A new study into zero hours contract workers has found that 44% want more hours and greater job security, whilst just 28% accepted such positions on the basis that they offered greater flexibility, thereby undermining the main reason cited by gig economy companies for justifying such contracts.
Zero Hours Contract Workers: The New Research
The new research into Zero Hours Contracts (ZHC’s) was carried out by Nikhil Datta, Giulia Giupponi and Stephen Machin, from the Centre of Economic Performance at the London School of Economics (LSE), for the 68th Economic Policy Panel Meeting that took place in Vienna on the 4th-5th October 2018. The study was based upon a survey of approximately 20,000 zero hours contract workers. The research found that:-
- 44% of zero hours contract workers wanted more hours and greater job security. The study found that: “relatively low pay, coupled with limited and fragmented hours, implies high levels of earnings insecurity for workers whose only option is to work on this type of arrangement.”
- Just 28% of ZHC workers took up their positions on the basis of the flexibility they allegedly offered
- The authors argued that there is a possible link between the rise in the use of ZHC’s and the rise in the national minimum wage. They say: “The analysis reveals that minimum wage policies appear to have some bearing on the increased utilisation of ZHCs. Specifically, in the context of the English adult social care sector, we find that the NLW introduction led to a larger incidence of ZHCs in the domiciliary care sector, i.e. a sector in which work is traditionally organised around fragmented hours. This suggests that firms exploit the flexibility of ZHCs in order to buffer the wage cost shock induced by the minimum wage increase.“
- 28% of ZHC workers say they only accepted such a contract out of necessity, as opposed to choice, because they could not find a role with guaranteed hours
In the last 20 years, the number of zero hours contract workers has grown considerably from just 200,000 in 2000, to almost 1 million today. Nevertheless, the new research will come as a crushing blow to gig economy companies, as it completely undermines the flexibility argument used most often by them to justify ZHCs. Indeed, it will bolster the calls by those (including the Labour Party and the TUC) who want to see them outlawed, on the basis that they say they are exploitative.
The Uber appeal against an Employment Appeal Tribunal (EAT) ruling that its drivers were workers will be heard by the Court of Appeal on the 30th October 2018.
The Government’s Response Post Taylor Review
Following the Taylor Review in to the gig economy and the issue of zero hours contract workers, the Government agreed to provide “a right for all workers, not just zero-hour and agency, to request a more stable contract, providing more financial security for those on flexible contracts.“