FREEDOM to chose how you spend your time, when to go on holiday, which clients to work with, the ability to literally write your own pay cheque and the convenience of working from home may be good inducements to be your own boss. But you also risk going broke, not having a pension and being personally responsible for costs like travel, lunch and some medical bills that an employer would have had to cover if you were under his employ.

So which way should you go? Should you accept contract work, or should you insist on permanent employment.

The Jamaica Employers Federation (JEF) may be able to help you. The JEF is currently preparing a state of the industry report on contract labour to be presented to employers at their annual convention in three months’ time that may shed light on the contentious practice of separating employees from their jobs and subsequently offering re-employment on a contract basis.

But the study will offer guidance to workers too.

The study aims to determine the extent of practice by firms of employing contract labour; and the costs and benefits to workers who opt to go this route. It will also assess the impact of contract work on the labour market.

The contract labour issue became prominent in the labour market when over two years ago the Jamaica Broilers Group, in efforts to improve organisational efficiency laid off 200 workers during April and July 2000 in its Best Dressed Chicken and Best Dressed Food divisions and as a consequence achieved a $72.4-million first quarter profit immediately following the redundancy exercise.

Previously at the end of July 1998, Jamaica Broilers had let go of 444 employees at their processing facility, a move that led to a long and bitter quarrel with the National Workers Union.

Just over half were rehired on new conditions as contract workers.

The union had accused Jamaica Broilers of union busting and had taken a case to the Industrial Disputes Tribunal (IDT) where it was ruled that the workers had been wrongly dismissed. However, by the time the IDT had ruled, all but 28 of the employees had accepted their redundancy packages.

After one year of the restructuring exercise that involved the displacement of the workers, the company had began to boast of climbing efficiency levels with a leaner staff count of 230 persons — 52 per cent of the former staff complement. Broilers claimed then that the company was processing 284 birds per man-hour, a 71 per cent increase on the former staff count.

But Dwight Nelson, vice-president of the Bustamante Industrial Trade Union (BITU), says likely changes in the Labour Relations and industrial Disputes Act may make the practice of laying off workers and rehiring them as contract labourers illegal if the new employment circumstances are not materially different from the former contract of employment.

“Had the Act as exists now been modified and had not failed to define who is a worker very conclusively and so also not made a distinction between a contract of employment and a contract for employment, Jamaica Broilers’ actions would have been deemed to be unlawful,” but he said. “The effective date of the proposed new law may potentially be retroactive, so Broilers may not be out of the woods.”

Emerging out of representations by unions, the Labour Advisory Council, a body made up of government employees, employers and trade unions, last year agreed on a redefinition of who is a worker so as to allow for a distinction between a person working as a dependent contractor and one who is deemed an independent.

Nelson said that once a clarification is obtained, firms will be restricted from laying off workers in cost-cutting measures and immediately rehiring them as contract workers under circumstances no different from the basis of their former employment.

He added: “If a person is employed as a dependent contractor but the character of his employment is no different from that of an employed person and whereby that person is still managed, statutory deductions are made on his behalf etc, he is an employee in the traditional sense as opposed to the independent contractor where the essence of the contract for service is different.”

Nelson also said that merely trimming labour costs while ignoring other cost centres was short-sighted, he said.

“Other areas are being completely ignored and this alone (labour cost solutions) cannot lead to efficiency. The traditional reaction of slashing labour by local firms can no longer be relevant, given all the other factors to be considered,” the BITU executive lamented.

“Not so!” says Erwin Burton, divisional chief operating officer of Food Trading Division of Grace, Kennedy, whose temporary workers at the Grace Kitchens Division were offered contract employment positions alongside a traditional workforce. As a consequence, Grace Foods & Services achieved profit increases in October (year to date) to the tune of 148 per cent and reduced expenses by 27.6 per cent for the same period over the previous year.

“When we were doing a major restructuring of operations, we had examined every item of cost, not one area was overlooked in our examination of our business processes, and outsourcing was only adopted where necessary. Other private sector firms have done likewise,” he said.

Burton noted, too, that in the case of Grace, Kennedy, significant collaboration between the company and the union had taken place. Lambert Brown of UAWU, the bargaining unit for the Grace meat processing plant in Sav-la-Mar, acknowledged that his union had “cooperated fully in the consultation process with Grace” but he declined to indicate any reservation on the part of the union in respect of contract labour at Grace.

But speaking generally, he noted that in the short term “contract labour arrangements are likely to work, but over the long haul contract labourers as a group will begin to seek some form of collective representation. … At this time, however, unions may have to wait until these workers feel bruised enough to move in one voice as in some instances contract labour arrangements are a cloak for exploitation”.

From the perspective of the ordinary “Joe” who is working as a contractor, Vincent Morrison, island supervisor, JCTU, said: “Joe is going to lose a whole heap! He will get no union protection, no medical, pension, group life insurance, no overtime payment, no sense of affiliation with other workers and, generally speaking, the entire regime of benefits that informs quality service disappears under contract work.”

But Jacqueline Lloyd of JEF believes that both the employer and the contract worker benefit from the arrangement.

“The employer is able to utilise the physical plant to maximum capacity at a lower cost while the contract worker is able to likewise increase his personal income by charging higher rates than would normally be obtainable under traditional employment modes.

“ILO reports and preliminary investigations on contract work here also suggest that the contract worker is more productive, works harder and smarter and is more competitive when compared with his counterpart in other areas of the world.”