Nearly 1m people on controversial terms but growth slowdown points to ‘zero-hours juggernaut’ grinding to a halt, say experts

This article is more than 3 years old

This article is more than 3 years old

The number of people on zero-hours contracts in the UK has hit a record high of 910,000 but there are signs the trend may have reached a peak after Britain’s decision to leave the EU, according to a leading thinktank.



The figures for the final three months of 2016 represented a rise of more than 100,000, or 13%, compared with the same period in 2015, the Resolution Foundation said in its analysis of official data.

People on zero-hours contracts are not guaranteed a minimum number of work hours but must be available. Such contracts are widely used by retailers, restaurants, leisure companies and hotels, and have been offered by companies including Sports Direct and McDonald’s.

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Number of workers employed on a zero-hours contract since 2000 Number of workers employed on a zero-hours contract since 2000

Britain’s largest union, Unite, urged the government to follow New Zealand’s lead and ban zero-hour contracts.



Len McCluskey, general secretary, said: “There are now close to 1 million people in the UK on zero-hours contracts. That’s 1 million people with no job security, who are earning less than people in stable work and who, from week to week, do not know what they will have to live on.

“Let’s learn from New Zealand – put workers’ welfare first and outlaw these hire and fire contracts.”

Despite the numbers, Resolution said the “zero-hours juggernaut may have come to a halt”, with the pace of growth slowing markedly in the second half of 2016, to 0.8% from 7.7% in the same period a year earlier.

It was the first time growth in zero-hours was slower than overall employment growth across the economy, the thinktank said.

“With the employment rate at a record high and the first inklings that firms may think the supply of labour from the EU could be limited after Brexit, employers may be finding it harder to fill roles without guaranteeing hours of work,” Resolution said.

Conor D’Arcy, policy analyst at the foundation, said another possible reason for the slowdown in growth was reputational damage suffered by firms using zero-hours contracts.

“The negative publicity these contracts have attracted may well have played a role in their slowdown, as firms rethink their use. Not providing guaranteed hours of work for those who want it, especially those in low-paying roles, can have a hugely negative impact on the living standards of workers and their families, as budgeting becomes near impossible,” he said.



“The challenge now is to ensure that these still-popular contracts are reserved for cases of genuine desired flexibility for worker and employer.”

The thinktank said zero hours remained popular among some employers and workers. The analysis shows almost half of the net increase in people on such contracts in the past year was among workers aged 55-64.

“For some of these workers, zero-hours contracts may offer a flexible transition from full-time work to retirement, allowing them to top up their income,” Resolution said.

Last year Theresa May hired Matthew Taylor, the former head of Tony Blair’s policy unit, to head a review of workers’ rights and practices, in an attempt to address concerns that millions are stuck in insecure and stressful work.

Taylor is looking at the use of zero-hours contracts as part of his review, meeting workers and employers around the UK.

“The government is determined to build an economy that works for everyone and that is why Matthew Taylor was asked to lead a review of modern employment practices,” a spokesperson for the department of business, energy, and industrial strategy (BEIS) said, responding to Resolution’s analysis of Office for National Statistics (ONS) data.

The ONS will publish its own report on zero-hours numbers in the fourth quarter of 2016 on 15 March.

Referring to a previous ONS release covering the second quarter of 2016, the BEIS spokesperson added: “According to the latest published ONS statistics on the use of zero-hours contracts, fewer than 3% of the UK workforce classes itself as being on this type of contract in their main job, with almost 70% of those happy with the number of hours they work.”