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Zero-hours contracts data released by ONS

There has been a 6% rise in the use of zero-hours contracts by UK businesses in the last year, according to figures released by the Office for National Statistics (ONS).

The data revealed that 744,000 people (or 2.4% of those in employment) between April and June 2015 were employed on zero-hours contracts, up from 624,000 (2%) for the same period a year earlier.

It also found that more than a third (36%) of employees on zero-hours contracts want additional hours, and that one in 20 (5%) workers on contracts with no guaranteed hours want an additional job to supplement their current role.

Laura Gardiner, senior research and policy analyst at the Resolution Foundation, responded by highlighting the “deep insecurity” such contracts can bring.

She said: “We should remember that only a small minority of workers are on zero-hours contracts 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 zero-hours contracts – the danger is that job insecurity is becoming deeper. Policy makers must act to ensure that the benefits of labour market flexibility are balanced appropriately with protecting workers’ rights.”

Jon Ingham, Glassdoor’s career and workplace expert, said the true figures could be much higher. “The fact that many of those surveyed in the ONS study might not know what a zero-hours contract is could mean the scope of the problem is far greater than the figures indicate,” he said. “Recent research from Glassdoor reveals that one in four unemployed adults has been offered one of these contracts and almost half have turned them down.”

Glassdoor’s research found the main reason for this, cited by 54% of respondents, was the need to receive a guaranteed level of income in order to stop receiving benefits. A lack of trust towards employers offering this type of contract (44%) and negative press coverage (13%) were other common reasons for turning down such a contract.

“It’s safe to say that employees who accept a zero-hours contract do not do so as a career choice,” said Ingham. “For most it’s because they have limited options. For some it might be beneficial to have the flexibility to fit around their lifestyle but for others it’s a substandard contract that offers little in the way of benefits or security.”

However, CBI director-general John Cridland countered that such flexible contracts are often mutually beneficial for employer and employee.

“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,” he said. “For example, more than a 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.”

The CIPD responded to the figures by highlighting findings from its 2013 Zero-hours contracts: myth and reality report, which showed that zero-hours workers are just as satisfied with their job when compared to the average UK employee (60% vs 59%), happier with their work/life balance (65% vs 58%), and less likely to think they are treated unfairly by their organisation (27% vs 29%).

The CIPD recommended employers using zero-hours contracts ensure those workers are paid at comparable rates to others doing the same or similar work, and conduct regular reviews on whether zero-hours contracts are appropriate for the nature of the work involved.