Permanent employment

From CEOpedia | Management online

Permanent employment is a type of employment contract in which the limits of service are not established, which means that the contract does not have a duration. Although there are different definitions depending on the country or culture in which one lives, the following words sum it up perfectly; “workers who work all year and have an expectation of continuing employment” [1].

Permanent employment belongs to a group of employment contract types. According to the Spanish SEPE (Servicio de Empleo Publico), there are three other types of employment contracts[2]: temporary contract jobs, training and apprenticeship contract jobs and trainee contract jobs. It could be said that temporary contracts are at the other end of the spectrum from permanent contracts, which is why it is necessary to define them. As mentioned above, in contrast to permanent employment, temporary employment establishes an end date in an established relationship between the employer and the employee. “Temporary work may cover many types of employment including seasonal, contract, casual, fixed-term, etc."[3]. Nowadays, this type of work is directly related to job insecurity.

Labour market flexibility

The globalisation of the world we live in has its advantages and disadvantages. As far as the world of work is concerned, the globalisation of the economy has brought great changes. Due to the damage that the crisis of the seventies left on the world of work, namely the high unemployment rate, governments took measures in order to turn the situation around. The measures taken were aimed at making the labour market more flexible, which meant less strict measures on contracts in order to encourage job creation. In the words of the OECD "the relaxation of the constraints to the use of temporary employment contracts, and the measures curbing firing costs and making easier the individual and/or collective dismissal of permanent workers, would help to accelerate the employment creation and to reduce the unemployment rates"[4].

As far as the labour markets of European countries are concerned, temporariness is the prevailing characteristic. According to Eurostat's European Union Labour Force Survey, in 2018 temporary employees accounted for 14.2% of all employees in the European Union and 16.2% in the Eurozone[5]. These rates of temporary employment compared to permanent employment are mainly due to two reasons; on the one hand, countries that live from sectors that only work in certain seasons of the year, a clear example is Spain with tourism. And on the other hand, as we have already mentioned, the existence of laws that encourage temporary work as opposed to permanent employment[6].

Lifetime employment in Japan

Although we have tried to give a definition of permanent employment that includes as many countries as possible, there are countries that at certain times have not identified with such a reading of permanent employment. Among the most famous exceptions is the case of Japan. The concept has undergone changes since its inception around 1910. Trade unions fought to improve workers' conditions and to hold companies accountable, so around the second half of the 20th century it was redefined, taking the following form: : Workers become employed right after their graduation from school with a particular company. The employer will not lay off his workers if possible even in the course of depression . The employee in turn will not quit his job at this company but tend to continue working there until he reaches his retirement age[7].

Footnotes

  1. ↑ Allan, C. (1996), p. 234.
  2. ↑ SEPE (2022).
  3. ↑ Webber, D. J., Pacheco, G., & Page, D. (2015), p. 2.
  4. ↑ OECD (2012).
  5. ↑ Eurostat (2018).
  6. ↑ Arestis, P., Ferreiro, J., & Gómez, C. (2020), p. 5-6.
  7. ↑ Kazutoshi, K. (2012), p. 1.

References

Author: Iñigo Arin

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