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2 Sep 2015 04:54pm

Zero hours contracts up by a fifth

The number of people on zero-hours contracts has increased by almost a fifth to 744,000 over the past year

People on zero-hours contracts in their main employment represented 2.4% of the overall workforce in April-June, compared with 2% in the same period last year, the Office for National Statistics said.

The estimate from the third ONS survey of businesses indicates that there are around 1.5 million contracts that do not guarantee a minimum number of hours (NGHCs), measured on work carried out in the fortnight beginning 19 January 2015, confirming that many workers are on more than one zero-hours contract.

An ONS spokesperson said, “This latest estimate of total NGHCs where work was done in the reference period is some 91,000 higher than the 1.4 million estimate for January 2014, an increase of 6%, though the increase is not statistically significant. As with the LFS figures, responses to the survey could be affected by changes in employers' reporting behaviour."

The ONS added that it is not possible to say how much of this increase is due to greater recognition of the term “zero-hours contracts” rather than new contracts themselves.

On average, someone on a zero-hours contract usually works 25 hours a week, with around 40% of people on zero-hours contracts wanting more hours.

The figures also revealed that people on zero-hours contracts are more likely to be women (54%), in full-time education (20%) and in both the younger and older age groups compared to people in full-time employment.

Research published by the TUC shows that average weekly earnings for zero-hours workers are £188, compared with £479 for permanent workers. Two-fifths of zero-hours workers earn less than £111 a week - the qualifying threshold for statutory sick pay - compared with one in 12 permanent employees.

Campaigners argue that the contracts are unfair and insecure. However, the government and business figures have defended them, with welfare secretary Iain Duncan Smith arguing in their favour, suggesting they should be named flexible hours contracts.

James Sproule, director of policy at the Institute of Directors, added, “Zero hours contracts offer businesses and employees an important degree of flexibility. For skilled professionals, a degree of flexibility can boost their earning power, while flexibility also suits students and older people – the main users of zero hours contracts – who cannot commit to a set number of hours each and every week.

“Flexible working arrangements helped preserve jobs during the downturn and protected the UK from double-digit rates of unemployment. As businesses began to create jobs at a record pace, attention on the quality of those jobs and concerns around zero hours contracts boomed. This helped make sure practices like exclusivity clauses – something which run contrary to the very flexibility zero hours contracts were designed for – were stamped out.”

John Cridland, CBI director-general believes the focus should not be on the number of zero hour contracts but on tackling bad practice and ensuring that zero-hour contracts benefit both the individual and their employer.

He said, “These figures, which show zero hours contracts are a small proportion of the UK labour market, again illustrate that they are most common among groups where flexibility benefits both parties. For example, more than one third are young people taking their first steps in the labour market..

“Labour market flexibility continues to be a great asset to the UK economy, helping to increase the participation rate of parents - women in particular - and of older workers.”

Sinead Moore

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