Is it just me or is employment becoming much more contract-based?
By - KoalaBJJ96
The casualisation of the workforce is a massive trend.
Businesses are seeking to limit their opex and headcount liabilities for permanent staff, so contractors are typically used first.
I reckon it's fucked, and I see it everyday, but I understand the commercial logic.
I think the brain drain it creates and the lack of long term commitment and investment of the workforce offsets this commercial logic. It isn't good.
>and headcount liabilities for permanent staff
The FWA was the catalyst for this. "Unfair dismissal" is the literal go-too for anyone who gets terminated, and the FWA placed the burden of proof on the employer to *prove* it wasn't such a termination. Prior to this the affected employee had to prove they were dismissed unfairly.
So once someone is permanent, they more or less are actually permanent until they either:
1. Quit (find another job)
3. Fuck up in such a deliberate & destructive manner that the conduct is indefensible in court.
4. Get made redundant
It’s not true that the FW Act shifts the onus of proof for unfair dismissals. It’s up to the employee to prove that they were unfairly dismissed.
I am an employment lawyer who acts mostly for employers. The mythology around unfair dismissal laws amongst small, medium and even some large business owners/management is astounding. While there are some Fair Work Commission members that sometimes make fairly whacky decisions, for the most part these are the exception and not the norm.
There is a reverse onus of proof in a different cause of action known as “adverse action” or “general protections.” The FW Act broadens the list of triggers that employees can rely upon to establish adverse action (in my opinion too far), but the underlying concept of a reverse onus is not new and has been around in some form or another for over 100 years.
The FW Act isn’t perfect, but perpetuating misconceptions around the unfair dismissal jurisdiction is actively harmful when it comes to helping both employers and employees to understand their rights and responsibilities.
Thank you for your input, much appreciated.
Interesting hearing it from an employment lawyer.
So more or less the onus of proof can be placed on the employer under the right circumstances and the FWA broadened the set of circumstances this was possible but did not actually flip it over to the employer by default in a blanket sense covering all "unfair dismissal" cases?
Appreciate your comments, but too many times people can make claims without proof but the employer has to provide proof that they've lied. It costs a massive amount of time and money for an employer to prove innocence while an ex employee can flat out lie without any consequences and just walk away if they lose.
> It’s up to the employee to prove that they were unfairly dismissed.
Surely the way it usually works is:
W: "I was unfairly dismissed"
E: "No you were dismissed because of your performance"
At this point the onus is the employer to prove that their performance was unsatisfactory.
> The FW Act isn’t perfect, but perpetuating misconceptions around the unfair dismissal jurisdiction is actively harmful when it comes to helping both employers and employees to understand their rights and responsibilities.
Everyone's familiar with a string of patently absurd cases, like the QANTAS alcohol theft one. If you can't fire someone for stealing from you even when you've explicitly written it in the contract and followed the correct procedures, of course you can't fire someone just because they're a bit shit at their job.
I've never ever seen anyone dismissed for performance. I've never heard of it happening. I don't think employers even contemplate doing that. Much easier to bully someone (usually during performance management) until they voluntarily leave than try to prove in a court that someone is so incompetent you had to fire them.
QANTAS won that on appeal within the Commission. This shows that indiscretions of small financial scale still qualify as grounds for dismissal so long as the employer follows due diligence. Stealing $20 of alcohol ended this man's career and being 50 will likely never see particularly gainful employment again. This also despite the other circumstances originally noted.
QANTAS and other employers should cry rivers more often, seems to work a treat.
If you've never seen anybody dismissed, you're in a forgiving environment with lenient bosses.
I've seen people dismissed, but not for performance. If you're not showing up for work or breaching safety procedures or whatever you can get dismissed. But being a bit crap at your job? No chance.
Maybe some employers will use probationary periods to fire those people, but after that it's much too difficult. You basically have to spend months collecting evidence that the employee is under-performing, while constantly giving them meetings and support etc. Then even if you do the performance managing perfectly, still a chance to lose given the way the FWC works, plus the legal costs get you either way.
>But being a bit crap at your job? No chance.
It's virtually impossible to terminate someone who is a "shit worker"
Btw I remember the case about an employee in Albury refusing to wear PPE. Flat out refusal. In an era of OH&S awareness.
The company went through the whole disciplinary action process correctly, which was acknowledged by the FWC yet they reinstated the employee because termination was considered "harsh" given the man had a low chance of being employed again in a similar workplace.
WHAT THE ACTUAL FUCK.
> which was acknowledged by the FWC yet they reinstated the employee because termination was considered "harsh" given the man had a low chance of being employed again in a similar workplace.
I've seen this multiple times. The logical conclusion is that you can only fire people for incompetence if they're highly employable, which they're naturally never going to be if they're incompetent.
Or are made redundant (paid out).
It does mean they can't hire someone in that position for 12 months iirc
That’s what the rules say but in reality the Sysadmin title just gets updated to Systems Engineer and Developer gets updated to DevOps engineer and the business just pretends it’s a different role.
Making other people redundant is the reason my role title has gone from analyst, to advisor, to lead, to consultant, and back to advisor over the last 5 years.
Yes, forgot to add, might get around to it later. Thank you.
Beat me to it.
Or 5. Sack everyone, phoenix the business and start again
Strongly disagree. I worked for government. They had 11 breaches of my contract and multiple other peoples contracts of people who were let go at the same time. The power is very much with the employer
Did you speak to a lawyer?
Multiple. The onus is on the employee not the employer was the clear notion. I was told I would win the case but after spending anywhere between 50-200k on legal fees along the way. Basically if I won, I might (if I was lucky) break even. If the employer dragged on the case (which they typically do), then the fees would add up quickly.
Even with self representation, the costs were looking to start at 25k with much lower chances of winning
Had some problems at work recently, been there a good few years, no problems before, well regarded employee but recently had a serious incident from a drunk abusive boss who has a reputation for a temper.
From my research I came to the same conclusion. If it came to it and I went legal it’s a bunch of fees I can’t afford as my companies pockets are deeper than mine so at best I might break even financially with a bunch of mental stress on top, worst I’m in a debt of legal fees and the stress of that on top.
On top of that I discovered there is a fair work high income threshold which is $153k. That means if you earn $153k or more you loose a bunch of legal protections/rights because you earn more! I can understand loosing any financial/legal support due to high pay but loosing legal protections seems a huge fuck you for being a high performer.
It was pretty clear unless my issue was resolved quickly the best thing I could do is leave and move on as financially and mentally there is nothing to gain except winning the principal of the matter.
Are you implying that the FWA was actually a bad thing for permanent employees?
I'm not having a dig, just curious as I've seen some amazing bosses get completely shafted by some bad employees and vice versa. Not all bosses are out to milk every cent from employees and not all employees want to get paid for doing fuck all.
I sometimes feel like to laws and regs punish the good employers/employees to try and stop the exploitation of/by the shit ones.
I don't know very much about the intricacies of Industrial Relations, but I do know that the use of enterprise bargaining agreements have declined significantly over the past decade
>Agreement coverage has declined to just 11 per cent of the private sector workforce in recent years, half what it was six years ago. (https://www.afr.com/work-and-careers/workplace/mcdonald-s-exit-from-enterprise-bargaining-marks-system-in-decline-20191220-p53ltd)
As a consultant, it seems to me that most companies would rather bring in consultants than hire into positions. We charge a fortune but we are easy to get rid of. Even more so in areas with strong unions
>A business exec told me that he thinks of consulting firms a bit like Charlie Sheen thinks about prostitutes. When I asked him to explain, he said that when Sheen was being sentenced for using a prostitute, the judge asked him why a man like him would have to pay for sex. And Sheen reportedly replied: “I don’t pay them for sex. I pay them to leave.” The exec went on to explain that he prefers hiring business consulting firms that also do their jobs and then leave.
Or in the case of cost saving headcount reductions - as a scapegoat. "Its McKinsey's fault"
I see you have played consultant blamed redundancy wave knifey spooney boogaloo before.
This is definitely true of some clients
Exactly - it’s never spruiked, but much of the revenue growth in ‘consulting’ practice areas (and even in areas like risk advisory) is staff augmentation under multimillion dollar contracts grinding out process work (the ‘body shop’ model) rather than high flying strategy consulting as it’s made out to be.
>Are you implying that the FWA was actually a bad thing for permanent employees?
Not exactly, I'm saying that if you are a permanent employee then you are so well protected by the law, that it disincentivises business to make employees permanent.
In that context the law is good for you as a permanent employee, once you've managed to become one.
And I agree with the rest of your comment, thank you for sharing.
Is this true or is this just a narrative businesses like to put in place?
Look around at how many positions are casual and fixed term. This is absolutely a trend. To what extent they interlink is up to interpretation, but when I weigh the evidence it seems pretty clear that the perception that poorly performing full time workers are hard to get rid of has lead to people looking for work arounds. I know absolutely when I worked for a regional Council this was a consideration and personally as a small business owner I think very carefully about putting anyone on fulltime because it could be really expensive
I definitely see them moving from permanent to casual but the things stated here are plainly false at times. The awarded post claims the onus is on the employer, legally speaking this is false.
On top of that, this isn't just an Australian phenomenon, it's happening globally. In Australia we have better workers rights than a lot of places (and I see a lot of people blaming this) but what then becomes the justification for it globally in places these protections don't exist?
I believe the reason is often to do with the way we work and projects are oriented as well as the balance sheet. In terms of how we work, growing Tech has allowed for more speed/efficiency and projects are managed accordingly. It's more of a get in get out approach and with better management tools available, it's easier to manage getting rid of employees in a companies down time than ever before. This would have happened decades ago had they had efficiency driven systems available too. Balance sheet wise, investors tend not to like fixed costs.
More and more work is being classified as "project work" and hiring practices have been accommodated around that. A typical example/argument is "when you build a house, you hire at the best builder you can, they build the house and when they are finished they hand you the keys and leave. The same can/should be applied to projects, hire the best to do the project and when they are done they leave".
Depending on who you ask this is either spot on, a misapplication or just plain "use them and dump them" abuse. Like any approach, it works for some people and it doesn't work for others. Some people find this a very attractive way of working since you can go after the work that you like and make more money (even if for short periods). If you are established in your profession and don't mind doing networking and possible periods of unemployment then this can give you great job satisfaction. Ofcourse if you are not well established you are left in a more vulnerable position. I know people in both situations.
I don’t know where this misperception comes from.
People are actually very easy to fire if you manage the situation properly (which is also pretty simple).
I think the reality may be that we have a load of shit managers that don’t know how to do their jobs and actually manage their staff.
Poor performance is a management issue first, employee issue second; and if you follow this idea there is little chance of an successful unfair dismissal claim, especially (and remember the onus IS on the employer to prove unfairness despite what dipshits say) since the FWC is mostly stacked with liberal appointees (their mates from big industries like mining who want a sea change usually).
This is like the employer version of those numbskulls who Muslims want to ban saying Merry Christmas.
I found the liberal voter guys
Way to maturely add to the conversation. No I don't vote liberal. Perhaps try searching my years long comment history rather than trying to attack an idea with invective.
It was sarcasm man. Yeesh didn't think I'd have to explain that in here
Even, worse it's so hard to get rid of garbage employees. I work with a few that have no business doing the job they are hired for. It forces the rest of us to pick up the slack
Hard but not impossible. You can do it you just have to document and draw out the process. Keep records and track how they are failing to meet the requirements, give multiple warnings etc. And by the end you will have done all of the process to prove they should be removed.
I am as left as they come and even I have cringed at some of the "unfair dismissal " cases that have won. There needs to be balance. And now, here we are, with everyone on a contract.
It’s usually shit management that determines these cases. Managers don’t know how to manage staff, particularly with performance issues.
Underperformance is a management issue first, employee issue second. Meaning address it with support/improvement mechanisms first; blame and fire after. They often make inadequate attempts or no attempts to address this with the employees before moving to fire them.
Australia’s working culture being ruined by managers either too conflict oriented or conflict averse to deal with problems (the job of a manager). Comes down to port emotional intelligence.
Bad management/leadership is pretty common everywhere, from straight nepotism to jobs for mates, to lazy hiring practices to hiring in desperation and perhaps the worst one of all: promoting beyond people's capabilities. This last one is usually out of a sense of loyalty, an effort to reward a good worker or a misguided attempt to "promote internally".
A maxim someone taught me when I was starting my career was "A good widget maker does not necessarily a good widget maker manager make". Most great widget makers are actually pretty poor managers because they (correctly) believe that only they can do "it" right, and hence they don't delegate well and become little micro-manager tyrants.
I don't think it's particularly unreasonable for a regulatory body to put the burden of providing a reasonable excuse for firing someone on the employer. This is an asinine way of looking at the issue.
Sure, you can hold that belief. However the employers don't want that kind of liability so they'll just hire more casuals. At the end of the day, the market will largely still function off supply demand and forcing certain issues with legislation means companies will have to cut corners in other areas.
Casuals are different to contracts. Employers generally don't like casuals, there's a penalty rate, workers are unreliable, can refuse shifts and the employer has to offer a permanent position if the employee has regular shifts for 6 months.
Contracts are another issue, IMO the maximum length of re-issuing contracts should be 3 years. At the moment you can be on a contract for max 2 years, but you can receive several serial contracts from your employer of up to 5 years of total employment on contracts. I think this is the bigger issue.
> employer has to offer a permanent position if the employee has regular shifts for 6 months.
is this legislated? my wife has been working the same casual shifts for 5+ years and has been asking her work about being made permanent but they continually brush it off. Id love to produce a peice of legislation here
I was only made permanent after 2 years. I knew they were supposed to make me FTE after the 1st year but I didn’t wanna get fired for raising my rights cause I needed the job. The “perks” of being a casual hey?
At the end of September it will be legally mandated for regular casuals of 6 months or more to be offered a permanent position.
Do not tell her employer before hand. They will start looking for ways out if they become aware (most employers know fuck all about employment law)
That's true,. It wasn't the previous ruling after a year of employment, so wouldn't OP's girlfriend still qualify?
Grey area until tested by my reading (I’m not an expert). I would hope so but am cynical about the arbitration systems judgment. Given it was the previous legislation but current legislation says something different it is basically arguing to have an old version of the Act applied to current circumstances. Bit if a black hole but I’d love to be proven wrong. My guess is it will depend on which Commissioner hears the case.
Google fairwork Australia and search for casual being made permanent. If after 12 months of employment with essentially the same shifts you ask in writing for permanent work they need to state I writing the operational reasons why they won't convert the position. That's from memory so obviously read the specifics of it, but in theory you would have a good case for conversion
>the employer has to offer a permanent position if the employee has regular shifts for 6 months
Not even true for government positions.
? It is true? Previous rule was 12 months but I believe it's being changed to 6 months.
>Casual employees who have worked for their employer for 12 months need to be offered the option to convert to full-time or part-time (permanent) employment by their employer.
Government employees don’t fall under the Act for the majority of things and mish mash a bunch of different legislation to the point it is meaningless to their workers. It’s a shot show legally. It’s basically the governments way of refusing to be governed
In theory there are a bunch of rules but in reality almost all of them have ways around it.
It’s not true.
The onus is on the employee to prove unfairness
Edit: misspelled employee as employer...
Yes which is why they just won't hire permanents because it's too hard to fire them if they suck.
Apologies, that should have said onus on the employee!
Autocorrect spreading bullshit now.
Repeat. Onus on the EMPLOYER for anyone reading
Yet it’s not true.
The onus is on employees to prove unfairness
What would be the benefit of being permanent if you can be terminated at will?
There's no middle ground?
I can’t really see one to be honest. Contracting you trade security for money, being perm you trade money for security.
4-Have their position made redundant that’s advertised again under a slightly different title.
This is spot on, Over my working carrier I have seen faster and faster moves to offshoring then when that did not work out, contracting and the brain drain you mentioned is something that really stuns me, there are companies out there that are doing thing worse due to this then they did twenty years ago, all in the name of cost reductions to meet quarterly targets.
A lot of contract workers would actually be seen as permanent employees, they just aren't challenging it in the courts. You need a fixed duration defined project, at a minimum.
I reckon a contributing factor has also been the attitude of employees, in certain fields at least.
As a software developer it can be quite common to change jobs every year. It’s usually the best way to get a significant pay rise. Staying with a company might get you a 5% yearly bump, but a years extra experience on your cv can easily translate to a 20% raise at a new job - especially for junior or mid level people.
Being a fairly well paid profession, it’s also common for young people to earn enough over a year that they can afford to take three months off to travel or work at a startup. No permanent job would allow that, so you just jump ship and hope you find something else which if you’re half competent you will.
Smart employers have realised this and cater to this by investing less in permanent employees and transferring that money to short term benefits like staff lunches and beer fridges and table tennis tables to create an environment that can attract the best of the churn employees for a while.
There’s a big part of society that embraces these new freedoms and eschew traditional structures like marriage, picket fences and four weeks off a year in Bali.
I’ve worked for 14 years as a casual for the same company. I was paid a competitive rate but was free to work as much as I wanted. And there was always work as well as the flexibility to step away and do something else. There was never a question of them abandoning their employees and their employees respected their freedoms and contributed as much as was needed without taking advantage of the situation.
I realise now that I’ve moved on how different the world outside is and now have to adjust to a standard 40 hour week job. It will be an interesting experience.
I strongly disagree. This 20th century view that you work one job / company for life is pretty toxic and does not allow us to build competitive skills at the individual level. Network effects of working different jobs are quite strong and there's a lot of data that shows that those who switch jobs often earn the most.
Companies also prefer it as they don't get limpet personnel who clock in at 9 and clock out at 5 and have little incentive to do anything beyond the bare minimum.
Contractors and consultants earn much more than permanent as the flexibility helps the employer, and the variety makes them more productive.
Thanks for your input and considered reply.
I am speaking as someone in a senior position, has worked at multiple tier 1 companies, has hired contractors and permanents, and watched the shift to outsourcing over the last 15 years (and engaged in it myself). Definitely not a limpet!
There's a time and place for it (such as a skillgap, the need to quickly get a body in, etc), but I think the pendulum has swung too far towards casualisation. I see shit quality, increasing net costs, and general workforce dissatisfaction, all in the name to get opex quotas down.
The e2e business position generally worsens from this.
We should be looking to embed and being devops back into our businesses and giving API and IT stack control to people with a vested interest long term in a quality product, and focusing on automation to optimise costs (and doing it from the start so you limit the need for later redundancies).The race to the bottom for casualisation isn't good.
> all in the name to get opex quotas down.
Given contractors earn more than permanent, I don't know how this is possible.
The motivator is not to cut costs - since a more casualised workforce is more expensive. It's an easier way to drive quality as you can swap out unproductive contractors, and - to be frank - the incentives are more aligned on the contractor side, knowing you won't be renewed if you don't deliver.
I don’t think you can compare the take home pay of contractors vs permies at face value. A permanent employee has a lot of costs that aren’t obvious.
The higher hourly rate a contractor gets is mainly to compensate them for not getting paid time off, long service leave, sick time and a certain level of risk coverage. However, I get the impression you can get close to paying double the take home rate of a permanent employee and still come out on top.
State government here (QLD) almost exclusively hires on fixed term contracts. From what I've heard, you only have to be more than slightly good at your job and it's almost certain to be extended.
I work for QAS and lots of staff are going on 12 month contracts as 'flexible work agreements' where they negotiate a roster with their region. At the end of the 12 months you can either renegotiate or go back to your old position. The catch is that 2 years of FWA and you lose your established position at a station. The suspicion is this might extend into 'take it or leave it' contracts, especially with all the news stories about resources and ramping, which could make a lot of staff really unhappy.
Having a contractual or casual workforce could suit a new deployment model where staff just get told to go to a station without caring about travel or inconvenience. Creates a lot of other issues too especially for staff morale.
I was referring more to administrative / office based public servants, hadn't even considered that this was also applying to front line / first responders.
Sounds shit. You'd think of all the public servants the government would want to keep happy it would be the first responders, especially Ambos / paramedics who I imagine could take their skills almost anywhere in the world.
Sadly we can't transfer elsewhere except for other states, and QAS is (IMO) the best service to work for, or at least on par with Victoria. There's also a private sector but they only take either top tier paramedics, or they're dodgy private contractors who shouldn't really be in service. Not much international recognition either (except UK, pre-COVID).
The FWAs initially were really good for staff and seen as a positive policy, but like most things it's causing problems now (and some people are outright abusing it), so something has to give. The simple solution is everyone goes back to their core rosters (and there's change coming there too) or accepts the new terms. It'll be interesting to see what happens over the next 12 months.
It’s also happening in nursing/medicine. Almost impossible these days to have any form of permanent position in Qld health in a speciality area unless you’re lucky enough to have worked there for many years with the contracts being extended. I believe a number of the NGOs are heading that way as well. It causes so much anxiety as when your contract is coming up for renewal you still have to put 100% into the job. It’s peoples lives/health at risk whether you’re renewed or not. It’s soul destroying.
I have to refinance my home loan next year and I’m genuinely afraid of what will happen now I’m on contracts if nothing permanent comes up
Oh and our contracts don’t pay any more than permanent staff...
The fact it doesn’t pay more is ridiculous. The benefit of being on a contract is supposed to be exchanging security for more money.
Right! It makes no sense.
However I love this job so much more than my previous one so just gotta tough it out and hope for the best!
>especially Ambos / paramedics who I imagine could take their skills almost anywhere in the world.
It's a pretty niche profession with only a handful of countries having the same level of professional education that we have for paramedics.
I have learned the hard way a really awesome job that is very niche can be a dead end career..
And at 31 I’m trying to change to an apprenticeship in construction as a result.
Yup, I'm on my 4th extension
> State government here (QLD) almost exclusively hires on fixed term contracts. From what I've heard, you only have to be more than slightly good at your job and it's almost certain to be extended.
Except for the introduction of the Debt & Savings Plan where pressure is applied to every section to save money, thus some contracts are being terminated. Or the person is and that funding is put elsewhere. It’s now more precarious than ever to be a non-frontline FTT in Qld Govt. And you *always* have to be performing better than your colleagues.
I can confirm this. A lot of AO2 which really should be AO3 positions are advertised through recruitment firms, usually they want you to start immediately. Some projects might only last a few weeks. I've had a few calls from recruiters asking if I was interested in an AO2 data entry/records admin role but it's only for 1 month. Like WTF! I've been job searching for a year now since coming back from overseas. If you're lucky you can find a casual contract for 3 to 6 months with a possibility of extension. I'm guessing this is the only way to get a foot in state government.
Even teaching roles in Brisbane state schools are on 6 month contracts. It's ridiculous! After 3 years of being in these short term contracts then they should give you a permanent role.
The worse part is often you are covering for someone on secondment who hasn't worked their permanent position for years. So they can't give you the job because the person who holds the position is off advancing their career in another contract role.
Well there is also a hiring freeze on which means they're only allowed to put people on temp contracts.
From my recent experience of refinancing mortgage, the bank seemed to be ok with fixed term contracts as long as I'd worked for more than three months on the job and there's a loose outlook/promise of extension or transferring to permanent (didn't even ask for proof). Bank didn't consider overtime payment as "regular" income though. Just my 2c.
There’s a bit of variance between lenders, & they treat refinances differently to new loans. Sounds like you had a really good experience.
I had the same good experience with a first mortgage, specifically through Commonwealth. Smaller banks definitely have a different risk assessment, though: I didn’t have the option to even apply, because at least some don’t cover my area.
I contracted for 10 years… more money, more diverse experiences… but I’m glad to have finally joined the full time club in my 30’s
Yeah, it’s become more and more common for industry accounting positions. There are actually fixed term positions as short as 4 weeks at times.
4 weeks.. wtf
It takes a week just to figure out where the toilet is, and at least another week to learn everyone's names.
By the time you've got that out of the way, you're already in "fuck it, I'm gone in two weeks" mode anyway.
Usually the shorter contracts like 3 and even 6 months turn into rolling contracts. These will be renewed till the project is completed.
It is a head scratcher. I’m kind of tempted to apply just to get to the interview to tell them they are dreaming.
>of staff are going on 12 month contracts as 'flexible work agreements' where they negotiate a roster with their region. At the end of the 12 months you can either renegotiate or go back to your old position. The catch is that 2 years of FWA and you lose your established position at a station. The suspicion is this might extend into 'take it or leave it' contracts, especially with all the news stories about resources and ramping, which could make a lot of staff really unhappy.
>Having a contractual or casual workforce could suit a new deployment model where staff just get told to go to a station without caring about travel or inconvenience.
It's fucked up. I was in a 2 week data entry role with QLD electoral Commission last year during the election period. Basically the agency just let recruitment firms hire a whole bunch of people under short noticed. Some people who started a few days after me were extended on a daily basis cause QLD EC didn't know how much work they would have. It's kind of understandable for this type of work to be short term but imagine if you're being extended on a daily or weekly basis and not knowing if you have work the next day or next week. It's stressful.
It’s definitely a thing in IT.
I make wayyyyyy more contracting than I ever made as a permie though so I’m not fussed. My wife also contracts and we run everything through our own Company, which provides additional tax benefits/flexibility.
Honestly we’ll likely never go back to perm. Annual leave, sick leave etc, are just not worth the significant reduction in compensation.
You know how I know you're a specialist in IT?
Contracting at the lower end, you get totally fucked and make less than the perms on site.
That's fucked. I'm not particularly well paid but I'm still a good 30-40% over permie rates
I'm talking entry and second level it work. They exploit just like any regular old shelf stacker job.
Pay low, flexible to fire, no sick days or holidays, paid less than the perms.
I've done it many times in the past, there's no "that sucks, go elsewhere!" That's the gig at the bottom end.
If you're not earning more contracting, why are you doing it?
Contracting in my experience is better pay, offset by not having as much job security or sick/annual leave etc.
I'm gonna guess to get a foot in the door.
I did the same thing a few years back.. contracted on a helpdesk at $28/hour when the perm staff earnt $32/hour.
But it got E the contacts to get a better job with the employer, now on about 45/hour.
I hated working for that shit money as a contractor who hated public holidays, but it was worth it in the end.
Because there isn't a choice, is usually take a contract, or don't get a job.
I haven't experienced that and I work in I.T, but I accept your experience may differ.
Not from what I’ve seen either you know of or accepted a job that was a rip off..
Unlikely, unless it was with one of the Indian based MSPs.
No, that's every MSP that exists.
Its not at all. Those that want to keep contractors should be paying 1/4 to 1/3 above the equivalent perm adjusted yearly rate.
This seems like a pretty sensible approach, which I may also look into. I hope you don't mind a couple of questions.
Is your wife in the same field? How do you structure the company in a basic sense? Do you have any other benefits to doing this that you could describe, and any major risks that concern you? Also, how's the work/life balance? Do you find yourself under more pressure _not_ to take leave as often?
- Is your wife in the same field? - not she’s in another non - IT related field and admittedly the difference between perm and Contractor wages is less than it is for me.
- How do you structure the company in a basic sense? Two directors , wife and me. I have occasionally subcontracted work out as needed when taking on extra work.
- Do you have any other benefits to doing this that you could describe, and any major risks that concern you? Extra cash flow is parked in our offset account. We choose how much we pay ourselves as a salary and either keep the rest in the company or pay as dividends. We were eligible for COVID stimulus. There’s a lot, but it really depends on your accountant.
- Also, how's the work/life balance? Better. I’m contracted for 8hour days and no more - so I don’t kill myself like I used to.
- Do you find yourself under more pressure not to take leave as often? No, occasionally (employer dependant) they’ll request you to take time off unpaid eg 3-4 weeks over Christmas.
Define significant reduction. In my role (non-IT) it’s pretty much the same pay, though the contractors don’t realise that or else they’d revolt.
30-40% more as a contractor.
This is obviously before doing any calcs around leave, entitlements etc.
How did you get started with contracting? Because it sounds like you really need to market yourself for businesses to want to come to you to work for them.
Most of the time they don’t come to you. You go to them by applying for contract positions via LinkedIn and Seek.
In my limited experience and knowledge, long contracts (3+ years) seem better than "permanent/on going positions".
With contracts at least you know when you're ending and it seems like employers are more likely to let your contract expire rather than terminating employment prematurely. Also, in the industries I know about, funds for contract positions are set aside and earmarked before they can be issued, instead of ongoing funding for ongoing positions which can change suddenly. I've noticed that redundancy or position changes happen very frequently for on going jobs and "permanence" don't really mean anything.
My experience, admittedly in IT and project based roles , has been a positive one. The teams I have worked with have, for the most part, been staffed with knowledgeable, focused and customer oriented people and they’ve been a joy to work in. I was freaked out at first with the switch, but I’d be reticent about returning to full time employment now.
Also there’s about a 40% bump in pay between permanent and contract for my role.
Yup it is has become common. Most of these jobs will roll over without issue but it allows the company to have flexibility.
The worse thing about contracting is the amount of time you need to invest in finding a new position.
I have tantrums about wasting my life job hunting instead of doing something more meaningful.
Some industries have agencies that will do this for you.
I've been moving from 2-3 year contract the last several years. Been quite seamless even in regional Australia (I'm not getting paid that much less than the big city). Just have a good network, reputation and lean your skill/learning/training towards what you think your next contract should be and you'd be alright.
I am moving from position to position but you still need to reconnect with everyone, apply for roles, do little let's meet interviews.
Friend of mine told me a story- they had 1 FTE doing a specific task as a subset of a full time role.
They were then made redundant.
All that persons tasks fell upon another team - of 2 people only
That team couldn't keep up with the legal notification requirements within regulations of the task im talking about. Resulted in significant $$ legal risk
So that 1 specific task, that was 10% of the persons role.. got converted into a 3 year contract for another company @ 600k cost.
200k per year.
2x the cost of the original 1 x FTE who was doing a lot more than 1 fkn task.
As long as you remember to pay your super and do your correct tax, contracting can be beneficial. The money is generally~15% higher than full time employment because they are in turn discharging a lot of HR Obligations etc such as long service leave and sick leave. When you're contracting you are ultimately your own boss so have to take care of everything
If you go through recruiting firm they will generally handle the super and tax for you.
I think a big part of the conversation isn't contractors but rather fixed-term contracts given in lieu of normal permanent positions. Rolling back to back 6 month contracts sure puts a lot of stress on you every 6 months. It doesn't even come with the extra pay.
I think 15% is on the low side of what you can expect in some industries. Particularly IT and medicine.
Yes most opportunities I’m getting are contract based these days , I always say no. It’s a very bad sign
You should get a much higher rate as a contractor
Fixed term contract doesn't equal "contractor" though, it just means your an employee with a fixed end date before you even start work.
Contacting demands a higher rate because you don't get any benefits (leave, super etc).
You are absolutely right, I got confused
Since someone brought up the topic, typically for a fixed term contract (1yr) how do u arrive at the comparable daily rate to a perm position. E. G if the perm package is 120k with super, what's the reasonable daily rate?
A fixed term contract is usually the exactly the same. Ive been on 12 month fixed term contracts due to my industry for 18 years. Exactly the same as permanent in terms salary eg. 150k + super, leave entitlements etc. Ive been with the same organisation for 13 years. Super, leave, including long service leave is all exactly the same. Its just some industry relies on unpredictable funding so cant offer permanency.
Thanks, I should have been clearer. Fixed term contract with daily rates and no benefits like annual holidays etc. Another member replied saying I should take into account 42 working weeks, which makes sense.
If it’s really a contract with no benefits, I calculate it as what the daily rate is if you work 44 weeks minus 9.5%. That accounts for 2 weeks sick leave, 4 weeks annual leave and 2 weeks public holidays.
I was just on a F-T contract which included annual leave and sick leave, but I worked 4 days a week. Recently just went to perm, went 5 days for the same salary (but now have a potential 20% bonus). So it was basically a 20% difference.
ah yes, the "potential" bonus factor is also there :)
Yeah. I won’t get 20, but I’m unlikely to get less than 10, so I guess it’s ok.
I know a lot of people who are perpetually on 12 month contracts. Must be absolutely fucked having a mortgage with no guarantee of ongoing work. I don't know how they do it.
Even if you are permanent there is no guarantee of ongoing work.
If you're permanent there's a guarantee of a redundancy at least.
That’s true, but in the first few years it’s pretty worthless anyway.
Has been going that way for years
My bank treated us pretty hesitantly when getting a mortgage because my wife is on a contract. She needed to gt written assurance from her mployer that the contract was auto-renewing and essentially permanent
Contract in my industry is 2x wages vs full time
I finished in 10 years ago and have never had permeant role. Longest contract was 3 years and shortest was 12 weeks. At no time in this 10 year period was I unemployed. In 2 weeks I start my first permeant full time role. I'm excited at the prospect of not moving for a while!
Employers will find it harder to avoid converting casuals to full time, contract employees are much easier to handle. No long term liabilities. No workcover, payroll tax or super guarantee. Pay contractors later than employees. All reasons to prefer contractors
I find it interesting that employees cry about a contract that lasts for 6+months. Maybe try being self employed in a trade where you actively have to go find work, quoting on jobs, meeting and greeting potential clients sucking ass and bending over backwards to keep them happy, having thousands of dollars outlaid and owed at any time. Think about that when you are wasting people's time getting 10 quotes!
I work as a contractor and I hire only contractors. I find that this kind of relationship leads to greater profits/pay for the skilful/smart/resourceful and less security for the less skilful.
Why people here suck a company's dick so much and think that FWA would hurt poor businesses but don't think about workers
I worked for a company that did this. The reason was that probation periods actually aren’t legal. Once you are hired you are entitled to all of the protections a employee has been there for years enjoys.
So the way they got around that was hiring everyone on a 6 month contract. If you passed all of your checks etc… only then would they make permanent. This is how they got a legal probation period.
Your first paragraph is incorrect. Probation periods are completely legal. https://www.fairwork.gov.au/employee-entitlements/types-of-employees/probation
I disagree - the Fair Work Act recognizes up to a 6 month probation period that removes the risk of an unfair dismissal claim unless the dismissal is unlawful ( discrimination etc). Termination during the probation period still requires notice ( 1 week).
If the moneys there to offset the lack of benefits (LSL, AL & SL) sure. But personally I would want at least 100% on top of the awarded wage to clmleno
I have contracted for the last 4 years after failing to secure a permanent job. Best way to do it is to find an accountant, form a company and contract through your company; collect gst, ge tbetter tax breaks, and instead of showing short term tenure to the banks you just show company financials for however long you've been operating. But yeah permanent jobs seem to be about finding the perfect friend for whoever is hiring, while contracting is much more about ability to do the job. I found I would be applying for perm jobs constantly and not get anywhere, but now I get at least one call per week for contract recruiters looking for my experience. And companys dont seem to unders te and the brain drain, I've finished contracts with a wealth of company knowledge and everyone just let's the contract run down like there is nothing they can do about it.
here's another curly one for you... starting new job and the contact says 40 hours, but 37.5
It's good if you're young and looking to build a wide range of experience
Ah yeah where have you been 🤷♀️ not to mention casualised
Additionally contract work can be accounted for as an expense rather than 'staff' or 'wages'.
Therefore it gives the impression that expenses can be controlled and lowered at any stage.
Have a look here when considering a contract role vs a comparable perm role.
In my experience as a contractor you tend to get treated as a resource and i don’t think it is a healthy trend for employees.
State gov employee
Once upon a time people were appointed by the governor which meant it was almost impossible to get rid of them. Then people were appointed for the term of the government, now people are appointed for 2-4 years depending on department.
We’ve had a lot of issues with specific people that they couldn’t easily get rid of so contracts seemed to be the best option
its also employees fighting against each other for casual or contract $ that looks nicer than the FT wage or salary with its otehr added protections or hidden $ benefits. globalisation has also made it easier to jump ship although nepotism is and always will be the biggest employer the world over.
government also does contracts and this is great to remove or move on poor performers (which does actively happen although it can be political as well, or opinion rather than fact or kpi based) yet there are still many in perm positions who really shouldnt have a job at all and just get moved around when after years people have had enough of them not being able to do their basic job or fuckup over and over again. I'd prefer a closer spread of wages in this country but we pay high for entertainment, or fake growth positions. doctors/pollies get good money yet its still high middle income compared to the real upper class of business leaders.
IMO it is the fact we kind of have to compete globally and so are forced to have no wage growth by neolibs and widen the divide of wealth inequality to have trade, employ the most awarded at the top etc. Id prefer a more closed off society and more equal footing across the board (not communism) but the cats out the bag and every nation competes with each other in the global capitalistic model.
Absolutely. I thought it was rare to get an interview, in reality it's rare to even find an opportunity that isn't a 6-12 month gig with no guaranteed continuance.
By 2027, 70% of Australia's workforce will be contractualised/casualised - study I read last month
Yes as someone in healthcare. I wonder how this will affect capacity to get a home loan?
From the perspective of a business owner, hirering someone with a permanently position can be a scary thing financially. Today’s consumerism means everyone wants the latest best product which is the highest quality at the cheapest price with best service, it’s super competitive and a lot of industry’s no longer have massive margins so bringing on too many people can feel risky.
I agree. More and more jobs are becoming temporary contracts and there is no way in hell I am believing them when they say you contract will be extended. I trusted them once and ended up getting contract not renewed during Christmas period and was left cold looking for a job to survive in Christmas shutdown period. Permanent is hard to find but worth it. Unless you have multiple jobs then temp contract is ok.