest example was the substantial contribution of students to casual, part-time and temporary employment. Conditions of eligibility for statutory payments were modified specifically to encourage those types of work, often on the stated but unproved and questionable assumption that individuals, once employed, would increase their labour supply and earnings. Single mothers could, if they wished, retain eligibility for reduced payments while working full time but in the 1990s, as indicated by Figure 16, rates of part- time employment rose but full-time employment fell, suggesting that many optimised rather than maximised.
Apart from the income security provisions, much of the growth in community services, and employment in them, was also publicly funded. Meanwhile, market incomes rose. The net result was that, despite the intervening years of low growth rates and high unemployment, and although as compared say with 1968 relative inequalities may not have been reduced, many fewer people in the more prosperous society of 2000 had to choose between any work they could get, however unrewarding, and severe deprivation.
The causes of change probably do include innovations in information technology and its applications. We have seen indications of its impact on banking. The Federal Court's decision in De Luxe Red & Yellow Cabs v Commissioner of Taxation mentioned, in discussing the extent to which drivers worked under direction, that 'approximately 25 per cent of drivers now use mobile phones, which they provide themselves, to obtain work.' By itself, the mobile telephone must have had a profound impact in freeing not only self-employed but many other workers from close dependence on bases and support staff.
Continued use of the terms 'standard' and 'non-standard', or 'typical' and 'atypical' employment, and of the categories they refer to, is questionable. The terms have connotations of superiority and inferiority or normality and abnormality, and the categories imply simple dichotomy or polarity, whereas each of the types discussed here, often shading into each other, will contain good and bad jobs, satisfied and dissatisfied workers. Each changes over time, new forms emerge, and none is defined adequately by reference to any fixed standard.
1. These and other (tentative) conclusions on stabilisation and recovery are based on calculation of polynomial trend lines for the particular series, which has the effect of smoothing out variations attributable mainly to the business cycle.
4. By 'contemporaneous' changes, Borland means unanticipated changes in the variables that might have influenced retirement intentions. For a review of Australian studies of male participation rates see Norris and Wooden (EPAC, 1996a, 'Labour supply). The apparent reversal of the downward trend for men aged 50 to 64, mentioned by those authors, seems to have been temporary; stabilisation, perhaps. Recovery does appear to have been occurring for men aged 60 to 64.
5. 'In Australia between 1983 and 1987 there was an epidemic of upper limb regional pain which was concentrated… in occupations which involved either repetitive movement or… constrained postures… (e.g., process workers and keyboard operators). [It had been] observed among process operators in the late 1960s and early 1970s… ' (The introduction of word processing was itself a source of anxiety to staff trained and skilled as typists.)
6. Holders of franchises—'franchisees'—are normally classifiable as self-employed owner-managers. They pay the franchisor fees for assistance in setting up the business, an advertising levy and a percentage of turnover as royalties (information supplied by Franchise Association of Australia.)
8. Not everybody accepted the United Bureau of Labor Statistics definitions. For example, one report reviewed in Rosenburg and Lapidus (1999), 'Contingent and non-standard work in the United States' added 'regular part- time work and all self-employment'.
9. Although Barnes et al.. (1999) in Productivity and the structure of employment, published by the Productivity Commission (the successor body to EPAC notes the high degree of overlap of the part-time and casual categories; its discussion treats them as though somehow contrasted.
11. Burgess and Strachan (1999) say more bluntly, 'Trade unions, largely by indifference or hostility to non-standard employment, allowed [it] to flourish and thus indirectly undermined standard employment conditions'.
12. When asked if he employed casuals, the manager of one of a chain of retail stores whose business fluctuated seasonally said it did, by approaching people who had worked for them previously when help was neededæthat is, the employment was casual1A. Asked about pay and conditions, he said there were no paid leave entitlements and pay was the hourly rate of the (full-time) award wage—but, 'between ourselves, it was in cash'.
13. Information supplied by Kate Boundy of Drake, who was responsible for placements in office work. In 1983 Macken, then on the bench of the New South Wales Industrial Commission, said that 'The concept of the temporary work agency has not been confronted by industrial tribunals [but is] one of the largest problems with which all of us will have to grapple.' (Macken 1984.)
15. The statement that 'The basic definition of a casual employee is to be found in the common law, where casual employees…are seen as employees who are used "as and when required", with each engagement being…a separate engagement' (Burgess & Campbell 1998, 'Casual employment in Australia… ') is of doubtful accuracy. The judicial registrar whose decision came under review in Reed and Blue Line Cruises had 'invited Counsel for the parties to refer to me decided cases on the question of what is casual employment and there are very few…of any assistance. [They] indicate that the term "casual employment" is a colloquial expression and that the Court is required to look in any particular case at what the arrangement was that the parties made between themselves.' (1996b, Reed and Blue Line Cruises.)
18. An article, 'The jobless and the unemployed', in the ABS Labour Force Bulletin (6203.0) for May 1997, says, 'Each month, the ABS asks persons who usually work part time whether they would like to work full time.' As confirmed on enquiry, that statement was incorrect. Respondents were asked if they would prefer longer hours and, separately, if they had been actively seeking full-time work.
19. Wooden (1998), examined statistics on job mobility and duration from 1975 to 1998 and concluded that, 'Despite widespread opinions to the contrary, job stability in Australia is not, on average, declining. Indeed, for women the reverse is true, with many more women employed in long-term jobs today than two decades earlier'. However, insecurity could have increased in the sense that new jobs had become harder to find. Norris (1993), had reported similar conclusions.
21. Information supplied by Drake Personnel and National Association of Personnel Consultants. Discrepancies with ABS figures on methods of job-finding could be caused by respondents' reporting themselves, technically correctly, as having 'had no prior knowledge that [a] job was available [and] contacted likely employers', where likely employers included private agencies.
23. Smith recognised that market transactions involved services as well as goods, but proposed no general category of self-employment to include provision of both. Essentially, goods could be resold but services could not: The labor of some of the most respectable orders in the society is…unproductive of any value, and does not fix or realise itself in any permanent subject, or vendible commodity… The labor of…the sovereign…servants of the public…churchmen, lawyers, physicians, men of letters of all kinds [as well as] players, buffoons, musicians, opera singers, opera dancers, &c …has a certain value, regulated by the very same principles [as] every other sort of labor [but] produces nothing which could afterwards purchase or procure an equal quantity of labor… The work of all of them perishes in the very instant of its production. (Smith, The Wealth of Nations, Bk II, Ch III)
25. For further discussion see Romeyn (1992), especially pp. 27-39. Creighton (1993) goes on to list the legislative expedients of simply using the words and 'leaving it to the courts to resolve the matter as best they can', adopting circular definitions and 'again passing the matter back to the courts and the common law', arbitrarily deeming 'certain groups of workers to be "employees"' and, on the contrary, defining 'employee' in terms that 'exclude workers who would otherwise be included'.
26. 'When respondents…indicate that they are an employer, they are asked if their business is a limited liability company. If they respond in the affirmative…employment status is recoded to wage and salary earner. According to theABS, 39 per cent of those who reported employer status in the May 1994 Labour Force Survey were recoded to wage and salary earner status for this reason' (VandenHeuvel & Wooden 1995).
27. For background information on the survey of employment and earnings, and expected differences between that and the labor force survey, ABS information papers New statistical series: Employment, average weekly earnings, job vacancies and overtime, 6256.0, June 1984, and Comparison of employment estimates from the labour force survey and the survey of employment and earnings, 6263.0, July 1985.
29. In Stevens v Brodribb the High Court seems to have regarded the 'organisation test' precedents as incoherent if not vacuous, and one stimulus for the British Workmen's Compensation Act 1897, the prototype for Australian legislation was that the common law had come to hold employers of injured workers liable for damages only if direct and personal negligence could be proved, and the claim was untainted by contributory negligence, and even that entry into an occupation implied acceptance of any risks inherent in the particular work, and that wages paid could be assumed to include an element of compensation for such risks. (Hanes 1968, The First British Workmen's Compensation Act, 1897)
30. At least, inclusion of workers provided by contract firms seems to have been intended: Contractors (and their employees)…worked on a contract-for-service basis at the workplace. Contractors are usually engaged for a specific task such as a construction job, the introduction of a new computer system or the cleaning of an office building. (Morehead et al. 1997, p. 46.)
32. 'The "business services industry" comprises advertising, credit reporting and collection, mailing, reproduction and stenography, services to buildings, personnel supply services, computer and data processing services, and miscellaneous business services' (Abraham & Taylor 1996). In the 21-year period, employment in that group had grown by 288 per cent, and total employment in the United States' non-farm sector by 50 per cent.
33. Information supplied by ABS is that employed respondents to the LFS are asked to name the industry they work in, and for the name and address of the employer, which is then checked if possible with the register mentioned above.
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