• One million workers on zero hours contracts, finds CIPD study

  • 5 Aug 2013
  • Comments 6 comments

Employers’ use outstrips official estimates, research reveals 

Up to one million workers in the UK are on zero hours contracts – four times more than previously thought, according to CIPD research.

The latest figures from the institute found that 3 to 4 per cent of the country’s workforce are on zero hours contracts. This suggests that the Office for National Statistics’ calculation of 1 per cent – or 250,000 zero hours workers – is an underestimate.

The CIPD’s latest survey of 1,000 employers found that one-fifth employed at least one person on a zero hours contract, although the majority of those organisations used zero hours contracts for less than 10 per cent of their workforce.

Employers in the voluntary sector (34 per cent) and the public sector (24 per cent) were more likely to use zero hours contracts than private sector companies (17 per cent).

The figures revealed that zero hours contracts were most common in the hotel, catering and leisure industry (48 per cent), education (35 per cent) and healthcare (27 per cent).

The CIPD’s latest data, part of its forthcoming 2013 Labour Market Outlook, also included a sample of 148 workers on zero hours contracts.

Of these respondents, one in seven felt that their employer gave them insufficient hours to provide a basic standard of living.

On average, they worked 19.5 hours per week – although 38 per cent described themselves as being employed full-time, typically working 30 hours or more a week.

By age group, people employed on a zero hour contract were twice as likely to be among either the youngest workers (aged 18 to 24) or oldest workers (over 55).

But while zero hours contracts should be examined further, it should not be assumed that their use was automatically wrong, cautioned Peter Cheese, the CIPD’s chief executive. 

“There does need to be a closer look at what is meant by a zero hours contract, the different forms that they take, and clearer guidance on what good and bad practice in their use looks like,” he explained.  

“Zero hours contracts, used appropriately, can provide flexibility for employers and employees and can play a positive role in creating more flexible working opportunities,” Cheese continued. “This can for example allow parents of young children, carers, students and others to fit work around their home lives.

“However, for some this may be a significant disadvantage where they need more certainty in their working hours and earnings, and we need to ensure that proper support for employees and their rights are not being compromised through such arrangements. Zero hours contracts cannot be used simply to avoid an employer’s responsibilities to its employees.”

In May, People Management exclusively revealed that business secretary Vince Cable was planning a review of zero hours contracts.

He added today: “For some these can be the right sort of employment contract, giving workers a choice of working patterns.

“However for a contract that is now more widely used, we know relatively little about its effect. There has been anecdotal evidence of abuse by certain employers – including in the public sector.”

“While it's important our workforce remains flexible, it is equally important that it is treated fairly,” Cable said. “This is why I have asked my officials to undertake some work over the summer to better understand how this type of contract is working in practice today.”

But shadow business secretary Chuka Umunna went further and called for a formal consultation over zero hours contracts, adding that their use should be an exception rather then the norm.

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Comments (6)

  • I’m impressed that you can create inferential statistics from your employer survey that are more accurate than the Office for National Statistics. Can you please supply your confidence intervals and sampling strategy?

  • Generally I hold the view that the ability for an organisation to offer paid work on any type of contract is a positive thing for them and for our economy. It is a shame if people who really want permanent work can only find work on a zero hours contract but that might be the best the employer can do - it might simply meet their business need. And it is possible that some people who gain permanent employment will do so because of work experience gained on zero hours contracts.

  • It is a pity all the publicity including the CIPD's own study presents such a negative image of zero hours contracts.  It does not matter what proportion of employees are on such contracts nor whether to some they may be a disadvantage if they need certainty of hours.  What matters is whether they are being used appropriately.  I have several Clients where the demand for their services / products varies from next to nothing to almost unattainable.  In such cases they could either offer contracts guaranteeing the minimum hours (possibly single figures) with extra hours at standard rate but with no guarantees or use Zero Hours Contracts.  What is the difference?  Come on CIPD present the positive use but also search out and publish best practice as guidance.

  • Of coruse it's right to review and iron out abuse and I would agree very much with Peter Cheese's commentary and the argument for Zero Hour contracts as such contracts allow for a level of flexiblity to be introduced and very much support organic growth within a business.  

    Given the uncertainty with forward economic growth (which is perhaps something Vince Cable's Government may wish to concentrate on more, so that more full-time/permanent job roles are generated) flexbility so that your cost base may expand or decrease as Markets dictate is something every commercial business would look to achieve isn't it?  One would imagine that whatever the rules business will always pursue flexible options and those that allow flex in lean economic times.  To me zero hours are just one option in the armoury, surely it's better to have some work than no work and employment legislation still applies so employment protection is in place?  

    If you have 19.5 hours work per week available would you offer it to someone if they wanted it?

  • It must be a slow news week once again. We've been here years ago with MacDonalds now Cable, Umunna et al need to be very careful that starting a crusade to raise their profiles while apparently 'supporting' the downtrodden masses, they don't end up putting a whole raft of people out of any sort of paid work.

    Isn't a mantra of the CIPD and Govt about moving to a flexible work force? Didn't anyone think what that would look like in reality? Raise standards by all means, but proceed with caution.

    As to the company that sparked this story off in the media, to the best of my knowledge their employees haven't exactly been lining the streets to complain.