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Statistics and Lampposts X: Zero Hours Contracts and Caveats

Zero hours contracts are a matter of great political attention. (Edited: Wikimedia Commons)

Zero hours contracts are a matter of great political attention. (Edited: Wikimedia Commons)

Zero-hours contracts, which means the employer and the employee have no respective obligation to provide or accept working hours, have developed into a political furore. Labour’s Shadow Business Secretary Chuka Umunna said they were leaving employees “insecure, unsure of when work will come, and undermining family life”.

The Office for National Statistics (ONS) had previously estimated the number of zero-hours contracts through their Labour Force Survey (LFS), where employees would be asked:

Some people have special working hours arrangements that vary daily or weekly. In your (main) job is your agreed working arrangement any of the following…?

The potential responses were: flexible working hours, annualised hours contract, term-time working, job sharing, nine day fortnight, four-and-a-half day week, zero-hours contract, on-call working or none of these. According to the ONS, their LFS questionnaire “does not allow respondents to say that they worked shift work… and then go to say that they worked on a zero-hours contract”. The ONS used to only ask this question in the October-December quarter, and so estimates of contractual status from non-responders in other quarters cannot be performed.

Employees might be simply unaware of the esoteric term ‘zero-hours contracts’ and so not choose it as an answer. Surveys are constrained by the respondent’s knowledge of the potential answers, and so are susceptible to misattribution. After potent media attention on zero-hours contracts, the attributed figures jumped from 183,000 in 2010 and 250,000 in 2012, to 583,000 in 2013. Whilst the Shadow Business Secretary confidently said “there has been a huge rise in the numbers of people on zero-hours contracts since 2010”, the ONS urged caution:

However, the ONS recognises that this question depends on employees correctly knowing their terms of employment, and that increased awareness of ZHCs among employees may have affected how people respond following increased media coverage in the latter half of 2013.

Caveats are important in statistical analysis, as they highlight when one figure may not be comparable to the next. This is particularly true when one methodology is abandoned due to its severe deficiencies, and replaced with another. Instead, the ONS now surveys employers about these contracts. The first estimate of non-guaranteed hours contracts (NGHCs) – which include zero-hours contracts, but are not exclusively so – is there were 1.4m employee contracts with some work undertaken, but no guaranteed work. A further 1.3m NGHCs had no hours undertaken, possibly including contracts of people who have found other jobs.

Evidence UK says its purpose is to “factually correct the errors and lies peddled by Tory newspapers and MPs”. However, they claim that there are “1 million more workers on zero hours contracts”.

The ONS data cannot support this claim. The new ONS estimate refers to the number of contracts, not workers: one worker can have multiple contracts. These non-guaranteed hours contracts are not equivalent to zero hours contracts. Also, this is a direct comparison to estimates made under a severely flawed and abandoned methodology. For a group dedicated to correcting errors, they make several of their own.

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3 comments on “Statistics and Lampposts X: Zero Hours Contracts and Caveats

  1. Pingback: Statistics and Lampposts XI: Zero Sense | In Defence of Liberty

  2. Pingback: Statistics and Lampposts XIV: Letters of Agreement | In Defence of Liberty

  3. Pingback: A Recurring Error | In Defence of Liberty

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This entry was posted on May 18, 2014 by in Statistics.
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