Modelling and Measuring Atypical Employment

Under a zero hours work contract (ZHC), individuals are not guaranteed work and are paid only for the actual hours of work carried out. Crucially, there is no guarantee of any work being performed: an employer only offers work when and as required; similarly, a worker performs the tasks offered only when and if it suits them. Since early 2013, ZHCs have become one of the highest-profile labour market issues in the UK. Frequent media reports on their use and abuse are polarised between those who see zero hours contracts as the epitome of exploitative, precarious employment, and those who consider them a sign of the efficient functioning of a modern labour market. Yet, despite their salience in public debate, many questions concerning the operation and impact of zero hours contracts (ZHCs) remain unanswered. This is primarily due to a lack of reliable empirical work in the area, arising from a dearth of accurate time series evidence on ZHCs in nationally representative datasets such as the Labour Force Survey.

In the first part of my research agenda, I will address this gap in knowledge with the help of a novel matched employee-employer panel, the workforce intelligence system of the adult social care sector in the UK. This dataset includes a more accurate measure of ZHCs than other sources, in addition to a host of other worker and employer characteristics. I will develop an economic model that allows for a limited availability of job offers and preferences for flexibility, and estimate its key parameters using the aforementioned dataset. In so doing, I will shed light on why individuals accept ZHC work - an absence of preferred alternatives or a preference for the flexibility that such an arrangement affords? - and explore how this varies across different groups of workers. Such results are needed to inform the debate on the regulation of these contracts, which has thus far suffered from a lack of reliable evidence.

It is difficult to measure ZHCs and other forms of atypical employment accurately because individuals often lack a sufficient understanding of their contractual situation (International Labour Organisation, 2003; Office for National Statistics, 2014). There are also wider challenges arising from a lack of congruence between employment law taxonomies and the classification of workers in labour market surveys. Lawyers are rarely interested in the label used to describe a particular working arrangement. Under UK employment law, individuals are typically assigned to one of three legal categories, with corresponding levels of employment protection: employee (highest level, incl. unfair dismissal), worker (basic rights, such as minimum wage), self-employed (very little). Atypical working arrangements such as ZHCs would be better identified and understood if researchers focused on operationalising these legal categories.

I will tackle this problem in the second part of my research agenda. Together with colleagues in the Oxford Faculty of Law, I will analyse the factors considered in written judgments and claimant forms from employment tribunal cases, and transcripts from interviews with judges. The aim of the project is to identify a set of measurable factors that are good indicators of the legal status of workers. Given this, I will develop a set of questions that can be included in labour market surveys to generate more reliable information on atypical work and the scope of employment protection rights. I will then bring together producers and users of labour market statistics to establish how to incorporate these indicators into labour market surveys. In so doing, this work will help to develop a more robust evidence base for future research into atypical work and employment protection legislation, as well as clarifying the key features of work arrangements that determine an individual's legal status. These results will be of crucial importance in informing employment legislation and dispute resolution.

There are five main non-academic groups who will benefit from my research agenda:

1. Policy-makers within government (domestically and at the European level)
This group includes government and opposition politicians, as well as civil servants, notably those located at the Department for Business, Innovation and Skills (BIS) and the European Commission's DG Employment. Zero hours contracts (ZHCs) have been much debated in the political arena in recent years. Indeed, BIS has been criticised over its running of the ZHC consultation in 2013 and the recommendations the exercise produced (Freedland, 2014). My research will provide a better understanding of why individuals accept ZHC work, and how this varies across different groups in society; necessary information for any debate on further regulation.

2. Skills for Care & care providers.
Improved workforce planning in the adult social care sector is seen as crucial by Government, care providers, and clients (Centre for Workforce Intelligence, 2012). My research will generate a better understanding of individuals' preferences over different types of employment contract, and why they make employment transitions within the adult social sector. I have already established a relationship with the workforce intelligence team at Skills for Care and will leverage these contacts to suggest strategies to reduce turnover within the sector. This has the possibility of reducing turnover costs in the industry and increasing the continuity of care provision for users.

3. Office for National Statistics & producers of labour market surveys.
The methodology used by the Office for National Statistics (ONS) to record ZHCs in the Labour Force Survey has been criticised (ONS, 2014) and the variables currently collected by the LFS do not enable measurement of informal employment as defined by the International Labour Organisation (ILO) - see ILO (2003). I hope for my research to introduce new questions to this survey to enable atypical working arrangements and the scope of employment protection rights to be measured more accurately. If this occurs, the evidence base for future research in labour economics and empirical labour law will be improved, enabling a wider set of questions to be answered on the impact of employment protection legislation on individual behaviour and employment trends.

4. ACAS, Employment Tribunals, and claimant support bodies
Employment tribunal (ET) claimants are often uncertain as to whether they qualify for certain employment protection rights. My research will clarify the set of features of working arrangement that are referred to, to determine a worker's legal status by judges in the ET system. This will allow groups advising workers, including Acas, to provide better advice to potential claimants on their legal status, and thus employment protection coverage. This will help to prevent futile claims being bought to ETs, which in turn will help to reduce the burden on the system and, since the introduction of ET fees in 2013, help claimants to avoid unnecessary financial costs.

4. Trade unions and employer organisations
There is strong interest in aspects of my research agenda amongst both labour unions and employer organisations. My research will provide a more robust evidence base for those campaigning on the costs and benefits of ZHCs. It will also inform these parties on the scope of employment rights, another topic of concern. This has the potential to influence the issues they campaign on and the design of policy reforms that they advocate.