What is temporary employment?

Temporary employment, whereby workers are engaged only for a specific period of time, includes fixed-term, project- or task-based contracts, as well as seasonal or casual work, including day labour.

Temporary employment started attracting particular policy attention about three decades ago when its use in the labour market increased.

Fixed-term contracts

Fixed-term, project- or task-based contracts are contractual employment arrangements between one employer and one employee characterised by a limited duration or a pre-specified event to end the contract.

Fixed-term contracts (FTCs) have always existed in labour markets and serve specific purposes. They provide flexibility to enterprises to respond to changes in demand, such as due to seasonal fluctuations, to replace temporarily absent workers, or to evaluate newly hired employees before offering them an open-ended contract. But beyond these traditional reasons, some enterprises have come to rely heavily on FTCs, hiring workers recurrently on these contracts for permanent tasks of the company.  For these enterprises, temporary employment may bring challenge for the firm, including on how to manage workers in different type of arrangements but performing similar tasks; it also risks leading to underinvestment in training and innovation and hence lower productivity.

Some workers choose to be employed in temporary jobs as they are combining work with education or have other responsibilities that keep them from committing to work of an indefinite duration.  For most workers on FTCs, however, it is not an explicit choice. When fixed-term employment is involuntary, the arrangement is often of inferior quality as compared to indefinite-term contracts, especially if transitions to open-ended employment are compromised. It is thus important to prevent abuses in the use of FTCs through limitations on their renewals or overall duration or the prohibition of fixed-term work for permanent tasks. It is also essential to provide equal conditions of work to workers in temporary employment as compared to workers in standard employment.

Casual work

Casual work is the engagement of workers on a very short term or on an occasional and intermittent basis, often for a specific number of hours, days or weeks, in return for a wage set by the terms of the daily or periodic work agreement. Casual work is a prominent feature of informal wage employment in low-income developing countries, but it has also emerged more recently in industrialized economies, particularly in jobs associated with the “on-demand” or “gig economy”.