What the ONS data really tells us about zero-hour contracts

Contract by Branko Collin

The number of workers on zero-hour contracts, which guarantee no working hours to staff, has risen 19 percent in the year to June to 744,000, or 2.4 percent of those in employment, according to data from the Office for National Statistics (ONS) released on Wednesday.

The use of such contracts has been controversial in the past, with some arguing they disadvantage workers and allow firms to dodge the greater obligations to staff that come with full or part-time contracts. Frances O’Grady, the general secretary of the union TUC, said of the figures:

“Zero-hours contracts are a stark reminder of Britain’s two-tier workforce. People employed on these contracts earn £300 a week less, on average, than workers in secure jobs. I challenge any minister or business leader to survive on a low-paid zero-hours contract job, not knowing from one day to the next how much work they will have.”

But supporters of the contracts argue that they allow people to work flexible hours, and are actually popular among those that use them. To find the truth the Right Dishonourable dug into the data.

How long have zero-hour workers been at their job?

The data from the ONS shows that zero-hour contracts are more likely to be used in the first few years of employment at a given job rather than in later years.

Number of zero-hours contracts by length of time with current employer
April to June 2015 and change since April to June 2014, UK

Number of “zero-hours contracts” by length of time with current employer, ONS

Whether this means that former zero-hour workers are graduating into steadier employment or merely moving between jobs without guaranteed hours is less clear.

The ONS did however say that a rise in recognition of zero-hour contracts had affected the stats, with greater reporting inflating the actual increase:

“When looking at the length of time in current job, two-thirds of the increase in zero-hours contracts is from people in their job for more than a year, that is they were already with their current employer in April to June 2014. Consequently this part of the overall increase does not necessarily relate to ‘new’ zero hours contracts. It could have been due to either increased recognition or people moving on to a zero-hours contract with the same employer.”

What sorts of businesses tend to use zero-hour contracts?

The ONS provides us with two sets of data dissecting the types of business using zero-hour contracts, one that covers the sizes of a given business, and another that covers the industries involved.

Proportion of businesses using contracts that do not contain a minimum number of hours by number of staff
January 2015 compared with January 2014

Proportion of businesses using contracts that do not contain a minimum number of hours

Proportion of businesses using contracts that do not contain a minimum number of hours by industry
January 2015 compared with January 2014

Proportion of businesses using contracts that do not contain a minimum number of hours by industry

In short, the bigger a company is the more likely it is to use zero-hour contracts, and the hospitality industry is more likely to use them as a proportion than the information and financial industries.

Laura Gardiner, senior policy analyst at the Resolution Foundation, a think tank, commented:

“We should remember that only a small minority of workers are on ZHCs and overall job security has tended to rise slightly in recent decades. But for those affected – particularly in low-paying sectors such as hospitality, where two in five businesses use ZHCs – the danger is that job insecurity is becoming deeper.”

What sort of people take up zero-hour contracts?

As with many aspects of the job market age and sex are not evenly distributed when it comes to zero-hour contracts. Zero-hour workers are more likely to be women, and are more likely to be used by the young than the middle-aged.

Proportion of people in employment by gender, education and part-time employment
April to June 2015

 Proportion of people in employment by gender, education and part-time employment, April to June 2015

Distribution of people in employment by age
April to June 2015

Distribution of people in employment by age, April to June 2015James Sproule, director of policy at the Institute of Directors, a business lobby, had this to say:

“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.”

Are zero-hour workers satisfied with their working hours?

This is perhaps the most salient question in the debate over the use of zero-hour contracts. If people are happy with their contracts than both employer and employee are getting a good deal out of the arrangement. If not then the contract is more likely to be exploitative.

Looking for another job or more hours
April to June 2015

Looking for another job or more hours, April to June 2015Chuka Umunna, the shadow business secretary, commented on these results:

“These stark figures show that the Tories are the party of insecurity at work. There are now over 1.2m people working part time because they could not find full time work – 200,000 more than when the Tories took office in 2010.”

All data and graphs from the Office for National Statistics, the full report of which can be read here.

Image Credit – Contract by Branko Collin

Jimmy Nicholls

Jimmy Nicholls

Writer on Westminster, free speech, religion and so forth. Contact jimmy.nicholls@rightdishonourable.com

One Comment

  1. ZHC are a tricky business, I’d always been sort of against them (as in, I didn’t really know much about them but they sounded like a bad idea). However an internship I’m completing at the moment in my summer break from university has asked me if I want to stay on til Christmas. The only way I can do this and have the flexibility I need – I’m completing a full time degree, will be volunteering during term time, and have other commitments – is to be on a ZHC. Otherwise, I would have to pass up the opportunity to gain an additional three months experience in the field I want to work in.

Leave a Reply

Your email address will not be published. Required fields are marked *