Temporary employees earn 20% less than permanent counterparts

About 200,000 people are working in temporary or non-permanent employment arrangements in Ireland, new official figures suggest.

The research commissioned by the Workplace Relations Commission (WRC) and drawn up by the ESRI found temporary employees earned about 20 per cent less than those in permanent jobs doing similar work.

However, Prof Seamus McGuinness of the ESRI told a WRC seminar in Dublin on Tuesday that its research suggested people employed on temporary contracts did not have any lower satisfaction relative to those on permanent contracts despite the substantial wage penalties.

“The evidence would point to some sort of trade-off taking place. It looks, in particular, as if people opt for these [temporary] type of contracts in order to gain essential experience within their occupations.”

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He said the category of “contingent employment” accounted for about 10 per cent of the overall workforce in Ireland.

The number of people working in this “contingent employment” sector had increased slightly after the economic crash but had now fallen back again, he added.

He did not forecast any major change above the 10 per cent rate up to 2025.

Prof McGuinness said people on temporary contracts and freelance workers were the largest components of the “contingent employment” sector in Ireland.

Gig economy

He said when there were discussions about the so-called “gig economy” (a term which has been defined in many cases as a section of the labour market where short-term contracts or freelance work, as opposed to permanent jobs, are prevalent) it usually was in the context of large firms such as Deliveroo, Uber and Airbnb.

“While they are important employers in their own sectors, they actually represent a very small proportion of the overall labour market.”

The figures delivered at the conference are provisional pending formal publication by the ESRI.

Liam Cox, regional manager for Ireland of Deliveroo, told the conference his company was receiving about 400 job applications per week.

He said the company ’s existing 900 delivery riders were well paid and were offered very flexible work. Some 40 per cent of riders were students working around their study commitments.

Mr Cox said for one in 10 riders, Deliveroo was the main source of their income.

Prof Michael Doherty of Maynooth University said a problem in relation to the contingent employment sector was that traditionally there had been two categories – an employee and a self-employed person.

“The rights you have, the obligations you have and the protections you have both in employment law and in relation to tax and security are very different depending on which side of the line you fall. The problem with contingent work is that it can be much more difficult to say definitively that someone is an employee or self-employed. And that is where the issue arises.”