‘Zero hours contracts’ – new ONS estimate of 1.4 million plus

I wrote recently about ‘zero hours contracts‘. At the time we were awaiting an update by the Office of National Statistics on the estimated number of people working these contracts. Reports in the press expected an estimate of 1 million. In fact the ONS estimate is 1.4 million[1]. However, this was simply the number of people reported to be working during a two week period, at the end of January/beginning of February. This estimate was based on a new ONS survey of 5,000 businesses which was more extensive than the CIPD one which was based on 1,000. The CIPD had estimated around 1 million people worked on zero hours contracts. In addition to the 1.4 million the ONS estimated 1.3 million more people on these contracts who didn’t work during this two week period.

There has been much confusion over the definition of zero hours contracts since the term is not always used and so workers, when surveyed did not necessarily define themselves as working on them. The ONS reports that these type of contracts are variously described as ‘casual worker’, ‘on-call relationship’, ‘hours to be notified’ and ‘occasional professional assistance. So the ONS has designated these types of contract as ‘Non-guaranteed hours contracts’ to cover all those contracts where there is no guaranteed work.

The Guardian described the additional 1.3 million contracts as ‘dormant’. This is not necessarily the case, since it not unknown for people to go a couple of weeks without work. The ONS suggests that

“This total might include people with contracts with several employers; agency staff, those not wanting to work; those who have found another job elsewhere but remain on employers records; some people on leave or sick and those not offered work in the reference period. Overall, this group probably includes some contracts that need to be added to the official 1.4 million estimate, but needs to be investigated in more detail.”

ONS will carry out further research and report later in 2014.

What’s clear, therefore, is that the numbers are in excess of 1.4 million. The bigger the company the more of them use these contracts: 47% for those with 250 or more employees. Overall 13% of employers said they used them; as many as 47% in the Accommodation and Food industries, 22% in Health and Social work and 15% in Education. The largest percentage age-wise is 36% of 16-24 year olds and 27% of those 25-39.

Based on returns from NHS trusts the number of staff on zero hours contracts is 75,000. Different datasets covering social work in England and Wales show 300,000.

You can read the ONS release here: “Analysis of Employee Contracts that do not Guarantee a Minimum Number of Hours

[1]    The ONS estimate of potential error means that the figure could be anywhere from 1.2 to 1.7 million.

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