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where staff where engaged in temporary contracts to implement a certain innovation
(similar to project-based employment contracts). Also companies with high levels of inter
organizational cooperation tend to engage highly qualified employees with temporary
contracts. Even if mobility between firms is a mechanism for knowledge dispersion, if it
becomes too high, it may reduce firms’ incentive to invest in education and training.
Contractual flexibility is therefore clearly no way to increased “employee driven”
innovations (De Spiegelaere, Van Gyes, Van Hootegem, 2014).
It does not mean that companies using a high proportion of fixed-term contracts are not
innovative at all. Some studies show that score well in disperse of innovations (De
Spiegelaere, Van Gyes, Van Hootegem, 2014). Many of low-tex companies could not invest
in “new-to-market” innovation generation and concentrate their human resource
management efforts to production cost effectiveness. To these companies, fix-term
contracts, temporary agency work and other flexible forms of employment is convenient
wen business require employees to supplement permanent staff at fluctuations. This type of
work allows avoid problem of increasing number of employees, it is efficient way to find
qualified workers without additional administrative costs ( Usonis, Bagdanskis, 2008). Finally
managers could expected wage gap between direct employees and temporary agency
workers performing similar tasks. As, in despite of general principle of equal pay and
treatment, it has been observed in Germany (Eichhorst, Tobsch, 2014).
Existing demand for flexible forms of labour shows the fact that despite a relatively rigidity
of regulation, actual labour relations are far more flexible. Wide spread of termination of
employment contract upon the notice of an employee (while in fact it is often done on
employers initiative) (Dambrauskienė, 2008) unpaid overtime work, trial period usage as
“quasi short-term” contracts and other “paralegal” work relations leads some scientists to
conclusion that current regulation does not reflect needs of employers and interests of
employees (Davulis, 2008). Employment through temporary employment agencies
Lithuanian companies have been using since 2003(Bagdanskis, 2011) long before formal
legitimation in statutory law.
Readiness of businesses to build their innovative strategies around contractual flexibility
may cause certain problem. Temporary and agency work may be preferred by certain
categories (students, young people with no work experience) of employees who need
flexible working hours. Theoretically flexible forms of work make it easier to acquire work
experience and create preconditions to permanent employment (Usonis, Bagdanskis, 2008).
However, usually for the worker there is no sense to conclude fixed-term the employment
contract if he can choose to conclude permanent one (Mačernytė-Panamariovienė, 2015).
Introduction of wider possibilities of temporary employment and other “precarious”
employment will significantly reduce unemployment, but also could shift the market
towards creation of non–standard, low-payment workplaces and formation of groups of
workers with little prospect of permanent employment (Eichhorst,Tobsch, 2014).
Netherlands experience shows that low-paid job often offers hardly any prospect of
improving the income situation in the future (Nekkers, Roorda, van der Waart, 2008). To the
employees non-standard, temporary work does not provide the security and stability, career
perspective and can cause psychological problems as a consequence of employment.
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