Abstract

Over the past decade there has been a growing recognition that the growth of flexible work arrangements that have been labeled as precarious employment or contingent work in industrialized countries and the developing world pose a serious challenge to occupational health and safety (OHS). This paper seeks to bring the evidence underpinning these concerns together, reviewing more than 180 pieces of research published internationally since 1966. It then turns to examining the regulatory effects and responses, drawing on results from a detailed study undertaken in Australia plus international evidence. This evidence indicates that the growth of precarious employment has undermined the ability of both conventional OHS preventative and workers compensation/rehabilitation regulatory regimes to fulfil their objectives. Both governments and regulatory agencies are becoming aware of these deficiencies and starting to address them. However, while a number of valuable measures have been developed taken as a whole the response is fragmented, partial and lagging behind the very changes it is trying to address. The paper identifies a number of potentially more effective responses such as those entailing a more co-ordinated regulatory regime, effective minimum standards and contractual tracking mechanisms. The need for a more proactive and broad ranging response that puts the quality of working life at the centre future policy debates is briefly discussed.

Introduction

One of the most significant changes affecting work globally over the past 20 years has been the growth (both in absolute and relative terms) of more flexible or less secure forms of work arrangements, now typically labeled precarious employment (a French-derived term) or contingent work (which originated in the USA). While, there is ongoing debate about what constitutes contingent work or precarious employment – or rather definitional boundaries for inclusion or exclusion (for a discussion see Quinlan and Bohle, forthcoming) – there is wide consensus about the inclusion of some categories of work. These include self-employed subcontractors (including many mobile or home-based workers), temporary (including on-call), leased (or labour hire) or short-term fixed contract workers. More problematic inclusions are micro-small business workers (though many of these are subcontractors) and part-time workers (at least those with permanent positions). While the terms precarious employment and contingent work are often used interchangeably (and indeed there is considerable overlap) the former term has a somewhat wider coverage. However, even precarious employment fails to take full account of the changes that are occurring. The changes in work organisation and labour markets are not confined to the growth of jobs that are formally short-term or insecure. The growth has seen a commensurate decline in the proportion of workers holding permanent/tenured full-time positions (Ferrie, 1999:59) while repeated rounds of downsizing by large public and private workers (and associated changes in industrial relations regimes within at least some countries) have meant that even workers holding nominally permanent jobs are experiencing job insecurity.


While truly comparable global data is often difficult to compile or missing entirely Leaving the last point aside for the moment, the growth of precarious forms of employment has been charted by a series of both official and academic surveys in Europe, North America and Australasia (see for example De Grip, A., Hoevenberg, J. & Williams, E., 1997; US Bureau of Labor Statistics, 1995; Burgess, J. and de Ruyter, A. 2000). Figures combining available data on various categories of contingent work in particular countries illustrate the magnitude of change. In Australia, those holding a casual or temporary job and non-employees (self-employed, subcontractors, etc) constituted less than 30% of the workforce in 1982 but approximately 40% in 1999 (Burgess, J. and de Ruyter, A., 2000:252). If permanent part-time workers are added, the figure rises to 48%. Similar significant shifts have been identified in some EU countries, Canada (see Lowe, G., 2001) and the USA (where around 30% of the workforce hold part-time, temporary, on-call, day hire or short term contract positions or are self-employed. Hipple, S. 2001).
(as with regard to home-based work), and the patterns of employment shifts has varied between countries, the general thrust of the evidence has been consistent and unambiguous, with a relative decline in permanent full-time work and an associated increase in more temporary and insecure work arrangements. For example, combining a study by Campbell and Burgess (2001) with unpublished OECD statistics indicates that the average proportion of the workforce in temporary employment across Australia and 14 EU countries grew from 9.57% in 1983 to 13.75% in 1999, an overall increase of 43.68% in 16 years (Quinlan and Bohle, forthcoming). In some EU countries, notably Belgium and Finland, there has been a rapid expansion of temporary employment in the last 5 years. Unpublished OECD (2001) data for several other countries indicates that Iceland (11.1% in 1999), Norway (10.12%), Switzerland (11.84%), Canada (12.09%) and Japan (11.91%) had levels of temporary employment roughly comparable to the EU average. The level of temporary employment was lower in Hungary (5.2%) and the Czech Republic (8.67%), but higher in two developing countries, Mexico (21.1%) and Turkey (20.73%).

In relation to the last point it should be noted that the growth of precarious employment has not been confined to developed countries. In developing countries there has been a growth of temporary work arrangements within the formal sector of the economy where some form of employment regulation applies. However, it also needs to be noted that these countries also have a substantial informal economy (including backyard factories, street sellers etc) outside the cover of any employment regulation and that this sector, which may account for as much as half the economically active workforce (including many women and children), is growing too (for studies of OHS of the informal workforce see Santana et al 1997 and Lowensen, 2000). Even developed countries have an informal sector (sometimes called the black economy) and while this is relatively small (at least in comparison to developing countries) it appears to be growing – something not unconnected to the growth of precarious employment (as retrenched workers are forced to find alternative forms of support, by the employment of illegal immigrants in small businesses like restaurants and by the capacity/pressure to use children in home-based work). As has been argued elsewhere (Quinlan et al, 2001a) these changes are connected to global changes in business practices (including international supply chains) and all have potentially serious implications for occupational health and safety.

Attention in the remainder of the paper will concentrate on the OHS and regulatory implications of the growth of precarious employment within developed countries.

Precarious Employment And Ohs: The Evidence Mounts

While studies of the health and safety effects of job insecurity and contingent work arrangements can be identified as early as the 1960s there has been a rapid escalation of published research since the mid 1990s, mirroring growing concern at the expansion of the employment arrangements. The first review of this research was presented to a EU workshop organised by Gunnar Aronsson and Kerstin Isaksson at the Foundation for Improving Living and Working Conditions in Dublin in May 2000 and a year later (in revised form) to WorkCongress5 held in Adelaide before being published in the same year (Quinlan et al 2001a&b). This review sought to identify all studies that measured OHS amongst contingent workers or the effects of job insecurity on worker health and wellbeing. It was based on a search of relevant journals along with more selective searching of books, research monographs and government reports (where this involved detailed scientific analysis). The review, covering more than 90 studies (mostly undertaken in Europe, North America and Australasia though with some studies from Asia, Africa and South America), found a clear adverse association between precarious employment and OHS, with over 80% of studies finding these work arrangements were associated with inferior OHS outcomes. Later and more specialised reviews of available research on the OHS effects of job insecurity and the safety effects of contingent work largely served to confirm the initial findings.

Since WorkCongress5 we have been able to more than double the number of studies in our database (covering the period 1966-2002), in part reflecting both studies missed from the initial review and also studies published after the first review was completed. Of these 188 studies 53 were undertaken in the USA, 25 in the UK, 21 in Sweden, 19 in Australia, 18 in Canada, 16 in Finland, 12 in France, 5 in Germany, 5 in Denmark, 4 in Brazil, two each in Norway, the EU, Spain and South Africa, and one study each in Belgium, Ireland, China, Poland, Egypt, Japan, Netherlands, Switzerland and Zimbabwe. Along with population-based studies, there were a number of industry specific studies, including 38 covering manufacturing, 29 in healthcare, 23 in the public sector, 10 each in financial/personal services and construction, 9 in transport, 7 in retail/hospitality, 5 in post/telecommunications/media, 4 in mining/oil, 2 in power generation, and 1 in maritime/fishing.

The reviewed studies used a range of methodologies and OHS indices. Thirty-nine used secondary data analysis, 62 were longitudinal studies, 75 were cross sectional surveys, 9 were qualitative case studies and a further 9 used some other method. The range of OHS indices used by these studies included injury rates, blood pressure, self-reported injury and health (such as the General Health Questionnaire or GHQ), sickness absence, knowledge/compliance with OHS law & policies. Grouping these indices it was found that 57 used objective health measures, 105 used subjective health measures, 17 measured sickness absence (using either or subjective measures), 14 measured legal knowledge/compliance and 10 measured organisational policies/training. The total just given exceed 188 as some studies covered more than one country or used multiple categories, methods or indices.

Of the 188 studies examined 29 were deemed to be indeterminate because they lacked a control or benchmark or the results were too ambiguous to interpret. Of the remainder (159) 141 or 88.6% of determinate studies (& 77.9% of all studies) linked precarious employment to inferior OHS outcomes in terms of higher injury rates, hazard exposures, disease and work-related stress. Turn specifically to the latter, it can be noted that 74 of 188 studies used some indicator of work-related stress (such as the GHQ). Four of these 74 studied were deemed indeterminate. Of the remaining 70, 63 (or 90% of determinate studies and 85% of all studies) linked precarious employment to worse stress outcomes.

As in previous reviews, studies were broken down according to the particular type of precarious employment they examined (some studies examined several categories simultaneously) as well as the more generalized notion of job insecurity. The review identified 96 studies of downsizing/job insecurity. Of these 81 found adverse OHS effects, 8 had nil/positive results and 9 were indeterminate. In relation to outsourcing and home-based work the review identified 36 studies. Of these 27 studies found adverse OHS outcomes while the remaining 9 were indeterminate. Of the 36 studies of temporary or leased workers included in the review 19 found adverse OHS outcomes, 6 were nil/positive and 11 were deemed indeterminate. The review included 16 studies of small business (mainly micro small business) and of these 8 found adverse OHS outcomes while the remaining 8 were indeterminate.

The review separated out telecall centre and teleworkers not because they represent a distinct category of contingent work but because they represent a relatively new and significant area of employment often associated with contingent work arrangements (most notably temporary employees and home-based subcontract workers). Only five studies measuring OHS amongst telework/telecall workers could be identified and all but one were indeterminate because the lack of a control group (the exception did identify significantly inferior health outcomes for telecall workers compared to those completing the same tasks in a more conventional work setting).

The review also included studies measuring OHS outcomes amongst permanent part-time workers, although whether these workers could be categorized as precarious or contingent is questionable. In the end the review identified 10 studies all but one of which found OHS outcomes that were nil/positive in comparison to control groups of permanent part-time workers. Hence, this was the only category of workers in the review where the findings did not match those of the overall results.

In sum, the updated review served to reinforce the results of earlier reviews. While this was a narrative rather than meta review and no attempt was made to exclude methodologically weaker studies the vast majority of those studies reviewed were substantial pieces of scholarship published in leading international journals. The research database does help to identify areas of relative neglect. More research is needed on the service sector (eg hospitality, telecall centres); outsourcing/home-based work (especially health effects and hazard exposures), temporary work, leased labour, micro small business, part-time work, multiple jobholding and the safety (as opposed to health effects) of downsizing. There is also a need to explore the relationship between contingent work and gender, work/life balance and shiftwork/long hours. Further, we also need research on the wider social implications of precarious employment for cost externalities, regulatory frameworks and occupational health management systems. Finally, it should be recognised that the growth of precarious employment poses some major challenges to conventional data sources and research methods. The rapid job churning associated with temporary employment in some industries (like hospitality, road transport or food processing) will make cohort studies virtually impossible, make epidemiological studies very difficult and is likely to render official data sources (like workers’ compensation claims, death certificates and like) less accurate. Control groups may be difficult to establish where, for example, an industry is largely casualised and permanent workers undertake different tasks. Not least, in some industries the intense competition between different categories of workers (such as employee and subcontract truck drivers) will tend diminish OHS outcomes overall, thereby partly obscuring the effects that are due to changes in work arrangements (indeed understating such effects).

Notwithstanding these caveats, it must now be accepted that is a large and compelling body of evidence that a number of pervasive flexible work arrangements pose a serious threat to the maintenance of existing standards of OHS. It should be noted that such an overwhelming result is unusual for a large review of scientific research. It also important to note that methodology, indices or country where the research was undertaken exerted no discernible influence on these results. This suggests that regulatory and other institutional differences as well existing policy responses are exerting a minimal effect on these outcomes – an observation with significant policy implications. The remainder of this paper will consider the regulatory challenges posed by these work arrangements and the attempt by government agencies and others to meet these challenges.

Regulatory Challenges

A relatively small number of the studies reviewed above as well as other literature identified significant OHS regulatory issues in relation to precarious employment, notably lower knowledge of or compliance with legislative requirements amongst subcontractors, temporary workers and those engaging them and less willingness to raise OHS issues or access entitlements (like workers’ compensation) amongst contingent workers (see for example Aronsson, 1999; Johnstone et al 2001; Walters, 2001). The problems have also been raised in a number of reports prepared for government agencies in Europe, North America and Australasia, though often at a generic level or in connection to only one aspect of contingent work such as temporary employment or telework (see for example Pennings et al, 1996; Synthesis Report, 1997; EFILWC, 1997; WCB of BC, 1997; and European Agency for Safety and Health at Work 2002). In 2001 I was commissioned by an Australian state government OHS agency (the WorkCover Authority of New South Wales) to undertake research and prepare a report on the regulatory challenges – both with regard to prevention and workers compensation/rehabilitation posed by changing work arrangements and assess the strategic solutions being developed to address these. The project covered all state, territory and federal government OHS jurisdictions (not just New South Wales), and received the active cooperation of all relevant government agencies. As part of this process I met with 10 of the 12 tripartite industry reference groups (IRG’s) established in New South Wales, conducted both focus group and individual interviews (using a semi-structured questionnaire) with 63 regulatory staff (both policy and operational) in 9 of the 10 jurisdictions and 40 senior employer/industry and union representatives. I also conducted a relatively exhaustive search of relevant government material (legislation/regulations, codes, guidance material, information bulletins, internal and public reports, prosecution reports and workers compensation claims data pertaining to several jurisdictions over the past five years). This information was augmented by a more selective collection of employer/industry association and union material and workplace visits. I also obtained and perused a number of reports on the issue prepared by or for government agencies in Europe, Canada, the USA and New Zealand.

The evidence collected in the report (Quinlan, 2003) based on this project indicated that precarious employment and job insecurity were creating serious problems for existing OHS regulatory regimes in Australia. Unlike many other countries (apart from Canada) Australian OHS and workers compensation legislation is largely state/province based. However, like Canada, the United Kingdom and many other European countries the legislative framework uses a mixture of process and prescriptive standards based on general duty provisions that set broad behavioural standards for an array of parties (employers, workers, contractors, designers, manufacturers, suppliers and others). Effectively, the general duties require employers to undertake risk assessment (like the EU this is specifically mandated in NSW), to maintain a safe system of work (including adequate plant and equipment, training of workers and work organisation), and to take adequate consideration of any major change in work process (and this could include downsizing). Further, like the European Union and Norway the legislation mandates worker involvement in OHS through elected employee health and safety representatives or HSRs (there are well over 50,000 of these in Australia at present) and joint worker/employer OHS committees at the workplace. In short, OHS legislation in Australia is broadly similar to that found in many other industrialised countries (including the recent focus on promoting systematic OHS management) and, in very general terms, the same applies to workers compensation legislation (with the exception of those countries where this has been integrated into social security). It is important to make this point because reading overseas reports and other international evidence indicated that many of the problematic issues I identified in relation to Australia are by no means unique. Indeed, there is clear evidence a number I am about to describe are being experienced in other countries. While we need more research to explore the extent of the similarities and where and how differences arise I think the Australian evidence I am about to describe provides a template for both research and an emerging policy debate.

The problems identified in my review were extensive and can only be briefly summarized here.

Prevention

Turning first to preventative legislation and policy a number of points can be made.

The general duty provisions in Australia OHS statutes establish a hierarchy of responsibility (as between the principal and a subcontractor) as well as web of multiple or shared responsibilities (as in the case of labour leasing firm and its host and on multi-employer worksites). While this would seem well-suited to meeting the challenges posed by changing work arrangements (and indeed it is certainly to superior to a legislative framework that fails to recognise or address these complexities) the evidence uncovered in the course of research indicated that the growth of precarious employment was associated with a fracturing of statutory responsibilities (at least in the eyes of those being regulated) that was undermining the effective implementation of the legislation.

Subcontracting (especially multi-tiered or pyramid subcontracting), labour leasing and much home-based work (where self-employment or subcontracting is entailed) introduce third parties into the work arrangement as opposed to the relatively simple and direct employer/employee relationship that have been the overwhelming focus of OHS regulatory regimes in the past. In two jurisdictions design flaws in the legislative duties limited coverage of certain subcontracting arrangements (on relating to work undertaken by subcontractors outside the employers place of work and another limited the capacity to pursue legislative responsibility more than one step in the subcontracting chain) though other jurisdictions have used deeming and other special provisions to clarify legislative coverage. However, even where changes to work organisation have not exposed gaps in statutory coverage, the introduction of third parties creates more complicated and potentially attenuated webs of legal responsibility that place heavier logistical demands on the inspectorate. For example, monitoring to see if there is an integrated OHS management system becomes more difficult on multi-employer sites or those making extensive use of subcontractors or home-based workers and there is a commensurately greater risk of instances of ‘paper compliance’ escaping undetected. Further, conducting workplace inspections is nothing short of a logistical nightmare in the case of mobile workers, literally thousands of home-based workers and temporary workplaces (like a telecall centre established for a marketing campaign that may last only a few months). Finally, where a breach is detected or serious incident occurs the inspectorate can face greater difficulty in identifying the parties to prosecute (such as the principal contractor) and their legal status (especially where the ‘corporate veil’ of shelf companies is used) or the precise employment status of the worker (and this may have implications for the relevant provision to be used in legal proceedings). Further, the existence of third parties make determining the share of responsibility and who to pursue in legal proceedings (more than one party can be prosecuted) more time-consuming.

It should be noted here, that as in the USA, specialist advice has been provided to some employers by legal firms and others about how to configure their organisation or their workforce in order to minimize their ‘exposure’ to a raft of statutory requirements (relating to taxation and industrial relations as well as OHS and workers compensation). For example, in one case a taxi firm configured itself as a trust and its workers as beneficiaries of that trust. While this represents an extreme case it highlights the element of calculated regulatory evasion that is at least a partial contributor to the growth of precarious employment. Even where there has been no calculated regulatory evasion growth of these work arrangements increases the potential risk of ignorance or misunderstandings in terms of meeting legislative requirements. Regulators expressed concern that employers often presumed outsourcing an activity or leasing a worker diminished their responsibility (it doesn’t) and that short-term nature of temporary employment affected their attitudes to the need to provide adequate induction and training or to ensure these workers were represented by HSRs or on workplace committees).

In relation to the last point it should be noted that with some notable exceptions (such as the NSW Risk Assessment Regulation 2001) existing laws and guidance material on worker involvement largely presume a permanent work arrangement between employer and employees and as such take little or no account of the presence of subcontractors, leased or temporary workers. The laws only refer to employees or are worded in ways that provide scope for ambiguity (for example failing to specify when subcontractors should be included in workplace health and safety committees). Further, there has been a failure to recognise that workplace size thresholds for establishing a committee or the appointment of a HSR (both de facto and dejure) represent a more critical limitation on worker involvement as downsizing, outsourcing and other practices reduce the number of workers in particular workplaces. These shifts have been compounded by declines in union density (as unions provide critical logistical support to HSRs) while also making it more difficult for unions to maintain a presence in existing workplaces (something exacerbated by changes to federal industrial relations legislation since 1996). Perhaps at least equally important, the project failed to find one jurisdiction/government agency in Australia that has actively monitored compliance with or enforced regulatory requirements in relation to worker involvement. Regulators recognised the problems posed by extensive use of subcontractors (as have some employers) in terms of obtaining representative input on committees from workers and examples were also cited where temporary workers were grossly under-represented on committees (there are clear logistical incentives for this situation to arise). Available evidence suggests, the problems precarious employment poses for worker representation under existing OHS regulatory regimes just described are by no means confined to Australia. These problems pose a potentially serious limitation for systematic OHS management currently being promoted by many industrialised countries (Saksvik and Quinlan, 2003).

Further, arguably contributing to employer etc ignorance of their general duty responsibilities where contingent workers are involved has been the lead-time for inspectoral agencies adapting their guidance material and enforcement practices to meet these challenges. Surveying existing materials revealed major gaps in regulations, codes and guides/information to parties in terms of clarifying responsibilities in relation particular work arrangements or categories of workers. At present no Australian agency has produced guidance material on downsizing/restructuring although regulators acknowledged such changes could clearly fall with the meaning of major changes to work processes (under the general duty provisions), that in general employers failed to consult workers adequately and they were aware of instances where changes led to a serious deterioration in OHS. As in the USA staffing levels are being included as a risk factor in some guidance material on occupational violence but this is limit of activity thus far. Only one jurisdiction (Victoria) has produced generic information to advise employers of their responsibilities in relation to temporary workers and the production of generic material on home-based work is also exceptional. Given some recent initiatives, the situation is slightly better in relation to subcontracting, labour leasing and telecall center work. Relatively detailed guidance material has been produced in relation to specific industries and sectors (such as government and more notably construction) and reference to temporary and leased workers can also be increasingly found in industry-specific documentation (like hospitality and agriculture) or at-risk categories of workers (notably young workers, seasonal harvest workers and immigrant workers). It is worth noting that, as in a number of EU countries, Canada and the USA, both young workers and small business have received considerably increased attention from inspectorates (though most of the guidance material still fails to identify the concentration of young workers in temporary jobs or the fact that many small businesses are subcontractors).

Given the pervasive use of contingent workers across many industries the efforts just described leave substantial gaps. What is needed is a comprehensive array of both generic guidance material and more detailed industry/sector specific guides (that take account of the particular configuration of work arrangements in that industry). Again, examination of OHS agency websites in the USA, Canada and the UK indicated that gaps in guidance material were by no means confined to Australia. The European Union has produced a directive on temporary workers (first drafted almost a decade ago) but, as with attempts at uniform regulation of the working hours of self-employed truck drivers, this has not proved a simple process, suggesting similar delays will accompany efforts to develop directives on other issues like downsizing, leased workers, subcontractors and telework.

Turning to the question of enforcement, it can be noted that notwithstanding the logistical problems already identified, OHS agencies in Australia have increasingly sought to target and publicize their prosecutions in ways that would both clarify legal obligations and have a deterrent effect. With regard to subcontracting and leased workers in particular, this activity appears to have had some effect (in terms of awareness raising and the activities of individual employers and industry associations). For example, there are a growing number of cases where both the leasing firm and the host employer have been fined substantial sums as a result of serious incidents. At the same time, this has raised questions about whether large labour-leasing firms can actually undertake adequate risk assessment for the diverse and shifting array of workers they provide. Further, rapid turnover amongst small leasing firms and contractors in some industries considerably weakens the ‘learning’ effect of these prosecutions. In an admittedly extreme case, a new and small leasing firm managed to help ‘kill’ the first worker it supplied. While both it and host employer were prosecuted and the former went out of business numerous others will take its place entering the industry equally ignorant of their OHS responsibilities.

In some areas, such as downsizing, prosecutions are virtually unknown because it has been put in the ‘too hard’ basket in terms of proving a case (although prosecutions may be launched using other grounds). Some targeted and publicized prosecutions are beginning to occur in relation to directly engaged temporary workers (ie as distinct from leased workers discussed above), especially younger workers, and with regard to homecare workers and telecall centers. But, by and large home-based work has not been the subject of active enforcement. Overall, enforcement is even patchier in terms of coverage than the production of codes and guidance material. Again, from what could be deduced from an internet-based search of agency and related web sites the situation appears to be similar in Europe and North America.

Workers Compensation/Rehabilitation Effects

The possibility that precarious employment poses serious problems for workers compensation regimes has received far less attention than is the case with prevention even though by late 1990s there was evidence to suggest these challenges were by no means insignificant (Quinlan and Mayhew, 1999). Investigations revealed a number of problems being experienced by Australian jurisdictions.

First, there was a decline in formal coverage of workers due to growth of types of work arrangement (mainly self-employed subcontractors, including some home-based workers) that were either excluded from cover or for whom cover was entirely voluntary. Each jurisdiction tends to include special categories of self-employed workers who deemed to have coverage under workers compensation (such as clothing outworkers) but these deeming provisions were found to be relatively ineffective and additional elements of confusion were created by further ‘innovations’ in work arrangements, workers shifting between categories and inconsistent definitions of ‘worker’ under workers compensation, OHS and industrial relations statutes.

Second, almost certainly greater than the decline in formal coverage was the drop in effective coverage (ie the failure to make claims) amongst eligible workers (such as temporary or leased employees) due to ignorance of their entitlements (enhanced where there are genuine ambiguities referred to above), fears for job insecurity or lost income, job churning (making linking a claim to an episode of employment more difficult) and regular shifts in employment status. In Australia fewer than half injured workers make a workers’ compensation claim (many relying on medicare, social security or their own resources) and claim rate is substantially lower amongst part-time workers (the closest surrogate we have for contingent workers. See ABS, 1994,2001). At the same time, there is Canadian and US evidence that temporary workers have higher claim rates than their permanently employed counterparts (see for example Butler et al, 1998 and Shannon and Lowe, 2002). There are ways of reconciling this apparent contradiction but the issue requires further research.

Third, the last two problems have in turn created additional administrative demands on workers’ compensation agencies in terms of determining whether a worker is eligible for workers compensation or who is an eligible worker’s employer in the case of self-employment, subcontracting or leasing arrangements (ie the third party issue already raised in relation to prevention). The growing incidence of multiple jobholding also poses additional administrative problems for workers compensation authorities. Essentially identical problems have been identified in other countries such as Canada and the USA (see WCB of BC, 1997 and Quinlan and Mayhew, 1999).

Fourth, agencies were increasingly concerned that the growth of small business, subcontractors, temporary workers, labour leasing and home-based work was adversely affecting premium collection as a result of failure to take out cover and (more importantly) under-insurance (due to understating workforce/payroll, outsourcing high-risk groups or manipulation of occupational categories for premium calculation purposes). Agencies were having address more and better targeted resources in an effort to combat this fraud. Again, these problems have been identified in other countries such as the USA (Quinlan and Mayhew, 1999).

Fifth and finally, agencies were concerned that their attempts to secure a return to work were being hampered by these work changes because such measures are more difficult for small business and it was difficult to get employers to take the same responsibility for temporary or leased workers as could be expected in relation to permanent workers. Australia, unlike many European countries, does not mandate occupational health services but the growth of contingent work has created difficulties for private health service providers. This finding mirrors the experience of a number of European countries such as France where services are mandatory (Rondeau Du Noyer & Lasfargues 1990).

Other Regulatory Effects

In addition to the problems just identified there are other less apparent but arguably significant regulatory and institutional effects.

First, the drop in coverage of workers under workers compensation (and claims suppression to the extent it occurred) has resulted in cost shifting to the general health care and social security system. The same process could occur even in countries where workers compensation is integrated into social security if, as is the case in some, a differential level of payment for work-related injuries provides an incentive to shift work injuries into the non-work category of social security. This represents an effective externalization of the costs of work-related injury and disease placing an additional financial burden on government and the community, putting the families of affected workers at a social disadvantage (due to financial burdens and stress), and entailing a set of socially disruptive incentives.

Second, loss of coverage and changed claims behaviour has potentially serious implications for the accuracy of workers compensation claims data and its consequent value as a guide for preventative interventions and workers compensation/rehabilitation strategies. At the very least, the data becomes less comprehensive but in some cases at least these changes can contribute to serious distortions in terms of the level or nature of risks (for example, in construction, agriculture and road transport a significant number of occupational fatalities involve self-employed workers). Moreover, the use of subcontractors and leased workers can affect the overall claims experience of an industry or employer, providing a potentially misleading impression of improved performance (a problem also identified by Swedish research. See Blank et al, 1995). It is important to note that the growth of precarious employment is also likely to impact adversely on other surveillance and reporting systems. For example, more volatile or mobile workplaces, job churning in particular industries (like hospitality) and more complicated work histories are not conducive to clinical diagnosis of work-related illnesses, cohort or epidemiological studies, or the accurate recording of occupation on death certificates. Again these issues have a wide resonance. In her study of the French nuclear industry Thebaud Mony (2000) found that subcontractors received 80% of the total workforce radiation exposure and this had significant implications for both the identification of hazard exposures, management responses and deficiencies in regulatory responses. Whatever the problems precarious employment poses for the recognition and treatment of injuries can be multiplied when attention is turned to hazardous substance exposures and the threats to worker health and wellbeing arising from psychosocial factors.

Third, the growth of precarious employment poses a number of indirect problems in relation to the maintenance of minimum labour standards, a regulatory framework that representations a foundation for OHS and workers compensation law – a nexus more clearly understood by social and labour reformers 100 years ago than it is today (Quinlan et al, 2001a). Self-employed subcontractors in Australia (and many other countries for that matter) do not enjoy the regulatory protections of employees with regard to minimum wages, maximum hours of work and other conditions (like annual, long service and maternity leave; sickness absence etc). The WorkCover project reinforced other evidence that in several industries such as home-based clothing manufacture, road transport and construction the absence of minimum standards and the consequent competition for work (including employees) was undermining OHS by encouraging hazardous work practices (long hours, corner cutting etc) and diminishing compliance with OHS and workers compensation legislation. Again, similar problems have been identified in Europe and North America (for examples in trucking see Quinlan 2001). The mismatch in key definitions (eg worker) under industrial relations, OHS and workers compensation statutes already referred to exacerbated these problems by promoting ambiguity amongst key parties and making it more difficult for inspectorates covering these spheres to integrate their enforcement activities.

Fourth and finally, there is increasing evidence the growth of precarious employment is imposing an array of externalities on the community. While some contingent jobs are well paid the vast majority are not and even some of those that are or well paid are extremely vulnerable to changes to market demand (see the recent experience of the information technology industry). Job insecurity has wide-ranging direct health effects on various categories of workers (Ferrie, 1999). Researchers have pointed to other indirect effects on workers and the community, with a number of studies finding adverse spillover effects on family and non-work roles (See Mauno and Kinnunen, 1999; Burke and Greenglass, 1999; and Shannon et al 2001). Others have argued that the workplace and social dislocation associated with downsizing and job insecurity is conducive to an increase in violence both within and outside the workplace (see Schwebel, 1997 and Neuman and Baron, 1998). There is growing evidence (see for example Barling and Mendelson, 1999) that a succession of short term or insecure jobs (including the cobbling together of several part-time jobs by workers that some human resource management spin doctors have labeled portfolio employment) can have adverse implications in terms of poverty/budgeting, accommodation (purchase or rent), the health and education of these worker’s children, and welfare and pension entitlements (especially where these are contribution-based). Two critical arguments used in support of flexible work arrangements is that they are more family friendly and also enhance the capacity of persons to find jobs therefore reducing unemployment (a related argument is that this process also provides a more even spread of income opportunities rather than a more bifurcated divide between the permanently employed and the unemployed). With the exception of permanent part-time work (and even here there are exceptions due to split shifts or other factors), there is little evidence to justify claims of family-friendliness. Rather, there is mounting evidence that the long or unsocial hours, lack of bargaining power and pressures associated with many contingent jobs have deleterious effects of work/family balance (though changes to permanent full-time jobs are indicating a deterioration in work/non-work balance highlight the point made earlier by interaction or associated effects, as in the case where permanent workers are called on supervise temporary workers as part of their routine tasks).

With regard to the second argument (ie the alleged unemployment reduction effect) it might be suggested this is a socially beneficial change because of the compelling evidence surrounding the adverse health effects of unemployment. However, as has been noted elsewhere (Bohle et al 2001) even if we ignore other externalities referred to above and, further, confine our examination to the health effects of job insecurity the purported overall health advantage of promoting employment at the expense of working conditions is questionable. We now have compelling evidence (ie 84 out of 96 studies) that job insecurity has serious measurable and, in many cases, long term effects on worker health and psychological wellbeing. These effects may not be -on average- of the same order as those experiencing long-term unemployment although this presumption needs to be tested especially in the light of selection effects (see Mastekaasa, 1996) and research on the ‘skidding’ effects of retrenchment and the impact of lengthy episodes of intermittent work and unemployment. See Claussen et al, 1993). However, even if the presumption holds the number of persons experiencing job insecurity is now much larger than the number of unemployed in most if not all industrialised countries. So it is more than likely that any health gains from reduced unemployment have been swamped by the losses associated with job insecurity. What is equally disturbing is that this consideration (or the costs of other externalities for that matter) appear to been ignored by governments when introducing policies promoting flexible employment and even as the evidence mounts neo-liberal policy advocates remain conspicuously silent. For those of us who believe that policy should be informed by evidence this is a disturbing example of what appears to be a growing disjunction between policy discourse and its effects on the community.

Regulatory Responses

Government agencies responsible for OHS have responded to most apparent of the challenges just identified in a number of ways. In general, the response of Australian government agencies appears broadly similar to initiatives in other countries although the nature of regulatory regime in particular countries as well as other institutional factors (such as the relationship between the social partners) has clearly influenced the character of responses.

Prevention

With regard to prevention a major response by OHS agencies has been to start devising or revising codes and guidance material. New generic or industry specific guidance material on subcontracting, labour leasing, telecall centers and (to a lesser extent) temporary workers and home-based work have been developed over the decade (especially the last five years) and existing material has been revised to make reference to these arrangements. On the positive side, the material has been developed and distributed in a variety of formats (documentary, electronic and campaign-based), utilizing the knowledge of key parties and involving networking with comparable agencies (including those in other countries). On the negative side this activity has yet to come close to be comprehensive in coverage and while it gives increasing recognition to psychosocial and work organisation issues in most cases the guidance provided is still informed by an only limited understanding of the key risk factors associated with these work arrangements. Some areas like downsizing/job insecurity and multiple jobholding are yet to be addressed in any meaningful way.

In some industries such as construction and road transport particular packages have been developed to improve OHS management including setting minimum standards of risk assessment and work planning for subcontractors and small operators, with the active collaboration of industry and unions. These have enjoyed a measure of success, in part due to the support of the social partners, and in part due to the regulatory impetus of enforcement incentives. More generally, agencies are seeking to implement new codes or highlight legislative responsibilities in the context of altered work arrangements. Methods include a mixture of targeted low-level monitoring and enforcement campaigns (involving successive ratcheting up of penalties in the case of non-compliance) and a small number of highly publicized ‘big ticket’ prosecutions designed to send a message to key parties (such as host employers and labour leasing firms). Although agencies became increasingly dependent on workers compensation claims data to shape prevention programs in the 1980s (reflecting in part the trend to put workers compensation and prevention within the same department if not agency) agencies are now making more use of compliance audits to detect problems. Several are also using hospital-based data to supplement information on categories of work where workers' compensation claims are seen to be less reliable (such as construction and road transport). There have been suggestions that Australia should adopt a workforce survey along the lines of that conducted by the Foundation for Improving Living and Working Conditions for the European Union to provide benchmark data on changes in working conditions, including otherwise missing psychosocial indices. This proposal is yet to be taken up.

Moves are under way by several jurisdictions to address defects in the legislation relating to subcontracting arrangements and other issues like those relating to worker involvement are starting to be examined. Unions have pressed for the introduction of roving safety representatives, along the lines of the Swedish system (see Frick and Walters, 1998) and currently being given a limited trial in the UK, to provide worker representation in smaller workplaces and where subcontractors are involved. This proposal has not received a positive response thus far. Overall, agencies are shying away from legislative change, in part because they do not view major change to the existing framework as essential and in part because the existing political climate in Australia (as in many other countries) is extremely hostile to additional regulatory controls that interfere with business and markets.

It is fair to say that the existing legislative framework provides opportunities for OHS inspectorates to address overlapping webs of contractual obligations that have by no means been fully exploited (the laws of several jurisdictions provide a particular opportunity here in relation to franchise arrangements. See Johnstone, 1999). State and federal governments could also take more action to impose and enforce minimum standards in their tender requirements but like the USA (where last minute efforts by the Clinton administration to beef up implementation of the federal Fair Labour Standards Act have been stymied. Johnstone et al, 2001) but this option has been little exercised. This highlights the dominance of neo-liberal discourse in policy-settings and the problem OHS agencies can have when called on to rectify problems that arguably originate in the policies adopted by government and other agencies (for example hospitals outsourcing the supply of sheets etc from the lowest cost supplier irrespective of their OHS and employment practices).

In terms of more innovative and potentially path-breaking responses, it is worth briefly identifying developments affecting the clothing and road transport industry. The clothing industry strategy is examined in another paper at this conference my comments here are brief. After much community pressure the NSW government responded to the risks to and exploitation of home-based clothing workers (who far outnumber factory based workers) by introducing an integrated legislative and policy package. The ‘Behind the Label’ strategy addressed the problems posed by an elaborate supply chain of multi-tiered subcontracting where the party exerting most influence (the fashion retailer) was remote from those actually fulfilling the tasks (the outworker) and the intermediary steps afforded ample opportunity for evading wages, hours, OHS and workers compensation legislation. The government used the Industrial Relations (Ethical Clothing Trades) Act to develop a regulatory framework that effectively integrated industrial relations, OHS and workers compensation laws. In so doing it established a multi-agency approach to mutually assured standards with contractual tracking mechanisms and workplace/worker registration (to track the flow of work and conditions of employment), and utilising the technique of rebuttable presumption (with regard to dispute wages and workers compensation claims) to ensure that the top of the supply (mostly fashion houses and retailers) could not escape their legislative responsibilities. To further strengthen this process the package guaranteed union access to information and a role in enforcement as well community involvement. This reform has since been adopted or is under active consideration by other jurisdictions. A similar reform package to deal with OHS in long haul trucking (entailing a multi-signatory and traceable ‘safe driving plan’ and the establishment of a minimum ‘safety’ rate covering self-employed drivers) is currently under consideration.

While it is too early to make definitive judgments about their effectiveness, the importance of these strategies is that address the root source of OHS risks in these industries (long hours, low pay and regulatory evasion associated with multi-tiered subcontracting and top-of-the-supply-chain pressure) and combat the techniques of regulatory evasion in a situation where enforcement would otherwise be a logistical nightmare (ie tens of thousands of isolated and, in the case of trucking especially, mobile workers). In so doing, the regulatory strategies have bridged the historical divides between industrial relations, OHS and workers’ compensation law that characterize most industrialised countries. While clothing and trucking may be regarded as extreme cases the latter in particular is a pivotal industry and, at the very least, these developments may provide a model for other industries experiencing similar problems (such as construction, couriers and some other service activities) if not more generally.

Workers Compensation/Rehabilitation

With regard to workers compensation OHS agencies in Australia have responded in a number of ways. A number of jurisdictions are considering widening their coverage provisions or extending existing special deeming provisions to include more contingent workers and combat efforts at evasion. Recently, initiatives have been proposed in NSW that would include tracking mechanisms (along similar lines to the Behind the Label strategy discussed above) to ensure that the deemed coverage of some groups of subcontractors and home-based workers is effective rather than nominal.

To a lesser degree the foregoing efforts have been combined with strategies to raise the awareness of some workers of their entitlements although this activity is largely confined to a few special groups (most notably younger workers) and there has been no attempt to follow some noteworthy Canadian initiatives. Agencies have also put considerably more effort into detecting and prosecuting non-compliance (non-insurance or under-insurance) by employers (using computer databases, targeted auditing and higher penalties). A number of jurisdictions have established a set of insurance premiums for the labour-leasing firms to more appropriately reflect the level of risk and discourage ‘premium’ manipulation.

Finally, to enhance rehabilitation/return to work amongst workers in small business (including subcontractors) agencies have promoted the concept ‘pooling’ where a number of firms in the same area can exchange workers or provide a shared job.

Limitations With Recent Initiatives And The Way Forward

Agency responses to the challenges posed by changing work arrangements are, in the main, logical and practical. However, despite some good and innovative measures the response is far from comprehensive, with major omissions both in terms of regulations, codes and guidance material and implementation practices. Most interventions do not get at the root cause of the problems they seek to address and cannot address some aspects (such as the difficulty of identifying disease in industries where there is considerable job churning). Home-based work, telework, mobile/transient work and even downsizing constitute a logistical nightmare in terms of inspectoral resources. To be anywhere near effective at a broad level using these methods would require more resources than most agencies could even dream of having at their disposal. Further, with several notable exceptions, the responses are confined, failing to appreciate increasingly important interconnections between laws regulating business/commerce/trade, industrial relations and workers compensation as well as OHS. So long as laws permit the 'corporate veil' and other evasive devices, OHS regulators will have increasing difficulty meeting the challenge of altered work arrangements. In a real sense, the effectiveness of OHS regimes are being undermined by the weakening of unions and collective negotiation (a trend in many industrialised countries). Unions provide logistical support to participatory processes and protection for workers to speak out on OHS more generally. The weakness if not complete absence of unions exacerbates the vulnerability of the precariously employed and, of course, it is the growth of these very work arrangements has contributed to union decline.

There are some promising options, such as the explicit regulation of supply chains using contract-tracking mechanisms, licensing/registration, guaranteed union and community vetting, and integrated multi-agency enforcement regimes. Regulators today are slowly rediscovering the importance of workplace registration/licensing that was so crucial to their counterparts 100 years ago in dealing with work arrangements then. It is no small irony that some of these work arrangements are similar (such as home-based pieceworkers and temporary workers) to those found today notwithstanding the rhetoric of the new economy (Quinlan et al 2001a). Minimizing the entitlement gap between permanent and temporary workers (a regulatory strategy pioneered by France) represents another more broad ranging option that afford immediate protection while also possibly discouraging the use of such arrangements. The effectiveness of this strategy relies on ensuring that the formal legal entitlements of temporary workers are actually realized and in practice this has proved problematic. Evidence from a number of countries suggests the entitlement gap between contingent and non-contingent is wider in practice than formal statutory entitlements would suggest (Quinlan, 1999) and thus more effective enforcements measures would seem a pre-requisite for this approach. At the same time, effective long-term solutions will require extending these devices in conjunction with other measures. As this paper has tried to indicate, the existing regime for protecting employment standards, including OHS, may need to be reconfigured at both national and international level (given international supply chains, the capacity to move even some services 'offshore' and competitive trade pressures). This is likely to require a more integrated approach rather than policy initiatives within each of the formally separated regulatory spheres of industrial relations, OHS and workers compensation. The minimum standards net may also have to be extended to take more explicit consideration of practices that promote job insecurity and other risks, such as downsizing and to extend worker rights to collective representation. With regard to the latter, the Swedish system of roving or regional health and safety representatives deserves wider consideration as an option worth emulating.

Further, the de facto subordination of social protection to business, commerce and trade regulation and standards that has come about through the pursuit of neo-liberal policies by industrialised countries needs to be questioned. A number of these laws and policies are not simply inconsistent with the establishment of effective protection (for example, by pre-empting the establishment of minimum payments to some categories of workers), but provide taxation and other incentives to use categories of work arrangement that evade, bypass or weaken regulatory protections. These policies have developed in the context where, effectively, neither individual organisations nor policymakers have factored in any recognition of the externalities associated with such arrangements (of which OHS is only one).

It is essential that the nature and quality of jobs becomes a central issue of national and multinational policy development, not an afterthought. A recent assessment by Gallie (2003) found that the Scandinavian focus on quality of working life had achieved tangible outcomes. The Quality of Work debate within the European Union is especially important in terms of extending a policy agenda where an integrated strategy to promote productive, satisfying and healthier jobs can be developed, including informed assessment of the impact of different types of flexible work arrangements. Promoted by countries under a series of presidencies (beginning with Sweden) a conference in Brussels in 2001 provided ample evidence that such an approach was both needed and practical. The Foundation for Improving Living and Working conditions produced a series of work quality indicators (including occupational health and safety) that took account of changing work arrangements and could be meaningfully applied by EU members (as the Finnish presentation to Brussels demonstrated). Unfortunately this development has not proceeded as far might have been hoped in the last two years. Speaking from an Australian perspective, I hope this process regains momentum and other countries like my own will look to engaging this agenda. Only by such an approach can we hope to achieve long-term developments in the nature of work where the interests of all groups have had input and the full costs and benefits of various types of work arrangement can be properly apprised.

Conclusion

As the review of international research in this paper demonstrates, there is now substantial if not compelling evidence that the growth of precarious employment poses a serious threat to the maintenance of OHS standards. The risks associated with these work arrangements pose a particularly difficult challenge to regulatory agencies, because they require a more explicit recognition of work organisation issues than inspectorates have been accustomed to in the past, they are logistically demanding and partly because they entail a weakening if not outright evasion of the statutory frameworks upon which existing regimes are based. As the Australian evidence shows, government agencies responsible for prevention and workers compensation/rehabilitation are responding with an array of measures. Many of these are valuable and a few (like regional safety and health representatives and the multi-agency and integrated regulatory response to home-based clothing workers and truck-drivers) are genuinely innovative. In the main, however, the evidence we have suggests governments and inspectorates have nothing approaching a comprehensive or strategic response. There is an urgent need to develop such a response that entails methods that negates the capacity to evade existing standards and that ensures effective protection of the rights of contingent workers. This will entail moving beyond the regulatory spheres of OHS and workers compensation to entering the domains of business and taxation law, industrial relations and labour market law and policy at the national level as well as creating a close nexus between minimum labour standards and trade policy at the international level. Finally, more than simply looking to protection governments will need to engage more proactively in shaping the types of jobs they wish their citizens to have now and in the future.

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This paper was presented by Michael Quinlan, School of Industrial Relations and Organisational Behaviour, University of New South Wales, Sydney, Australia