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Fixed-term employees in Australia: Incidence and characteristics

Staff research paper

This paper by Matthew Waite and Lou Will was released on 22 February 2002. The paper presents an analysis of the incidence and characteristics of one form of non-traditional employment—fixed-term employment.

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  • Media release
  • Contents
  • Addendum

A staff research paper by Matthew Waite and Lou Will, Fixed-term Employees in Australia: Incidence and Characteristics, presents an analysis of fixed-term employment in Australia.

Fixed-term employees account for a relatively small share of employed persons—3.3 per cent in 2000.

Fixed-term employees are a diverse group. They are employed in all industries and occupations. However, they are largely concentrated in Education (30 per cent of fixed-term employees in August 1998), Health and community services (18 per cent) and in the occupational category of Professionals (44 per cent). Just over 50 per cent worked in the public sector, in contrast with 26 per cent of ongoing employees.

The study is the latest in a series conducted by the Productivity Commission into non-traditional employment.

Background information

Patrick Jomini (Assistant Commissioner) 03 9653 2176

02 6240 3330

Preliminaries
Cover, Copyright, Contents, Preface, Acknowledgements, Abbreviations, Glossary, Key Messages

1 Introduction
1.1 What is fixed-term employment?
1.2 Historical background
1.3 Why might fixed-term employees be of policy interest?
1.4 Structure of the paper

2 Why might employers and employees choose fixed-term employment?
2.1 Why might firms engage fixed-term employees?
2.2 Why might people prefer to work on a fixed-term basis?

3 The incidence of fixed-term employment in Australia
3.1 Cross-section evidence on fixed-term employment
3.2 Evidence from specific sectors
3.3 Might fixed-term employment have become more common?

4 Characteristics of fixed-term contract employees
4.1 Characteristics of fixed-term and ongoing employees
4.2 Results from a multivariate analysis
4.3 Earnings of fixed-term employees

5 Conclusions

A Employment arrangements

B Characteristics data

C Details of econometric analysis

References

This addendum contains additional information about the termination of employment provisions of the Workplace Relations Act 1996.

At pages 2 - 3, the Paper states that if a fixed-term contract allows termination of the contract at any time with notice, courts have determined that it is not a 'contract of employment for a specified period of time' for the purposes of the WR Regulations and therefore employees may not be excluded from making unfair dismissal claims.

  • It should be noted that section 170CD of the WR Act provides that the federal termination of employment laws only apply where there has been a termination of employment at the initiative of the employer. Even if a purported fixed-term contract allows termination with notice, if the employment is not terminated until the specified period of the contract expires, then the termination of employment will generally not be a termination of employment at the initiative of the employer. Employees in this situation would not be able to make a termination of employment claim under the WR Act, and the exclusion in WR Regulation 30B(1) would not be relevant.
  • It should be noted that the Australian Industrial Relations Commission has decided that where a fixed-term contract can be or is terminated for cause (for instance, misconduct), the employee will still be excluded under WR Regulation 30B(1) from making a termination of employment claim.

The Paper states in footnote 5 on page 6 that the avoidance of unfair dismissal claims might provide an incentive to an employer to engage an employee under a fixed-term contract. However, as indicated on page 3 of the Report, 'The decisions […] mean that employers can not avoid unfair dismissal claims by engaging (and then terminating at will) employees under fixed-term arrangements', as a consequence of:

  • WR Regulation 30B(2), which provides that the exclusion of fixed-term contract employees from termination of employment remedies does not apply if a substantial purpose in engaging an employee under a contract for a specified period is to avoid obligations under the termination of employment provisions.