Zero-hours contracts 'trapping 1.4 million workers at the whim of their boss'

Nearly half of Britain’s biggest businesses are using zero-hours contracts to employ 1.4 million workers across the country, official figures show.

The use of contracts without guaranteed hours is widespread in major companies, a snapshot survey of businesses by the Office for National Statistics found.

Around 13 per cent of employers surveyed reported some use of the precarious contracts, including almost half of all businesses in tourism, catering and food. In health and social work more than one in five employers reported using them.

The contracts mean there is no obligation on the employer to provide regular shifts - or for the employee to work a certain number of hours.

Nearly half of all larger companies with 250 or more employees make some use of zero-hours contracts, compared with 12 per cent of businesses with fewer than 20 employees. They are rarely used in jobs in the financial and professional services and agriculture, according to the snapshot survey.

Q&A: What's the problem with zero-hours contracts

The government is conducting a review of zero-hours contracts which is expected to report by the summer. Campaigners worry that the contracts leave many workers in a state of financial peril, where relied upon shifts are taken away at no notice.

Unite general secretary Len McCluskey said: “Zero hours contracts are trapping at least 1.4 million people in a world of insecure, low paid work, where your future income is dependent on the whim of your boss.

“It is clear that that workers in the UK need stronger legal protection – not less as the government claims – to protect them against abuses. They need legal rights to challenge abuses and not be charged £1,200 to take a case to an employment tribunal.

“It is time for ministers to take action and ensure that all goods and services that government departments procure should be from outside organisations and companies that don’t use zero hours contracts.

The latest figure is a substantial increase on the previous ONS estimate of 580,000 - or 2 per cent of the workforce - from October to December last year.

Workers on zero-hours contracts are much more likely to be underemployed, looking for another job, and without union membership than staff on conventional contracts, according to analysis from the think tank the Resolution Foundation.

Almost three in 10 of all those on zero-hours contracts are looking to work more hours – either in their current job or by taking on new employment, the research found. This compares to just one in 10 of those with fixed-hours work.

Laura Gardiner, senior research analyst at the Resolution Foundation, said: “We still need a much more accurate picture of the scale and spread of zero-hours contracts but even the partial data we have suggests growing concern about their use and the role they play in a labour market which remains very difficult for large numbers of workers.

“In particular, the significant minority of zero-hours staff who are looking to work more hours suggests a slack in the labour market which could have serious implications for the economy. If more people are on zero-hours contracts than is currently estimated, and if there proves to be widespread underemployment among the growing number of self-employed, this adds to the debate about the nature and extent of the slack in the jobs market.”

The prevalence of zero-hours contracts is just part of the growing problem of poverty amongst working families according to the Joseph Rowntree Foundation, whose latest research shows more than half of households in poverty live in families where someone works – some 6.7 million people.

Katie Schmuecker, Policy and Research Manager at JRF, said: “Zero-hours contracts are just one aspect of the UK’s problem with in-work poverty. We have workers unable to get enough hours to lift themselves and their families out of poverty, and not being offered training and development by their employer, leaving them stuck in dead end jobs.

“Tackling in-work poverty requires the nature of jobs at the bottom of the labour market to change, alongside reform to the welfare system.”