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The notion 'for pay or profit' refers to work done as part of a transaction in exchange for remuneration payable in the form of wages or salaries for time worked or work done, or in the form of profits derived from goods and services produced through market transactions. It includes remuneration in cash or in kind, whether actually received or not, and may also comprise additional components of cash or in kind income. The remuneration may be payable directly to the person performing the work, or indirectly to a household or family member.
According to the international guidelines, persons in employment comprise:
The international definition of employed persons on "temporary absence" during a short reference period refers to those who, having already worked in their present job, were "not at work" for a short duration but maintained a job attachment during their absence. In such cases, "job attachment" is established on the basis of the reason for the absence and, in the case of certain reasons, the continued receipt of remuneration and/or the total duration of the absence as self-declared or reported, depending of the statistical source.
Reasons for absence that are by their nature usually of short duration, and where "job attachment" is maintained, include those such as sick leave due to own illness or injury (including occupational), public holidays, vacation or annual leave, and periods of maternity or paternity leave as specified by legislation.
Reasons for absence where the "job attachment" requires further testing include, among others: parental leave, educational leave, care for others, other personal absences, strikes or lockouts, reduction in economic activity (e.g. temporary lay-off, slack work), disorganisation or suspension of work (e.g. due to bad weather, mechanical, electrical or communication breakdown, problems with information and communication technology, shortage of raw materials or fuels). For these reasons, a further test of receipt of remuneration and/or a duration threshold should be used.
The duration threshold should be, in general, not greater than three months taking into account periods of statutory leave entitlement specified by legislation or commonly practiced, and/or the length of the employment season so as to permit the monitoring of seasonal patterns. Where the return to employment in the same economic unit is guaranteed, this threshold may be greater than three months. For operational purposes, where the total duration of the absence is not known, the elapsed duration may be used.
DEFINITIONS USED IN ABS SURVEYS
The ABS produces estimates of employment from both household and business surveys. The definition of employment used in household surveys is designed to be consistent with the international standards. The definition of employment used in business surveys relates more closely to paid employment.
DEFINITIONS USED IN ABS HOUSEHOLD SURVEYS
Three different definitions of employment are used in ABS household surveys. Information on the relevant questionnaire modules is contained in Standards for Labour Force Statistics, Dec 2014 (cat. no. 1288.0), detailed in Appendix 3.
Labour Force Survey
The LFS is designed to produce precise estimates of employment (and unemployment), and the definition used aligns closely with international standards and guidelines.
The questionnaire module used in the LFS is referred to as the Labour Force Survey Questionnaire Module. It uses a comprehensive and detailed set of questions to precisely measure the numbers and certain characteristics of persons in employment and unemployment. Detailed information on the LFS questionnaire module is in Information Paper: Questionnaires used in the Labour Force Survey, 2014 (cat. no. 6232.0), detailed in Appendix 2.
The definition of employment used in the LFS aligns closely with the concepts and international definitions outlined in earlier chapters. Employed persons are defined as all persons aged 15 years and over who, during the reference week:
For employees absent from work, a condition of formal job attachment is considered to exist in any of the following circumstances:
The LFS, while mostly aligned with the international definition, has a narrower temporal definition of formal job attachment for employees absent from work. The international definition notes a duration threshold should be, in general, not greater than three months taking into account periods of statutory leave entitlements specified by legislation or common practices, and/or the length of the employment season so as to permit the monitoring of seasonal patterns. Where the return to employment in the same economic unit is guaranteed, this threshold may be greater than three months. The LFS condition of formal job attachment for employees is outlined above.
In the LFS, those who are self-employed, employers and owner managers absent from work during the reference week are defined as employed without further testing of formal job attachment. Contributing family workers who are absent from work in the reference week are not considered to be employed. The international guidelines relating to formal job attachment outlined above apply to all employed persons who were temporarily absent from work.
Other ABS household surveys and Special Social Surveys
In other household surveys and Special Social Surveys, where employment is an explanatory or classificatory variable, it is generally not practical to determine employment as precisely as in the LFS. While estimates of employment produced from these surveys are designed to be consistent with the international concept of employment, the definition used is slightly broader than that used in the LFS.
A shorter module, referred to as the Household Survey Questionnaire Module, is used in most other ABS household surveys and Special Social Surveys to produce estimates of labour force status. Employment is more broadly defined in these modules than in the LFS.
There is also a labour force module in the Census of Population and Housing, referred to as the Census of Population and Housing Questionnaire Module. This module is shorter than the Household Survey Questionnaire module, and is generally completed through a self-enumeration mode.
While aggregates produced from household surveys and the Census, which do not use the Labour Force Survey Questionnaire Module, are designed to be consistent with the international concepts of employment and unemployment, the treatment of certain small population groups is simpler and less precise than that used in the LFS. Consequently, there are differences between estimates produced from the LFS and those produced from the Census or from household surveys using the reduced modules.
DEFINITION OF EMPLOYMENT USED IN ABS BUSINESS SURVEYS
Concepts of employment used in ABS business surveys are narrower than the concept used in ABS household surveys. While estimates of employment from household surveys are comprised of persons engaged in work, estimates from business surveys are of jobs involving paid employment. There are two important distinctions between these estimates: the first relates to the statistical unit being measured, i.e. persons versus jobs; and the second to the concept being measured, i.e. (total) employment versus paid employment. These are discussed further below.
Estimates of employment from business surveys refer to jobs rather than persons. For example, persons holding jobs with different employers would be counted in ABS household surveys as employed once, but in ABS business surveys would be counted for each job held.
Estimates of employment from business surveys mainly relate to paid employment. Paid employment is one component of total employment; when combined with self-employment, it would provide a concept of employment that is consistent with the international concepts. However, the coverage of paid employment applied in ABS business surveys is narrower than that outlined in the international guidelines. It excludes:
Some industry and economy-wide ABS business surveys, however, do include a component of self-employment as well as paid employment in their surveys.
Estimates of the number of paid employment jobs (also referred to as employee jobs) from business surveys are not equivalent to estimates of the number of persons in paid employment jobs (also referred to as employees) from household surveys. When comparing estimates of the employee jobs from ABS business surveys to estimates of employees from ABS household surveys, the differences outlined above should be considered.
Estimates of employment are available from the following ABS household surveys:
Estimates of employee jobs are produced from the following ABS business surveys:
Labour Force Survey
The monthly LFS is the official source for Australia’s employment and unemployment statistics. The definition of employment used in the LFS is outlined above. The survey uses a comprehensive and detailed set of questions to precisely measure the numbers and certain characteristics of persons in employment and unemployment as well as persons not currently economically active. Estimates from the LFS are available by State/Territory, Capital City/Rest of State, and 87 sub-State regions (see Chapter 15 and Appendix 1 for more information on geographic classifications available from ABS household surveys). For more detail on the content and methodology of the LFS, see Chapter 19.
Census of Population and Housing
As discussed above, the Census of Population and Housing uses the Census of Population and Housing Questionnaire Module to produce employment estimates consistent with the international standards. However, because the self-enumerated questionnaire module defines employment less precisely than the LFS, estimates produced are not strictly comparable with those from the LFS. For these reasons, employment estimates from the Census should be used with caution in analyses where labour force activities are a major focus.
When comparing estimates of employment from the Census of Population and Housing with those produced from the LFS, users should also note differences between the two surveys in scope (for example, the inclusion of permanent defence forces in Census employment data) and methodology. Refer to Chapter 18 for further information on the Census of Population and Housing.
Special Social Surveys
As discussed above, most Special Social Surveys use the Household Survey Questionnaire Module for personal interviews to produce employment estimates that are consistent with the international standards. However, because the reduced questionnaire module defines employment less precisely than the LFS, estimates produced are not strictly comparable with those produced from the LFS. When comparing employment estimates from Special Social Surveys with estimates from the LFS, users should also note differences in scope and methodologies across the surveys.
Survey of Employment and Earnings
The Survey of Employment and Earnings is a business survey producing estimates of employee jobs in the public sector. There are conceptual reasons, as well as methodological reasons, for differences in estimates of employment produced from business and household surveys. For further information on the scope and collection methodology of this survey, refer to Chapter 30.
Economic Activity Survey
The Economic Activity Survey is a business survey producing employment estimates. There are conceptual as well as methodological reasons for differences in estimates of employment produced from business and household surveys. For further information on the scope and collection methodology of this survey, see Chapter 24.
Employee Earnings and Hours
The Employee Earnings and Hours Survey is a business survey producing estimates on the composition and distribution of earnings and hours paid for, of employees, as well as information on how employees' pay is set - by award only, collective agreement or individual arrangement. For further information on the scope and collection methodology of this survey, see Chapter 29.
STATUS IN EMPLOYMENT
Status in Employment is a classification of employed persons according to the nature of their relationship to the enterprise in which they work.
The term Status in Employment is used in the international standard as outlined in the International Classification of Status in Employment (15th International Conference of Labour Statisticians, 1993). The term Employment Status should be avoided, as it is easily confused with the concept of Labour Force Status. The classification Employment Type has previously been used by the ABS, but is now redundant as the groups identified within the Employment Type classification are now specified in Status in Employment.
Status in Employment is an attribute of the measurement unit 'job'.
Previously in labour statistics two main employment classifications were used: Status in Employment and Employment Type. The LFS used the Status in Employment classification for its standard output, while the labour supplementary surveys (and other social surveys) predominantly used the Employment Type classification. Status in Employment was necessary in the context of national accounting and the measurement of income, as Compensation of Employees (the largest component of Gross Domestic Product) is based on the System of National Accounts definition of 'employee'. However, it did not provide the most useful representation for analysis of the labour market.
The Employment Type classification was considered preferable for most labour market analysis. Unlike Status in Employment, Employment Type aimed to capture the fundamental nature of employment relationships, which was whether a person worked for an employer or operated their own business, regardless of the legal status of that business. This meant that in the Status in Employment classification, persons who operated their own incorporated enterprise (owner managers of incorporate enterprises (OMIEs)) were included in the Employees category, whereas in Employment Type, this group was identified separately.
To overcome the complexities, and potential misinterpretation or comparison of data, the ABS revised the Status in Employment classification in 2014 to provide a single labour market relevant classification that can meet all uses. This was achieved by removing OMIEs from the Employees category and having them separately identified. As a result, the Employment Type classification is no longer required.
While the Status in Employment classification is different, there is effectively no break in LFS or supplementary survey series as the categories are conceptually consistent and able to be aggregated or disaggregated to match the previous version of the Status in Employment classification and the Employment Type classification. For more information, see Information Paper: Outcomes of the Labour Households Surveys Content Review, Australia, 2012 (cat. no. 6107.0) and 'Status of employment and population concordance (Appendix)' published in Characteristics of Employment, Australia, August 2014 (cat. no. 6333.0).
Status in Employment is determined by an employed person's position in relation to their job, and is usually collected in respect of a person's main job if they hold more than one job. The Australian Status in Employment classification classifies employed persons according to the reported relationship between the person and the enterprise for which they work, together with the legal status of the enterprise where this can be established. The groups distinguished in the Australian classification are:
Figure 4.1: Status in Employment
To ensure consistency with the System of National Accounts, the 'Employee', 'Owner manager of incorporated enterprise with employees', and 'Owner manager of incorporated enterprise without employees' series combine to provide estimates consistent with Compensation of Employees within the National Accounts.
It is permissible to aggregate the two 'Owner manager of incorporated enterprises' categories (with and without employees) into a single 'Owner managers of incorporated enterprises' category, similarly for the two 'Owner managers of unincorporated enterprises' categories (with and without employees). It is also permissible to aggregate the two categories 'Owner managers of incorporated enterprises with employees' and ' Owner managers of unincorporated enterprises with employees' into a single category 'Owner managers with employees', and similarly for the categories of owner managers without employees, provided it is clearly labelled.
Status in Employment is collected in household collections. Each of the three labour force status questionnaire modules includes questions to derive Status in Employment. They are:
Full-time/part-time status is widely used to categorise persons or jobs in terms of the number of hours worked. This status is of interest in understanding the nature of employment, particularly when cross-classified with socio-economic characteristics.
Most ABS household surveys, including the LFS, define full-time/part-time status of employed persons in terms of the hours actually and/or usually worked (in all jobs). In some cases, a subjective approach based on respondents' perception of their full-time or part-time status is used. This approach is most often used where information is sought about work that is not currently being undertaken, and where recall problems may be encountered using a more objective approach.
ABS business surveys classify employee jobs, rather than people, as full-time or part-time. Classification of employee jobs as full-time or part-time is based on the employer's perception of whether the person has been engaged on a full-time or part-time basis.
People are defined as employed part-time in the LFS if they usually work less than 35 hours per week, and actually worked less than 35 hours in the survey reference week in all of their jobs. Full-time employed persons are defined as those who usually work 35 hours or more per week, regardless of how many hours they actually worked, and those who actually worked 35 hours or more in the reference week despite usually working less than 35 hours per week. Part-time employment is defined solely on the basis of hours worked, and does not depend on employee or employer perception of whether the person is full-time or part-time. Figure 4.2 below shows the LFS definition of full-time/ part-time employment by usual and actual hours worked.
Table 4.1: Full-time and part-time employment
Actual hours worked refers to hours actually worked during normal periods of work in the reference week, as well as any overtime worked, excluding any time off or leave. Usual hours refer to those worked in a 'typical' period, as opposed to strictly in the specified reference period. Collecting information on usual hours reduces the impact that leave and other absences have on actual hours worked, while actual hours mitigates the subjective nature of defining 'usual' or 'typical' behaviour.
In the LFS both actual and usual hours worked information are collected, deriving full-time employed people as those who:
Part-time employed people as those who:
In other household surveys only usual hours of work are collected, and full-time/part-time status is based on the total number of hours usually worked per week in all jobs. Full-time employed people are those who usually work 35 hours or more per week (in all jobs), while part-time employed people are those who usually work less than 35 hours per week (in all jobs).
Where only actual hours worked are collected (e.g. the Census of Population and Housing), full-time/part-time status is based on the actual hours worked in the reference week. Full-time employed people are those who worked 35 hours or more in the reference week (in all jobs), while part-time employed people are those who worked less than 35 hours in the reference week (in all jobs). Where actual hours worked is used, there is also a third category for people who are employed, but not at work in the reference week.
Where hours worked are not collected, full-time/part-time status is based on the respondent's perception of whether they work full-time or part-time, however this method is not considered a standard. Guidance can be given to refer to a 35 hour per week threshold to be full-time.
In business surveys, full-time/part-time status is collected for employee jobs. Full-time employee jobs are defined as those where the occupant normally works the agreed or award hours for a full-time employee in their occupation. If agreed or award hours do not apply, the job is regarded as full-time if the occupant usually works 35 hours or more per week. Part-time employee jobs are those where the occupant normally works less than the agreed or award hours for a full-time employee in their occupation. If agreed or award hours do not apply, the job is regarded as part-time if the occupant usually works less than 35 hours per week.
In comparison with the estimates of full-time/part-time status from the Labour Force Survey, other household surveys result in lower estimates of persons employed full-time, and higher estimates of persons employed part-time. This is because other household surveys do not include a question on actual hours worked in the reference week, so it is not possible to include persons who usually work part-time, but who worked full-time hours in the reference week, in the estimate of persons employed full-time. Usual hours worked is used in other household surveys because it can be meaningfully asked of all employed persons, whether or not they are at work during the reference week. Asking only one question for hours worked minimises the size of the question set and avoids complex sequencing.
Full-time/part-time Status is collected in the following surveys:
ABS measures of employment arrangements are collected from a number of sources, and include the following aspects:
There is no single definitive measure to determine the number of people in casual employment at any one time; however, the ABS most regularly uses information on paid leave entitlements as a proxy for measuring casual employment in the Australian labour force. The ABS has three data items related to casual employment:
Paid Leave Entitlements
The ABS uses 'employees without paid leave entitlements' as the primary measure of casual employment. This is an objective measure that can be collected consistently. An employee with paid leave entitlements has access to either paid holiday leave or paid sick leave, or both. An employee is considered to be without leave entitlements if they identify as not having access to either paid sick leave or holiday leave, or did not know their entitlements.
In lieu of paid leave, some casual employees are entitled to a 'casual loading' - a higher hourly rate of pay to compensate for not being entitled to paid holiday and/or sick leave. Survey respondents are asked whether they receive a casual loading, however around one-third of respondents report not receiving a casual loading, despite being without leave entitlements. This may be the case, or may reflect a lack of awareness that a loading is included in their pay. In some households, responses are provided by one member of the household on behalf of other members, and the respondent may be unaware of whether a casual loading is paid to the other household members.
The third data item used to consider casual employment is whether the survey participant considers their job to be casual. This question is asked in order to provide a different perspective of casual employment. Casual work is often viewed as less secure than other types of employment, as there may not be a guarantee of ongoing work, and hours of work may vary based on availability of hours offered by the employer. These are common characteristics of casual employment, but they apply to casual workers to varying degrees, and may also apply to non-casual workers. An employee's perception of whether or not their job is casual may be based on commonly recognised features of casual employment such as these, and may or may not reflect the actual conditions of their employment. For example, an employee may perceive that they are guaranteed a minimum workload per week, but this may not align with their employer's understanding.
Despite variability in the experience of casual employment, the vast majority of respondents' own perception of their casual status aligns with whether they have access to leave entitlements. This indicates that access to leave entitlements as a measure of casual status provides a definition that is broadly aligned with a general understanding of casual employment.
The following ABS household surveys collect data on measures of casual employment:
In addition to the household surveys, the Employee Earnings and Hours business survey also collects information about whether an employee is casual. In this survey, employers are asked to identify whether the employees selected in the survey are casual, and in conjunction they are asked whether these employees receive a casual loading or a higher rate of pay to compensate for a lack of leave entitlements. Information on employees is collected directly from the employer's payroll records, and this is an alternative way of looking at casuals as in this survey they are identified as such by their employers.
Independent contractors are sometimes referred to as consultants or freelancers. The term 'contractors' is also frequently used, however this is a broad term that is often used to describe people with a variety of forms of employment, for example, not only true independent contractors, but also employees engaged in short-term or fixed-term work, often engaged through a third-party (e.g. a labour hire firm/employment agency). The ABS measure of independent contractors refers to people who are not employees, but who may be operating in a similar manner to employees.
Questions in the Characteristics of Employment Survey (COE) identify the key characteristics of independent contractors. These questions are:
The following decision table shows how people are classified as independent contractors.
Table 4.2: Decision table for Independent Contractors
Information on independent contractors is collected every second year from 2014 as a rotating questionnaire module in the COE survey. Information prior to 2014 can be obtained from the Forms of Employment Survey (cat. no. 6359.0).
EMPLOYEES WORKING ON A FIXED-TERM CONTRACT
A fixed-term contract is an employment contract which specifies that employment with the employer is not expected to continue beyond a particular date or event.
Data classifying employees of businesses as permanent, fixed-term contract, or casual are available from the Survey of Employee Earnings and Hours (EEH).
LABOUR HIRE WORKERS
Instead of contacting employers directly, some people engage the services of a labour hire firm or employment agency to act as a third party to assist in finding suitable employment. Similarly, some businesses use the services of these firms to source labour rather than directly engaging workers.
Labour hire firms and employment agencies are engaged in personnel search, or selection and placement of persons for an employing organisation. Such firms may either match employees and employers directly, or might provide labour through their own pool of employees.
Labour hire firms and employment agencies perform a number of functions in the labour market, including maintaining a pool of potential employees, matching a person directly with an appropriate employer, and assisting employers to source suitable staff. They often also bear employee labour costs, such as wages, workers compensation and superannuation, which are transferred to employers through service fees.
Information on labour hire workers is collected every second year as a rotating questionnaire module in the Characteristics of Employment Survey (COE).
JOB STABILITY AND FLEXIBILITY MEASURES
Measures of job stability complement measures of hours of work, full-time and part-time status, and other classifications of jobholders (such as status in employment), in order to further describe the nature of employment conditions. The ABS collects a range of data items related to job stability and flexibility. These include data on the variability of earnings and hours from week to week, whether an employed person has guaranteed minimum hours, and whether an employed person is required to be on call or standby.
Job flexibility measures include whether employees had an agreement with their employer to work flexible hours, whether they usually work at home in their main job, and the main reason for working at home.
Data on perceptions of working arrangements are also collected. These include measures such as expectations about job tenure (for example, whether an employee expects to be with their current employer in 12 months’ time).
Estimates on job flexibility and stability are available from the Characteristics of Employment Survey (COE).
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