ONS reveals first business estimates of employee contracts without guaranteed hours

30 April 2014

A snapshot survey by the Office for National Statistics has shown that employers in Great Britain are using around 1.4 million employee contracts that do not guarantee a minimum number of hours.

The estimate includes all those contracts under which some work was done during a two-week period between late January and early February 2014.

Non-guaranteed hours contracts (NGHCs) include, but are not exclusively, “zero-hours contracts”, as they also include some other contract types that do not guarantee a minimum number of hours.

Around 13% of employers surveyed reported some use of NGHCs, including almost half of all businesses in the tourism, catering and food sectors. More than one in five employers in health and social work reported using them, although they were found to be relatively rare in financial and professional services and the manufacturing, energy and agricultural industries.

Larger employers were much more likely to use NGHCs than smaller ones. Nearly half of businesses with 250 or more employees make some use of NGHCs compared with 12% of businesses with fewer than 20 employees.

The new estimate is the result of the first employer-based survey on NGHCs conducted by the Office for National Statistics. To date its only other related estimate has been from employees taking part in the Labour Force Survey (LFS). That total was most recently put at 583,000, suggesting that a number of people work for more than one employer. The LFS also shows that people working on “zero-hours contracts” were more likely to be female (55%), in full-time education (18%) or part-time workers (64%) than the rest of the workforce. They were also more likely to be under 25 or over 65 years old.

In addition to those NGHCs reported to be in use during the two-week survey period, ONS found evidence of a further 1.3 million contracts where no work was undertaken. 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 employer 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 undertake further research in this area and report later in 2014.