An increasing number of lawsuits involving the termination of fixed-term employment contracts have come before the courts as a result of restructuring in the private sector. To deal with this matter, a study group was established within the Ministry of Labour to survey the situation. A questionnaire administered in September yielded the following results*.
About 70 percent of all firms surveyed employed workers on a fixed-term contract. Among these firms, part-timers and contract workers accounted for some 60 percent of all fixed-term employees, and temporary workers and workers under other types of fixed-term employment contract accounted for another 14-15 percent. About 40 percent of all workers hired under fixed-term labor contracts were engaged in clerical jobs, and women accounted for about two-thirds of these employees.
A relatively high proportion of firms cited reduction in labor costs as the reason for hiring employees with fixed-term contracts. About 70 percent of firms indicated that as the reason for hiring part-timers; about 40 percent for temporary workers, about 30 percent for contract workers, and about 30 percent for other types of fixed-term employees. However, there was some difference according to the contract type: some 40 percent of firms hiring part-timers and about 60 percent of those hiring temporary workers replied that they did so to cope with changes in the amount of duties. About 50 percent of firms hiring contracted workers said they did so to make use of their specialized abilities and experience.
Many fixed-term employees cited the reasons for working on a fixed-term contract basis as convenience of workplace (about 40%), or the desire to earn extra income to support their families (about 30%). However, the highest proportion (40%) of contract workers surveyed indicated that they chose their current work status and job to make use of their experience. About 40 percent of part-timers who actually work long hours claimed that they had been unable to find regular employment.
Concerning contract periods, the majority of employees on all types of fixed-term contracts had been hired for more than six months but less than one year. A high proportion (about 77%) of contract workers are employed for such periods. In addition, about 66 percent of workers wished that their contracts would be renewed after termination of their current contract.
Concerning the renewal of contracts, firms conclude all types of fixed-term contracts with the understanding that there is a possibility most of the contracts would be renewed. However, the survey found that in about 10 percent of the establishments surveyed, the firm's explanation differed from the workers' actual situations. The survey also found that some 10 percent of workers did not receive an explicit explanation about renewal when agreeing to their labor contract. Also, nearly 10 percent of the establishments did not give employees with fixed-term contracts 30 days' advance notice when they terminated employment. In this regard, some 60 percent of workers who have in the past failed to have their contracts renewed felt dissatisfied with the termination of their contracts. This seems to reflect the fact that firms and workers have a different set of assumptions or understandings with regard to the termination of employment. About half the firms which had terminated a labor contract gave as the reason poor performance or an inappropriate attitude on the part of the worker involved. By way of contrast, 50 percent of workers who had experienced termination of employment said that the reason they were given was simply termination of contract period, while another 30 percent had been told that the termination was due to the deterioration of the company's business performance. It seems likely that dissatisfaction among workers arises from a situation where workers expected their contract normally to be renewed whereas companies did not necessarily consider the relationship to be so lasting.
Together with these results, the survey pointed to the importance of preventing in advance trouble concerning fixed-term labor contracts. The report stressed the need to provide both workers and employers with information, including court case studies, regarding matters on employment relations as they relate to fixed-term contracts, and to give advice and guidance when trouble arises.
Note: *The survey consists of two parts. First the survey was administered to 12,600 companies (with 7,193 effective replies). In the second stage, surveys were administered to 6,000 business establishments (with 1,788 effective replies) and to 24,000 workers who were employed under a fixed-term employment contract (with 5,106 effective replies).
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