Zero-hours contracts: One million British workers could be affected

Unions call for reform as Business Secretary orders review into practice

One million workers could be employed on controversial zero-hours contracts, four times more than the number estimated by official Whitehall statisticians, according to a survey of businesses.

The scale of the practice, whereby employees have to be available for work but are not guaranteed any set number of hours, prompted fresh calls last night for a ban on people being hired without the promise of a guaranteed minimum number of hours.

The Chartered Institute of Personnel Development (CIPD) calculated that up to four per cent of workers could have been forced to accept such contracts.

The Office for National Statistics (ONS) last week revised its estimate for the number of people employed on a stand-by basis from 200,000 to 250,000. But critics had warned the true figure could be much higher and The Independent revealed last month that 300,000 people in the social care sector alone have been required to accept zero-hours terms.

The CIPD’s survey of more than 1,000 businesses found one-fifth (19 per cent) of employers had recruited staff on zero-hours contracts, with the practice more common in the voluntary and public sectors than in private industry. Nearly half (48 per cent) of employers in the hotel, catering and leisure sector had used zero-hours contracts, compared with 35 per cent in education and 27 per cent in health care. Large organisations were more likely than small businesses to offer the contracts. The CIPD found young adults (aged 18 to 24) and older workers (over 55) were most likely not to be offered the contracts.

Fourteen per cent of staff employed on these conditions told the CIPD they did not receive enough work to ensure a decent basic standard of living.

Zero-hours contracts were initially introduced in hotels, restaurants and shops, but their use has spread to the public sector because of spending cuts. The number has reached almost 100,000 in the National Health Service, while new figures show more than 270 government staff are on such contracts. Unison, Britain’s second biggest union, called for them to be outlawed. Its general secretary, Dave Prentis, said: “The vast majority of workers are only on these contracts because they have no choice. They may give flexibility to a few, but the balance of power favours the employers and makes it hard for workers to complain. Not knowing from week to week what money you have coming in to buy food and pay your bills is extremely nerve-wracking.”

Frances O’Grady, the TUC general secretary, said: “The fact that zero-hours contracts have increased across the economy is further evidence of how tough it can be for people at work under this Government. People are being made to feel grateful for any kind of employment regardless of the pay, terms and conditions.”

Vince Cable, the Business Secretary, has ordered a review of the contracts. He said: “While it’s important our workforce remains flexible, it is equally important that it is treated fairly.”

The CIPD’s chief executive officer, Peter Cheese, said: “Our research suggests they are being used more commonly than the ONS figures would imply. However, the assumption that all zero-hours contracts are bad... should be questioned.”

In numbers

250,000 The ONS increased its estimate of zero-hours workers last year

300,000 The number of zero hours contracts in the social care sector, according Skills for Care

1m The latest figure of one million from the CIPD is a new high

Video: Vince Cable wants 'full picture' on zero-hours contracts