RDW 2015
TITLE: Non-Standard Work in the Public Service: The New Normal?
As a result of the most recent developments in budget constraints due to public service reform and changes in human resource management in public administrations, a growing number of tasks have been performed through non-standard working arrangements. These have taken the form of various types of short-term employment including temporary agency work, as well as outsourcing and subcontracting, which are not associated with employment relationships. Such increased use of atypical work arrangements for civil service work has changed the landscape of employment relationships in the public administration and reduced collective bargaining coverage.
Already in 1997, Finland showed a trend to hire public servants in atypical conditions, when 23% of the workers were part-timers. The US federal government increased its temporary agency staff by 68% between 1995 and 2005, despite a relatively stable total employment. The European Working Conditions Survey (2010) reported that around20 per cent of employment contracts in the EU27 were not indefinite. This trend has led to labour conflicts like in Israel, were the Histadrut union organized large solidarity strikes in 2011-12 and obtained recognition for the direct employment of contract workers who performed core public services.
The Committee of Experts on the Application of Conventions and Recommendations (CEACR) has stated that Convention No. 151 covers all public servants regardless of contract status. The 2013 report of the CEACR to the ILC on the General Survey on Conventions No. 151 and 154 expressed concerns over the growth of non-standard contracts in the public services. Shortly afterwards, the President of the Industrial Court of Trinidad and Tobago cited this report and called on political authorities to address the problem, which she called “privatising the public service”.
The conclusions of the Meeting of Experts on Non-standard forms of Employment (Geneva, February 2015) included a commitment to document trends as well as to analyse the effects of non-standard forms ofemployment on workers, firms, public services, the labour market and economicperformance;improve understanding of national regulatory practices anddevelopments with respect to non-standard forms of employment; andgain a betterunderstanding, including through historical analyses, of the interplay between theevolution of different forms of non-standard employment, development of newtechnologies and models of production, transport and public services, in order todiscern the larger implications for equality, social inclusion and the future of work. The Report of the Committee for the RecurrentDiscussion on Social Protection (LabourProtection) of the ILC last June called attention to these conclusions. This research fits this mandate.
Theresearch covers seven country studies: Brazil, Canada, Germany, India, Japan, South Africa and the United Kingdom. In each country, the authors examined the incidence of non-standard work in the government, issues related to job quality and security, the impact on the delivery of public services, trade union density and collective bargaining coverage, the role that other forms of social dialogue have played, and possible actions to address the challenges identified. The papers on India and Japan reviewed particular groups of workers, namely state-owned enterprises and women in local government. A synthesis paper was drafted by Professor Malcolm Sergeant.
There is very little literature on this subject, and even less comparative literature. The specific scope of research on the public sector is very recent, dating from 2005, when Professors Thompson and Mastracci anticipated the rise in the use of these contracts in the US as a result of increasing pressures to reduce costs, replicating similar efforts in the private sector. Fast-forward to 2014, when Australian Professor Sasha Holley found that contracting-out government services in New South Wales has changed the employmentrelationship, since workers’ labour standards are now regulated throughthe combination of traditional labour law mechanisms and lesser understood contractlaw mechanisms.[1] Enrique Marín discussed this phenomenon in 2013 as follows:
Public administrations in some States are being filled up with staff who are artificially put on fees-based contracts, as though they were self-employed, or who are sent into the public services by private firms which are thus performing tasks that are inherently those of the administration, or who come from bogus cooperatives – the very ones specifically singled out by an international labour Recommendation.[2]
The general increase in outsourcing appears to obey a desire to reduce the size of the state sector. The authors conclude that a growing number of tasks have been performed through non-standard working arrangements as a result of the most recent developments in budget constraints due to public service reform and changes in human resource management in public administrations. These arrangements have taken the form of various types of short-term employment including temporary agency work, as well as outsourcing and subcontracting, which are not associated with employment relationships. Such increased use of atypical work arrangements for civil service work has changed the landscape of employment relationships in the public administration and reduced collective bargaining coverage.
The work of the public sector is being outsourced to the private sector and to quasi-governmental institutions operating at arm’s length from the policy makers. Outsourcing is open to abuse and can be a means of significantly reducing the role of trade unions and, perhaps, reducing levels of employment protection and levels of employee benefits compared to workers remaining in the public administration. It also can mean the reduction of wages which become depressed in competitive tendering situations.
Outsourcing often takes workers out of the scope of collective agreements and trade union representation, in private sector non-unionised locations. Where unions are not involved in the representation of non-standard workers, there are few alternatives for their protection offered by other forms of social dialogue. The current legal system prevalent in most countries is insufficient for the protection of casual and externalised workers.
According to the authors of the India paper, non-standard work arrangements typically depart from standard employment in respects of the diffused employer identity, employer control, continuity of employment, employment protections and social security and are more likely to be associated with bad job characteristics such as low earnings, lack of health and pension benefits, lack of promotion opportunities, low quality work, no access to welfare benefits, limited access to training opportunities, low or no trade union representation, low bargaining power, lack of labour market alternatives and low labour law coverage typical of secondary or peripheral segments of labour markets. Each country has different dynamics, as the following examples illustrate.
In Brazil, the federal and state public administrations cannot hire outside three formal arrangements: statutory, contractual or temporary. However, the 1988 Federal Constitution authorized the subcontract of services by the public administration, and after 1995 the number of subcontracted workers increased while the size of the formal public service decreased. In the federal public administration, the number of new public servants decreased by 9,000 in 1997; 7,700 in 1998; 2,100 in 1999; and by 1,500 in 2000. On the other hand, in 2000, approximately 8,900 outsourced workers were allocated in high position jobs in the Federal public administration, and the number of illegally outsourced workers in organs of the federal public administration reached a total of 28,567 in 2009.
In the Canadian federal structure there is a three-tier peripheral work force delivering public services. Part-time, contract and seasonal workers whose hours and weeks of work in a weekly or an annual cycle is less than full-time, full year employment, who are covered by a collective agreement and they receive pro-rated benefits and have access to the grievance system through their union. Casual or short-term employees, in turn, are generally not covered by a collective agreement and may not receive pro-rated benefits comparable to the first-tier non-standard workforce. Finally, workers hired through temporary help agencies are not considered to be government employees.
In South Africa, the dominant trend has been externalisation rather than casualization. Yet data about the numbers such contractors employed are not readily available, for example in municipal waste collection, because there is no legal requirement that local authorities monitor the number of workers they employ indirectly.The Expanded Public Works Programme (EPWP) provides employment for between four and six months. Most of which are women (51% in infrastructure developmentand 85% in the so-called social sector). The Community Works Programme (CWP), a new component of the EPWP, provides continuous part-time employment through “implementing agents” for the overall management of the project, and “local implementing agents”, NGOs which provide indirect employment.
In the Japanese local governments, the number of non-regular employees has increased 32% from 2005 to 2012, and now one out of three local public employees is a non-regular employee. Three quarters of the increase is female staff, and now a quarter of the total local public employees are non-regular female public employees. Their annual earnings are between a quarter and one-third of that of regular employees, generating a striking gap between them. This pay gap is more related with the gap between regular and non-regular employment than the gap between men and women. The gender-based pay gap between regular and non-standard employees is larger in the local public service than in the private sector, and larger than the difference in the value of their work.
In the UK there is currently a controversy in the use of ‘zero hours’ contracts of employment, which do not stipulate any working hours, meaning that actual working hours can vary considerably from week to week. There is no commitment on the part of the employer to allocate a particular number of hours, if any, each week. Research estimates that24% of employers in the public sector use zero hours contracts of employment, as opposed to 17% of private sector employers.In all, 9% of public sector workers are employed on non-standard contracts of employment, and that ‘the use of casual workers and agency workers is more prevalent in the public than the private sector. Nearly half (48%) of public sector employers employ casual workers compared with a third (32%) of the private sector. Furthermore, half (51%) of public sector employers employ agency workers supplied by a third party agency for periods of up to 12 weeks compared with 30% of private sector employers. These jobs are mostly low skilled ones such as cleaning, although they are used actively in the employment of nurses and teachers. Most local government workers are in part-time work or employed on temporary/casual contracts of employment. This research found, however, that 43 per cent of those working on such contracts in the public sector are satisfied with the arrangement, compared to 12 per cent who are dissatisfied.
The German state administration has also increased its use temporary agency workers and shortened their average contract duration, as follows:
Year / 2009 / 2010 / 2012Number of agency workers / 1,343 (0.15%) / 1,593 / 2,092
Avg. contract duration / 6 months / 2 months / < 1.5 months
In most ministries, the percentage of employees on fixed term contracts was about 10-20% on 1 July 2013. In some cases the percentage is much higher (more than 30%, e.g. in the Ministry of Food, Agriculture and Consumer Protection), in others much lower (e.g. 4.3% in the Ministry of Defence). The government claims that higher proportions of fixed term contracts in some areas are due to the fact that the staffs concerned were scientists for whom fixed term contracts were normal practice. More importantly, 51.99% of new members of staff were given fixed term contractsin 2005. By 2012, the proportion had risen to 77.41%. This shows a tendency of the public sector to favour fixed term contracts rather than permanent positions. Some courtshave ruled that the use of a long chain of numerous fixed term contracts over a long period of time is illegal.
In October 2011, the German Association of Trade Unions found that working conditions of employees who are on fixed term contracts are substantially lower than those of their colleagues who are on permanent contracts. The fixed term workers complained especially about strain and lack of resources. Trade unions claim that fixed term workers often do unpaid overtime in hope of getting a permanent position (GEW 2009).
In India, the government-owned enterprises have been under pressure to performand compete, taking into account market conditions and the capacity of each unit to pay for itself. As a result, employees working in financially weak government-owned enterprises have not received wage increases since 1994. Further, the ban on recruitment and the pressure to keep costs low have encouraged non-standardwork relationships that violate labour regulation and basic workplace rights.
Regulations and social dialogue
The author of the South African paper stated accurately that the different contractual forms are amenable to legal classification and regulation, which plays a critical role in defining the form non-standard work plays, and its extent.The relation between standard employment and labour regulation is not sufficiently emphasized in the literature about non-standard employment, which tends to exaggerate its diversity.
The background report for the Meeting of Experts on Non-Standard Forms of Employment identified a number of ILO Conventions that are relevant to this group of workers. In terms of the public service, four can be identified as the most relevant. Article 1 of the Labour Clauses (Public Contracts) Convention, No. 94, (1949) sets out in simple terms how such contracts in the public sector might be classified. The ideas and approaches adopted in Convention No.94 would contribute to narrowing the income gap at least in the public sector. Convention No. 151, in turn, establishes the right of public servants to create their own organizations without interference, and to join them regardless of contractual status. The Convention on Termination of Employment, No. 158, applies only to the private sector but can be helpful in addressing the most important issues of workers carrying out work for the public sector under triangular employment relationships. Finally, the Tripartite Consultation (International Labour Standards) Convention, No. 144, establishes mechanisms to implement the foregoing conventions, in a tripartite manner. The following examples address issues related to these Conventions.
In Brazil, the state is legally liable only if it did not exercise due diligence to ensure that the service provider complies with labour laws regarding outsourced workers. The state has the burden of proof to that effect. Notwithstanding the existing regulations, labour conditions of outsourced public administration workers are still unstable. The main problems are the use of outsourcing for illegitimate purposes, illegal outsourcing (for example, outsourced workers performing the same activities of public servants), and non-compliance with outsourced workers’ labour rights, including health and safety rights. These cases represent close to100,000 lawsuits in the labour courts by outsourced workers whose employer did not respect their labour rights. In many cases the employer receives the payment from the Public Administration, does not pay the employees and the company cannot be located, so the money paid by the state cannot be accounted for.
There are two important examples of social dialogue initiatives involving outsourced workers and their trade unions. First, the negotiation rounds promoted by the Labour Public Prosecutor with participation of temporary help agencies, public administration and outsourced workers’ trade unions. These negotiation rounds have an important role in solving conflicts resulting from the non-payment of the labour rights by the temporary help agencies. However, there is a need for a space to prevent these conflicts to occur. The second example is the Permanent Negotiation Fora of the Unified Health System, whichnegotiates on all issues connected to the work force in health services, including the use of non-standard workers at the federal, provincial and municipal levels.
In Canada, the literature found that non-standard work enabled nepotism (managers hired family members as casual employees) and problems with equity, as well as the loss of knowledge, experience and loyalty. Temporary and contractual work arrangements in the 1990s created channels of partiality, and patronage was common in the area of hiring summer students in the government until 1995. Further disadvantages are the loss of skills and knowledge when the contracts of the temporary workers end. Some departments found it difficult to keep workers long enough to meet their needs, which compels them to hire temporary help which in turn needs to be trained. Managers are provided only with little guidance to determine when their practices result in avoiding the Public Service Employment Act (PSEA) and its values. This can happen by using temporary help services to an unacceptable extent, or by continuing to use an individual temporary help service worker through a combination of contracts and the PSEA’s non-permanent hiring procedures.