Precarious Employment and Workers' Compensation

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Introduction

Over the past two decades, the labor markets of industrialized countries have undergone a number of significant changes (see Brewster et al. 1997, De Grip et al. 1997, Meulders et al. 1996, Quinlan 1998). These changes include a decline in permanent full-time employment and median job tenure (for males), increased use of shiftwork/nightwork, and a growth in self-employment, telecommuting, home-based work, part-time, multiple-job holding, and temporary employment (including workers supplied/leased by agencies or labor hire firms). These work arrangements were originally labeled as atypical or nonstandard work, but these terms have been seen as gender-biased (these types of jobs were never atypical for women) and misleading, given the significant proportion of the workforce (upwards of 30%) now occupying these jobs in many industrialized countries. In recent times, the terms contingent work or precarious employment have been preferred because these emphasize insecurity/flexibility as a critical characteristic of these jobs.

Although some contingent workers are well-paid, the majority experience lower pay and conditions than their counterparts in full-time permanent employment, and there is evidence an increasing number are becoming trapped in these jobs Dietz 1996, Ferber & Waldfogel 1998. The gap varies between different categories of contingent work and the nature of regulatory regimes operating in particular countries, although formal entitlements do not always capture the actual situation. Even in European countries with pervasive regulatory regimes, groups of contingent workers (notably some teleworkers, homeworkers, and children) still fall between the gaps De Vries 1996, Huuhtanen 1997. Moreover, there are important, but often neglected, issues of compliance and underutilization of entitlements. For some countries at least, there is evidence the latter problems are compounded by lower union density amongst contingent workers. They are overrepresented in smaller firms and workplaces that are marked by inferior working conditions and lower compliance with employment regulations (Quinlan, 1999). In short, the labor market of industrialized countries is becoming increasingly bifurcated.

Notwithstanding important intercountry variations and problems with comparative statistics (such as different definitions of employment categories), there is clear evidence of a substantial growth in proportion of workforce engaged in precarious employment across the Organization of Economic Development (OECD). Amongst 21 OECD countries, the proportion of workers employed part-time more than doubled between 1973 and 1995 (from an all-country average of 8.15% to 16.72% (Quinlan, 1998, p. 10). The average proportion of the workforce in 21 OECD countries holding temporary jobs experienced a more modest increase from 9.48% to 11.15% between 1983 and 1994, although statistical recording conventions in several countries (notably the United States) mean these figures should be treated as an underestimate. Further, the OECD average for workers aged 16 to 19 years and holding temporary jobs increased from 31.08% to 42.25% in the same period—indicating a significant growth for this group (Quinlan, 1998, p. 7). It is difficult to compile accurate international data on average/median job tenure, self-employment, home-based workers, teleworkers, leased workers, and a number of other categories of contingent workers. While there is broad agreement amongst researchers about what constitutes contingent/precarious employment (see for example Polivka & Nardone, 1989 cited in Aronsson, 1998) particular categories are only partly captured in the statistics of most countries. The specificities of employment, tax, and other legislation also affect the forms of precarious employment in particular countries as well as the recording conventions adopted by statistical agencies. Nonetheless, country-specific data and more general studies confirm a growth trend Brewster et al. 1997, De Grip et al. 1997, Meulders et al. 1996, Quinlan 1998. A similar point can be made in relation to a number of key processes that have contributed to these trends, including downsizing, outsourcing, franchising, and the growth of small business.

Only comparatively recently have systematic efforts been made to investigate the impact of these labor market changes on patterns of occupational injury and disease. However, since 1993 a mounting body of international research has indicated that the growth of precarious employment has adversely affected occupational health and safety (OHS) (for a summary see Quinlan, 1999). This included studies of particular work groups or practices like outsourcing Blank et al. 1995, Mayhew & Quinlan 1997, Mayhew & Quinlan 1999, Mayhew, Quinlan, & Ferris 1997, Rebitzer 1995, Rousseau & Libuser 1997, Salminen, Saari, Saarela, & Rasanen 1993, downsizing/work reorganization Saksvik 1996, Simpson 1997, Vahtera, Kivimaki, & Pentti 1998, Szubert, Sobala, & Zyci'nska 1997 and small business Eakin 1992, Nichols 1997. It also included more general comparisons of OHS indices between contingent and noncontingent workers Aronsson 1999, European Foundation for the Improvement of Living and Working Conditions 1997a, European Foundation for the Improvement of Living and Working Conditions 1997b, Francois & Lievin 1995, Foley 1998.

The expansion of precarious employment not only affects patterns of workplace injury and disease but also threatens to weaken existing regulatory regimes, including workers' compensation systems (Quinlan, 1999). This aspect has received less attention from researchers (for an exception see Plumb & Cowell, 1998, pp. 268–269), although it is the subject of an increasing number of government reports (see Health and Safety Executive 1996, Huuhtanen 1997, Synthesis Report 1997, van Warden et al. 1997; Workers' Compensation Board of British Columbia, 1997). This article attempts to address this gap, drawing on published research, government reports, and hitherto unpublished quantitative and qualitative material from a series of surveys of contingent workers we have undertaken since 1996. The remainder of the article is divided into three parts. In the first part we examine empirical evidence on relationship between workers' compensation and precarious employment. The next part of the article discusses how precarious employment may also pose serious problems for the administration of workers' compensation, including claims handling and rehabilitation. The final section looks at the implications of declining compensation coverage and utilization for official OHS statistics and prevention programs.

Section snippets

Precarious Employment and Workers' Compensation Cover/Utilization: Some Australian Evidence

In most industrialized countries workers' compensation coverage does not extend to every conceivable category of worker and there are also categories of workers for whom coverage is ambiguous. One example is self-employed workers, who are largely excluded from workers' compensation coverage in many countries. Of probably greater importance but often overlooked is evidence of significant disparities in claims behavior amongst categories of workers who are formally covered by workers'

Precarious Employment and the Administration of Workers' Compensation and Rehabilitation

There is growing international evidence that the growth of precarious employment is adversely affecting the proportion of workers formally entitled to workers' compensation, the number who can utilize this entitlement, and the treatment accorded to some categories of claimants (including issues of equity and access to rehabilitation). In the countries with which we are familiar, compensation coverage is forged on traditional legal definitions of paid employment with a limited extension for

Precarious Employment, Claims Data, and Prevention

In addition to its effects on the administration of workers' compensation, the growth of precarious employment has implication for prevention. Despite some well-recognized limitations (see Backlund 1988, Goldsmith 1998, Industry Commission 1995, Kerr et al. 1996, Wigglesworth 1990), including substantially understating occupational disease, in many countries compensation claims represent the most comprehensive data on work-related illness and form the basis for official statistics used by

Conclusion

This article has sought to evaluate the impact of precarious employment on workers' compensation regimes. Though cognizant of important institutional and regulatory differences, there is now evidence of problems affecting a number of industrialized countries and not simply those where the growth of precarious employment has been most extensive (although the scale of the problems may still vary considerably). In general, the growth of precarious employment is eroding the coverage and

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    The views expressed in this paper are those of the authors and not of the National Occupational Health and Safety Commission.

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