ESeC aims to differentiate positions within labour markets and production units in terms of their typical ‘employment relations’. Therefore, ESeC recognises four basic positions: employers, the self-employed (own account workers), employees and those involuntarily excluded from the labour market (see Appendix 1).
Among employees, there are quite diverse employment relations and conditions, that is employees occupy different labour market situations and work situations. Labour market situation equates to source of income, economic security and prospects of economic advancement. Work situation refers primarily to location in systems of authority and control at work, although degree of autonomy at work is a secondary aspect. The ESeC categories thus distinguish different positions (not persons) as defined by social relationships in the work place – i.e. by how employees are regulated by employers through employment contracts. Three forms of employment regulation are distinguished.
- In a ‘service relationship’ the employee renders ‘service’ to the employer in return for ‘compensation’ in terms of both immediate rewards (e.g. salary) and long-term or prospective benefits (e.g. incremental pay scales, assurances of security and career opportunities). The service relationship typifies Class 1 and is present in a weaker form in Class 2 (see Table 1).
- In a ‘labour contract’ employees give discrete amounts of labour in return for a wage calculated on amount of work done or by time worked. Typically contracts are easily terminated and there are no prospective elements in the employment contract. The labour contract is typical for Class 9 and in weaker forms for Classes 7 and 8 (see Table 1).
- Intermediate or ‘mixed’ forms of employment regulation that combine aspects from both forms (1) and (2) are typical in Classes 3 and 6 (see Table 1).
The classification also separately identifies employers and the self-employed with no employees, with large employers in Class 1 and others in classes 4 or 5. Table 1 displays the classification in full. Appendix 1 provides a diagrammatic picture of the conceptual basis of ESeC. The version of the classification shown in Table 1, which will be used for most analyses (the analytic version), has ten classes. For complete coverage, the three categories ‘Students’, ‘Occupations not stated or inadequately described’, and ‘Not classifiable for other reasons’ are added as ‘Not classified’.
Since the schema is designed to capture qualitative differences in employment relationships, the classes are not consistently ordered according to some inherent hierarchical principle. However, so far as overall economic status is concerned, Classes 1 and 2 are advantaged over Classes 3, 6, 7, 8 and 9 in terms of greater long-term security of income, being less likely to be made redundant; less short-term fluctuation of income since they are not dependent on overtime pay, etc; and a better prospect of a rising income over the life course.