Evaluating the prevalence of employees without written terms of employment in the European Union
| Published date | 05 June 2017 |
| Pages | 487-502 |
| Date | 05 June 2017 |
| DOI | https://doi.org/10.1108/ER-10-2016-0189 |
| Author | Colin C. Williams,Aysegul Kayaoglu |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations,Employment law |
Evaluating the prevalence of
employees without written
terms of employment in the
European Union
Colin C. Williams
Management School, University of Sheffield, Sheffield, UK, and
Aysegul Kayaoglu
Department of Economics, Istanbul Teknik Universitesi, Istanbul, Turkey
Abstract
Purpose –Until now, there has been scant evidence on the proportion and characteristics of employees
workingwithout a written contractor terms of employment. To begin to fillthis gap, the purpose of this paper is
to evaluate the prevalence and distributionof employees without written contractsor terms of employment in
the European Union(EU), examining whether they are unevenly distributed across countriesand EU regions,
and whether it is vulnerable population groupswho are more likely to be without such written contracts.
Design/methodology/approach –A 2013 Eurobarometer survey comprising 11,025 face-to-face interviews
with employees in the 28 member states of the EU (EU-28) is reported.
Findings –The finding is that it is less socio-demographic and socio-economic characteristics, and more firm
size, institutional environment and spatial factors that are important in explaining the prevalence of
employment without a written contract. Thus, governments should address not individuals but rather the
formal institutional failings and asymmetry between civic and state morality, in order to reduce the level of
employment without a written contract, and focus their attention on smaller firms, larger towns and Southern
European countries, especially Cyprus, Malta and Portugal.
Research limitations/implications –Futureresearch needs to evaluatewhether and how theconditions of
employment (e.g. wage rates, health and safety conditions, holiday entitlements) of employees without written
contractsor terms of employmentdiffer to their equivalentswho have writtencontracts or termsof employment.
This will reveal the implications of workersnot being issued with written contracts orterms of employment.
Originality/value –This is one of the first extensive evaluations of the prevalence and distribution of
employees without written contracts or terms of employment.
Keywords European Union,Employee relations, Undeclared work, Laws and legislation, Written contracts
Paper type Research paper
Introduction
The aim of this paper is to evaluate the prevalence and distribution of employees without
written formal contracts or terms of employment. This is an issue that lies at the very heart
of the study of employee relations. Although such a practice is not everywhere an illegal
practice, it is widely believed that those without written contracts or terms of employment
suffer poorer quality working conditions, that such a practice weakens collective bargaining
and puts pressure on legitimate businesses to also adopt such a practice due to the unfair
competition facing them (Andrews et al., 2011; ILO, 2015; Williams, 2014). Based on this
assumption, not only has the European Commission since 1991 had a directive calling for all
member states to adopt written contracts or terms of employment as a good practice, but
legislative initiatives have been pursued in many countries to make it illegal not to offer
written contracts or terms of employment to employees. Until now, however, little is known
about the prevalence or distribution of employees without written contracts or terms of
employment. This paper seeks to begin to fill that gap.
Here, therefore, we advance understanding of those without written contracts or terms of
employment in three ways. From an empirical viewpoint, we report Eurobarometer survey
Employee Relations
Vol. 39 No. 4, 2017
pp. 487-502
© Emerald PublishingLimited
0142-5455
DOI 10.1108/ER-10-2016-0189
Received 12 October 2016
Revised 30 January 2017
Accepted 16 February 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
487
Evaluating the
prevalence of
employees
data from 28 member states to reveal the prevalence and distribution of this practice, an
issue which until now has been subject to very little empirical evaluation. Second, and
theoretically, we evaluate whether its prevalence and distribution reflects the long-standing
marginality thesis which views such informal practices as concentrated among
marginalized and vulnerable populations. And finally, and from a policy perspective,
we show how it is not individuals who should be targeted but rather, the formal institutional
failings and asymmetry between civic and state morality, in order to reduce the level of
employment without a written contract, especially in South European countries.
To commence, therefore, the next section provides a brief review of the previous
literature, highlighting the legal position regarding this type of employment, followed by a
review of the various alternative competing explanations for this practice and what the
limited evidence currently available suggests about its prevalence and distribution. To test
the resultant hypotheses, the third section then introduces the data used, namely, a 2013
Eurobarometer survey comprising 11,025 face-to-face interviews with employees in the
28 member states of the European Union (EU-28), and the analytical methods employed; a
staged logistic regression model controlling both for the country- and regional-level fixed
effects. The fourth section reports the findings regarding its prevalence and distribution
across the EU, followed in the fifth and final section by a discussion of the implications for
theory and policy, along with the limitations of the results and future research required.
Employment without a written contract or terms of employment: literature
review and hypotheses
For a quarter of century across the 28 member states of the EU (EU-28), the Employment
Information Directive 1991 (91/553/EEC) has stated that every employee (however, defined
by member state law) has the right to a written statement of the terms and conditions of
their employment. Referred to as “statements of employment particulars”, employers are
directed to give all employees a written agreement that Article 2 of this 1991 directive states
must include: the identity of the parties; place of work or employer’s domicile; title, grade,
category or nature of work, or a brief description of the work; commencement date;
for temporary contracts, expected duration; paid leave; periods of notice or method for
determining; initial pay; working time, and where appropriate, the collective agreement or
joint representation institutions. This information, as Article 3 states, has to be in writing
and cannot be changed without the agreement of the employee. The only exceptions, as
Article 1 states, are that this does not need to be applied to those working less than one
month or with a working week of less than eight hours, or to jobs of a “casual and/or specific
nature”if this is justified by objective considerations.
Nevertheless, although this directive suggests to member states what should occur,
legislation varies across member states in terms of whether there is a legal requirement to
provide employees with a written contract or terms of employment (see EURES –the
European Job Mobility Portal, 2016). A written employment contract is always required in
all East-Central European member states (i.e. Bulgaria, Croatia, Czech Republic, Estonia,
Lithuania, Latvia, Romania, Slovakia and Slovenia) except Hungary and Poland, in Nordic
countries (Norway and Sweden but not Finland), as well as in Italy and Greece. In all these
member states, the contract must be signed in advance or immediately after starting work.
In all other EU member states, although a written contract is not required, the employee
must be given written terms of employment and the mandatory content of the terms of
employment is specified by law. In West European member states therefore, as well as in
Hungary, Poland and Portugal, a written contract is considered good practice but is legally
required either only for “atypical”employment (e.g. an apprenticeship, fixed-term, seasonal
or part-time jobs), as is the case in Austria, Belgium, France and Portugal, or, the other way
around, only for contracts of indefinite duration (Cyprus and Hungary), or is not generally
488
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