10
December 2018
PDF version [322KB]
Geoff
Gilfillan
Statistics and Mapping Section
Executive
summary
- There were 2.6 million casual employees in Australia in August
2018. The casual share of total employees fell slightly from 25.1 per cent in
August 2017 to 24.6 per cent in August 2018.
- In August 2018 there were 126,000 employees who were paid by a
labour hire company or employment agency—accounting for only 1.0 per cent of
all employed persons. This employment share has changed little over the past
decade.
- There were just over one million people working as independent
contractors in Australia in August 2018. The number of independent contractors
has been very stable over the past decade. However, their share of total
employment has fallen slightly from 9.0 per cent to 8.0 per cent.
- Public sector employees were much more likely than private sector
employees to be on a fixed-term contract in August 2018 (12.5 per cent compared
with 3.8 per cent).
Contents
Executive
summary
Introduction
Definitions of different forms of
employment
Latest estimates for different forms
of employment
Casual employees
Figure 1—growth in casual and
permanent employees
Figure 2—change in casual share of
employees and employment
Figure 3—prevalence of casual
employees by state and territory
Labour hire employees
Table 1—trends in employees paid by a
labour hire firm or employment agency
Employees on fixed-term contracts
Table 2—trends in employees on
fixed-term contracts
Independent contractors
Table 3—trends in independent
contractors
Conclusion
Introduction
In line with structural shifts in the
economy, the Australian labour market has undergone significant change over the
past 30 years. This has included the emergence of service industries as the
driving force of the economy and employment growth. As a result of this
transition, there has been very strong growth in labour force participation of
women, strong growth in part-time and casual employment (for both women and
men), and a decline in the permanent full-time employee share of total
employment.
In the past few decades other non-standard or
non-traditional forms of employment such as labour hire, employees on
short-term contracts, and engagement of independent contractors have emerged as
hiring options for employers. This snapshot sheds light on the significance and
contribution of different forms of employment to the Australian economy.
The annual ABS publication Characteristics of
Employment (cat. no. 6333.0) provides information on growth in
different forms of employment as well as the characteristics of different
employee types. These characteristics include gender, age, occupation,
industry, skill level, duration with current employer and expectation of being
with the same employer in 12 months. The ABS publication also provides
information on trade union membership and is a source of data for median
earnings of different types of employees.
Definitions
of different forms of employment
The responsibility of employers for providing entitlements
to workers can vary depending on whether the employer directly engages the
worker as a permanent or casual employee on a fixed-term contract, or as an
ongoing employee. Employers also have options to recruit workers from a labour
hire firm or employment agency (which accepts the responsibility for on-hired
workers) or engage the services of independent contractors (who don’t have
employee entitlements).
- Casual employees are workers without access to paid leave
entitlements (such as sickness and holiday pay and other forms of personal
leave) and are usually paid an additional hourly payment or loading (usually
between 15 and 25 per cent) as compensation. Casual employees may be engaged on
a fixed-term contract or may continue to work with the same employer for a
period of time depending upon the availability of work.
- Permanent employees are workers with access to leave entitlements
who can be engaged on an ongoing basis or on a fixed-term contract.
- Labour hire employees are people who found their current job
through a labour hire firm or employment agency and are paid by the firm or
agency. Labour hire firms and agencies undertake the screening, selection and
placement of people for employing organisations and also engage in the supply
of their own employees to employers for a specified period.
- Independent contractors are persons who operate their own
business and are contracted to perform services for others without having the
legal status of an employee. In other words they are persons who are engaged by
a client, rather than an employer to undertake the work.
- An employee on a fixed-term contract is engaged for a specified
period that ceases on a particular date or event.
Latest
estimates for different forms of employment
Casual
employees
In August 2018 there were around 2.6 million casual
employees in Australia who accounted for 24.6 per cent of all employees.
Figure 1—growth
in casual and permanent employees
Source: ABS, Characteristics of Employment, cat. no. 6333.0, Table 1b
In the 12 months to August 2018, the number of casual
employees grew by 43,400 or 1.7 per cent while the number of permanent
employees grew by 346,100 or 4.6 per cent. This contributed to a slight fall in
the casual share of total employees from 25.1 per cent in August 2017 to 24.6
per cent in August 2018. Total employees includes permanent and casual
employees but excludes owner managers of incorporated and unincorporated
enterprises.
Figure 2—change
in casual share of employees and employment
Source: ABS, Characteristics of Employment, cat. no. 6333.0, Table 1b
The casual employee share of total employment also fell in
this period from 20.7 per cent to 20.5 per cent. Total employment includes permanent
and casual employees as well as owner managers of incorporated and
unincorporated enterprises.
Prior to the most recent 12 month period, there are two
distinct periods that can be observed where the number of casual employees was
either growing more strongly or more weakly than permanent employees. Between
2004 and 2012 the number of casual employees grew at an annual average of 1.7
per cent and permanent employees grew at an annual average of 3.1 per cent.
This trend was reversed between 2012 and 2017 when the number of casual
employees grew at an annual average rate of 2.9 per cent compared with an
annual rate of growth of 1.2 per cent for permanent employees.
Over the longer period from August 2004 to August 2018, the
number of casual employees grew by 34.7 per cent and the number of permanent
employees grew by 41.4 per cent.
South Australia and Queensland had the highest prevalence of
casual employees in August 2018at 28.1 per cent and 27.6 per cent of all
employees respectively, while Victoria had the lowest prevalence at 21.5 per
cent.
Figure 3—prevalence
of casual employees by state and territory
Source: ABS, Characteristics
of Employment, cat. no. 6333.0, Table 1b
Labour hire
employees
In August 2018 there were 126,000 employees who were paid by
a labour hire company or employment agency—accounting for only 1.0 per cent of
all employed persons. This employment share has barely changed over the past
decade. The low count for this group of employees is perhaps surprising, but
could partly be explained by confusion among survey respondents as to whether
they are being paid by a labour hire firm or the organisation they are on-hired
to. Further investigation of the latest data revealed 427,000 people found
their current job through an employment agency and 166,000 through a labour
hire firm.
Labour hire employees are much more likely to be employed on
a casual basis and have a greater expectation of leaving their employment in 12
months. Almost four in five (78.8 per cent) of labour hire employees in August
2018 were employed on a casual basis compared with the average for all
employees of 24.6 per cent. Just under a quarter (24.4 per cent) of labour hire
employees did not expect to be working for the same employer in 12 months—more
than double the estimate for all employees (at 9.9 per cent).
Table 1—trends
in employees paid by a labour hire firm or employment agency
| |
Paid by an
employment
agency
or labour hire firm |
Total employed |
Labour hire share of
total employed (%) |
| November 2001 |
161,800 |
9,058,500 |
1.8 |
| November 2008 |
131,400 |
10,651,100 |
1.2 |
| November 2011 |
141,700 |
11,353,400 |
1.2 |
| August 2014 |
113,300 |
11,529,610 |
1.0 |
| August 2016 |
119,400 |
11,954,159 |
1.0 |
| August 2018 |
126,200 |
12,589,826 |
1.0 |
Sources: 2001, 2008 and
2001—ABS, Forms of Employment, cat. no. 6359.0; 2014, 2016 and 2018—ABS,
Characteristics of Employment, cat. no. 6333.0, Table 13.3
Employees
on fixed-term contracts
The proportion of employees with a fixed completion date or
event in Australia has remained steady over the past four years at just over 5
per cent. Permanent employees were just as likely as casual employees to be on
a fixed-term contract in August 2018 (both 5.2 per cent). However, employees in
the public sector are more than three times as likely to be on fixed-term
contracts as private sector employees (12.5 per cent in August 2018 compared
with 3.8 per cent). Public sector employees on fixed term contracts accounted
for 37.6 per cent of all employees on fixed-term contracts in August 2018. To
put this into perspective, all public sector employees accounted for 15.6 per
cent of all employees in Australia at this time.
Table 2—trends
in employees on fixed-term contracts
| |
August
2015 |
August
2016 |
August
2017 |
August
2018 |
| Number of employees on fixed-term contracts |
522,100 |
535,600 |
526,000 |
547,500 |
| Permanent employees on fixed-term contracts as a share of
all permanent employees (%) |
4.8 |
5.2 |
5.0 |
5.2 |
| Casual employees on fixed-term contracts as a share of all
casual employees (%) |
7.0 |
6.0 |
5.7 |
5.2 |
| Public sector employees on fixed-term contracts as a share
of all public sector employees (%) |
12.0 |
12.8 |
12.0 |
12.5 |
| Private sector employees on fixed-term contracts as a
share of all private sector employees (%) |
4.1 |
4.0 |
3.7 |
3.8 |
| Employees on fixed-term contracts as a share of all
employees (%) |
5.4 |
5.4 |
5.2 |
5.2 |
Source: ABS, Characteristics
of Employment, cat. no. 6333.0, data compiled using TableBuilder
Independent
contractors
According to the Fair Work Ombudsman ‘independent
contractors run their own business, usually negotiate their own fees and
working arrangements and can work for more than one client at a time.
Independent contractors are often called contractors or subcontractors (or ‘subbies’)’.
The difference between an employee and independent contractor is based on a
number of factors. These differences include the degree of control over work
they undertake, hours of work they perform to complete tasks, and who bears
financial risks associated with their work. Sub-contractors also have
responsibility for making superannuation contributions and paying taxes
(including GST) to the Australian Taxation Office. More information on the
differences between employees and independent contractors can be found on the
Fair Work Ombudsman website.
According to ABS data there were just over 1 million people
working as independent contractors in Australia in August 2018—little changed
from August 2017.
Table 3—trends
in independent contractors
| |
Independent
contractors |
Total employment |
Independent
contractor share of
total employed (%) |
| November 2008 |
964,753 |
10,723,824 |
9.0 |
| November 2009 |
1,043,095 |
10,789,637 |
9.7 |
| November 2010 |
1,089,553 |
11,077,192 |
9.8 |
| November 2011 |
1,015,595 |
11,172,297 |
9.1 |
| November 2012 |
973,322 |
11,348,302 |
8.6 |
| November 2013 |
973,179 |
11,402,031 |
8.5 |
| August 2014 |
994,543 |
11,529,610 |
8.6 |
| August 2015 |
1,000,239 |
11,767,624 |
8.5 |
| August 2016 |
1,036,266 |
11,954,159 |
8.7 |
| August 2017 |
1,010,979 |
12,253,238 |
8.3 |
| August 2018 |
1,009,659 |
12,589,826 |
8.0 |
Sources: 2001, 2008 and
2001—ABS, Forms of Employment, cat. no. 6359.0; 2014, 2016 and 2018—ABS,
Characteristics of Employment, cat. no. 6333.0, Table 13.3
The number of independent contractors has remained very
stable over the past ten years while their share of total employment has fallen
slightly from 9.8 per cent in November 2010 to 8.0 per cent in August 2018.
Conclusion
The latest ABS data indicated a slight fall in the casual
share of total employment and employees in the year to August 2018 compared
with the previous year, as well as a small fall in the independent contractor
share of total employment.
Claims have been made by some economic commentators and
unions about the growing casualisation of the workforce and disproportionate
growth in non-traditional or non-standard forms of employment. These claims are
not supported by the latest data. While there have been periods where growth in
casual employment has been stronger or weaker than permanent employment over
the past 14 years, the casual share of employees and employment has not changed
substantially in this time. In fact, over the whole period analysed, growth in
the number of permanent employees has been stronger than growth in casual
employees.
The latest ABS data also shows the independent contractor
share of total employment has been falling slightly since 2010, and labour hire
employees have continued to account for a very small share of total employment
in Australia over the past decade.
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