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Analysis of Employee Contracts that do not Guarantee a Minimum Number of Hours

Released: 30 April 2014 Download PDF

1. Summary

There is no legal definition of “zero-hours contracts”. Consequently, different groups and bodies will not only measure the number of such contracts in different ways, they will also have different perceptions of what should be included as “zero-hours contracts”. Significantly, the perceptions of employers and employees on what constitutes a particular type of contract will differ. Also, estimates from both employers and employees may be influenced by their level of awareness of such contracts.

However, as Section 2 of the Government’s consultation on zero-hours contracts sets out: “In general terms, a zero-hours contract is an employment contract in which an employer does not guarantee the individual any work and the individual is not obliged to accept any work offered”. So although various bodies and surveys use slightly different definitions, there is the common factor of a lack of a guaranteed minimum number of hours of work.

In meeting its intention to produce an estimate of the number of “zero-hours contracts” from a business survey, ONS has concluded that the most useful definition to use is contracts that do not guarantee a minimum number of hours, rather than “zero-hours contracts” and that it should be designated in that way. This includes, but is not exclusively, “zero-hours contracts” and will include some other contract types that do not guarantee a minimum number of hours.

The provisional estimate from the ONS survey of 5,000 businesses indicates that in January to February 2014 there were around 1.4 million employee contracts that do not guarantee a minimum number of hours, which provided work in the survey reference period of the fortnight beginning 20 January 2014. This is the official ONS estimate based on a survey of businesses.

The most recent estimate, published on 19 February 2014, of the number of people who are employed on “zero-hours contracts” in their primary employment, from the Labour Force Survey (LFS) of individuals in households, is 583,000, for the period October to December 2013. This relates specifically to the individual’s perceptions of whether they are employed on the specific type of contract – a “zero-hours contract”.

Estimates from employers are likely to be higher than those from individuals for a number of reasons. Employers may be more aware of formal contractual arrangements of their employees. In addition, one person can hold more than one contract and/or there may be people working on such a contract in addition to their primary employment and/or their working patterns may mean they do not consider themselves to be covered by such a contract. However, even if it were possible to take account of all these factors, it remains unlikely that the two estimates would be the same. This is because they are based on the perceptions of two different groups.

In comparing both figures, it must be noted that they are both ‘point-in-time’ estimates, and that whilst the LFS data exists for several years back, the business survey data is the first estimate of its type. It is not, therefore, possible to say from the business survey whether the number of employee contracts without a guaranteed minimum number of hours of work is increasing or decreasing.

From the ONS survey of businesses, and in addition to those that provided work in the reference period, there are also employee contracts that do not guarantee a minimum number of hours, that did not provide work in the survey reference period of the fortnight beginning 20 January 2014. These contracts are more difficult to analyse, as we do not currently have many more details about them. However, some evidence from qualitative analysis indicates that these include a mixture of: people with contracts with several employers (who will be included in the headline estimate if they worked for one of those 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 will probably include some people that need to be added to the official 1.4 million estimate but this needs to be investigated in more detail, and ONS will undertake further research in this area and report later in 2014. The initial estimate of the number of employee contracts that do not guarantee a minimum number of hours, that did not provide work in the survey reference period of the fortnight beginning 20 January 2014 is around 1.3 million.

Looking at the types of people employed on “zero-hours contracts”, the Labour Force Survey shows that they are more likely to be women, in full-time education or in young (16-24) or older (65 and over) age groups, perhaps reflecting a tendency to combine flexible working with education or working beyond state retirement age. Nearly two thirds of people employed on “zero-hours contracts” work part-time compared with around a quarter of people not employed on “zero-hours contracts”. On average, someone on a “zero-hours contract” usually works 25 hours a week compared with 37 hours a week for people not employed on “zero-hours contracts”. Just over a third of those employed on a “zero-hours contract” want more hours, with most wanting them in their current job. This is somewhat greater than for people not employed on a “zero-hours contract”.

2. Introduction

There has been significant interest over the last year around the issue of “zero-hours contracts”. However, the debate around the figures has been clouded by the lack of a single definition of what such a contract is and the most appropriate source for the data. Most available definitions refer to contracts where a person is not contracted to work a set minimum number of hours, is only paid for the work that they do, and is not obliged to accept hours if offered.

Labour Force Survey estimates

To date, the only ONS data on “zero-hour contracts” has come from the Labour Force Survey (LFS), which is a survey of individuals in households and classifies people according to their responses to the survey. On the LFS, “zero-hours contracts” is one of a number of options in response to a question relating to flexible working asked to people in employment. For the LFS, “zero-hours contracts” are defined as “where a person is not contracted to work a set number of hours and is only paid for the number of hours they do”. The latest LFS estimate for people on “zero-hours contracts” is 583,000 for the period October to December 2013.

The LFS estimate differs from some of the other figures in the public domain that come from surveys of businesses. A current example of such a survey is the Labour Market Outlook Survey carried out for the Chartered Institute of Personnel and Development (CIPD). Business surveys will give different results to the LFS as they will relate to employee contracts, rather than people (who can have more than one contract). Businesses may be more aware of their employees’ formal contractual arrangements and so report a “zero-hours contract”, when the employee, due to their working pattern, may not perceive that they are covered by such an arrangement.

Further analyses have also been undertaken on the LFS by the Department for Business, Innovation and Skills.

Other sources

The CIPD Labour Market Outlook survey defines “zero-hours contracts” as “an agreement between two parties that one may be asked to perform work for the other, but there is no set minimum number of hours. The contract will provide what pay the individual will get if they do work and will deal with the circumstances in which work may be offered (and, possibly, turned down)”. Information was collected from a sample of 1,000 businesses, who were each asked what proportion of their workforces were employed on “zero-hours contracts”. The returned data were used to estimate that in summer and autumn 2013:

  • 23% of organisations have one or more people on a “zero-hours contract”;

  • among those companies using “zero-hours contracts”, the average proportion of the workforce on “zero-hours contracts” is 19%.

Using this information, CIPD estimated that around 1 million people, or about 3% of the workforce, were on zero-hours contracts, nearly double the number reported on the LFS for 2013.

Other estimates from employers include estimates for the NHS and the domestic care sector, which put the number on “zero-hours contracts” at 75,000 and 300,000, respectively; based on returns by NHS trusts and estimates from a different data set covering social work in England and Wales.

Launching the ONS business survey

Given the differences in the definitions, perceptions and estimates between the outside surveys of businesses and of individuals in the LFS, ONS decided to undertake its own survey of businesses, announced on 22 August 2013. The aim was to produce an estimate of “zero-hour contracts” that would complement the existing LFS estimates and could also be compared to other employer estimates.

Section 3 looks at how the ONS business survey was set up, including how the questions were defined. Section 4 considers how the initial results from the ONS survey of contracts without a guaranteed minimum number of hours compare with the estimates of “zero-hours contracts” from the LFS and other employer surveys. Section 5 then looks at available information on the characteristics of people employed on such contracts, including the hours they work, the type of work they do and personal characteristics.

 

3. Defining “zero-hours contracts” and “no guaranteed hours contracts”

What are “zero-hours contracts”?

One of the problems with producing estimates of “zero-hours contracts” is the lack of a single agreed definition of what such a contract is. While some contracts are explicitly called zero-hours contracts, there are other definitions available and used in published statistics. These include:

  • LFS: “where a person is not contracted to work a set number of hours and is only paid for the number of hours they do”;

  • CIPD: “an agreement between two parties that one may be asked to perform work for the other, but there is no set minimum number of hours. The contract will provide what pay the individual will get if they do work and will deal with the circumstances in which work may be offered (and, possibly, turned down)”;

  • Department for Business, Innovation & Skills (Section 2 of zero-hours consultation) “There is no legal definition of a zero-hours contract in domestic law. In general terms a zero-hours contract is an employment contract in which the employer does not guarantee the individual any work, and the individual is not obliged to accept any work offered. An example of a clause in a zero-hours contract which does not guarantee a fixed number of hours work per week is: ‘The Company is under no obligation to provide work to you at any time and you are under no obligation to accept any work offered by the Company at any time.’”;

  • HM Revenue & Customs: “A zero-hours contract generally is a contract where the employer does not guarantee to provide the worker with work and will only pay the worker for those hours which are actually worked.”

The common element to these definitions is the lack of a guaranteed minimum number of hours.

Therefore, the focus for question development for the business survey was around describing what needed to be measured rather than naming the contract.  Looking from the employer’s perspective, the term zero-hours contract was not familiar to some employers until recently.  The term used by employers may vary depending on the type of employer and/or industry.  The following have all been used by employers when describing a zero-hours contract arrangement: casual worker, on-call relationship, hours to be notified and occasional professional assistance.

When developing the survey of businesses, ONS consulted on the definition to be used and decided on the ‘lack of any guaranteed hours’. To provide clarity and prevent confusion with the other estimates of “zero-hours contracts” the remainder of this article will refer to estimates from the ONS business survey as no guaranteed hours contracts (NGHCs). This includes, but is not exclusively, “zero-hours contracts” and will include some other contract types that do not guarantee a minimum number of hours.

When comparing figures from the ONS business survey with the LFS estimates, a number of issues need to be considered:

  • The LFS counts people who report that their primary employment is a “zero-hours contract”;

  • The estimate from businesses is counting employee contracts that are NGHCs. This will be greater than the number of people, as people can have more than one contract;

  • Estimates from businesses will include contracts that cover a variety of working arrangements. These will include instances of people in their primary employment who are working a regular number of hours a week (although these hours are not guaranteed by their contract), as well as those who work on an irregular basis due to personal choice, availability for work or to fit in around their primary means of employment.

 

4. How many no guaranteed hours contracts (NGHCs) are there?

There are a number of existing estimates of the number of NGHCs in the public domain from different sources. This section looks at the most high profile estimates. Most of the sources are from sample surveys so will be subject to a degree of uncertainty. Where available, an indication of the level of uncertainty is shown at Annex 1.

Labour Force Survey

The LFS samples around 40,000 households a quarter and collects information about people’s employment status. One of the questions on the LFS asked to people in employment relates to special working arrangements that vary daily or weekly. Respondents can choose up to three different arrangements from a list of eight options, one of which is “zero hours contracts” defined as “where a person is not contracted to work a set number of hours, and is only paid for the number of hours that they actually work”.

As the LFS is based on respondents’ views about their working arrangements, and counts people rather than contracts, it is likely that any estimate of “zero-hours contracts” from the LFS will be less than an estimate obtained from businesses. The number of people the LFS classed as being on a “zero-hours contract” will be those who:

(a) are employed (have done at least one hour of paid work in the week before they were interviewed or reported that they were temporarily away from their job);

(b) report that their working arrangements include some flexibility and that their hours can vary; and

(c) recognise that the flexibility of their working arrangements is a result of being on a “zero-hours contract”.

Therefore, the people identified by the LFS as being on a “zero-hours contract” will be those in employment who are aware that their contract allows for them to be offered no hours.

The latest estimate from the LFS shows that 583,000 people reported that they were on a “zero-hours contract” in the period October to December 2013. This is more than twice the reported figure from the same period in 2012 (250,000). Looking at the difference between 2012 and 2013, a large part of the increase would appear to be from people who previously reported no flexible working arrangements (see Chart 1). Some of this increase is likely to be due to the increased awareness of “zero-hours contracts” following the coverage in the media.

This conclusion is backed up when the length of time in current job is considered. Around half of the increase in the level of “zero-hours contracts” is for people who have been in their job for more than a year, so would not be “new” contracts. However, the number of people working less than a year also increased indicating that at least some of the rise between 2012 and 2013 may have been a genuine rise in the number of “zero-hours contracts”, although increased awareness is likely to be the main driver of change for this group as well (Chart 2). Therefore, zero hours contracts are unlikely to be a key driver of the increase in total employment, as these people were probably already in the employment estimates, but in another (non “zero-hours contracts”) category.

Figure 1: Percentage change in LFS flexible working responses, by category, between October to December 2012 and October to December 2013

Figure 1: Percentage change in LFS flexible working responses, by category, between October to December 2012 and October to December 2013
Source: Labour Force Survey - Office for National Statistics

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Figure 2: Change in the number of “zero-hours contracts” by length of employment, October to December 2012 to October to December 2013

Figure 2: Change in the number of “zero-hours contracts” by length of employment, October to December 2012 to October to December 2013
Source: Labour Force Survey - Office for National Statistics

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ONS business survey

The ONS business survey asked a sample of 5,000 businesses how many people were employed on contracts that do not guarantee a minimum number of hours (NGHCs). It is the first time this has been asked, and therefore the results are an initial ‘point-in-time’ estimate; this must be recognised when comparing the estimates with other figures. The initial estimates from the employer survey indicate that there were 1.4 million employee contracts that do not guarantee a minimum number of hours, which also provided work in the survey reference period of the fortnight beginning 20 January 2014. Providing work in the reference period is the key aspect here, as it confirms that these were active contracts and related to current jobs.

The ONS business survey data, as is the case with the LFS, has been collected from a sample, rather than the whole population. Whilst the sample was designed to allow for this, and be as accurate as possible, results from sample surveys are always estimates, not precise figures. This means that they are subject to some uncertainty, and these are provided in Annex 1. However, 1.4 million is the best estimate of the number of employee contracts that do not guarantee a minimum number of hours that provided work in the reference period of the fortnight beginning 20 January 2014.

In addition to those that worked in the reference period, there are also employee contracts that do not guarantee a minimum number of hours, where work was not undertaken in the survey reference period of the fortnight beginning 20 January 2014. These are more difficult to analyse, as we do not currently have many more details about them. However, some evidence from the qualitative analysis indicates that these include a mixture of: people with contracts with several employers (who will be included in the headline estimate if they worked for that employer); 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 will probably include some people that need to be added to the official 1.4 million estimate but this needs to be investigated in more detail, and ONS will undertake further research in this area and report later in 2014. The initial estimate of the number of employee contracts that do not guarantee a minimum number of hours, where work was not undertaken in the survey reference period of the fortnight beginning 20 January 2014 is around 1.3 million, but this requires considerable further investigation.

Looking further at the 1.4 million employee contracts, which did provide work in the reference period, the ONS business survey estimated that 13% of businesses make some use of NGHCs. The proportion of businesses using NGHCs differs across businesses of different size and between industries. Chart 3 shows the proportion of businesses using NGHCs by size of business. It shows that nearly half of businesses with 250 or more employees make some use of NGHCs compared with 12% of businesses with fewer than 20 employees.

Figure 3: Proportion of businesses using NGHCs by size of business

Figure 3: Proportion of businesses using NGHCs by size of business
Source: Office for National Statistics

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Looking at industrial sector, the proportion of businesses using NGHCs varies considerably (Chart 4). The industrial classification of the businesses is based on the Standard Industrial Classification (SIC) 2007 - this defines most of ONS’ business surveys and is based on the European Communities classification of Economic Activities. Some of the classification sections (letters A-S) have been grouped, to address quality issues from small sample sizes.

In Accommodation and Food Services, 45% of businesses make some use of NGHCs, with Health and Social Work having more than one in five businesses using them. However, relatively few businesses in Financial, Insurance and Professional, Scientific and Technical Activities and Production plus Agriculture use NGHCs.

Figure 4: Proportion of businesses using NGHCs by industry

Figure 4: Proportion of businesses using NGHCs by industry
Source: Office for National Statistics

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Comparison of LFS and ONS business survey

The number of NGHCs from the business survey is higher than the figure reported in the LFS. The results of the business survey will differ from the LFS for a number of reasons:

i. employers and employees will have differing perceptions and awareness about the types of employment contracts used;

ii. the employer survey will count employee contracts, not people, and will provide higher estimates (as one person can have more than one contract);

iii. employers in the business survey may report multiple contracts for each job;

iv. the questions asked of respondents differed slightly, with the business survey asking about contracts not guaranteeing any hours, while the LFS question uses the term “zero-hours contracts”;

v. the LFS includes all people in employment (including the self-employed) while the business survey only includes employees.

Figure 5 shows the distribution by industry of NGHCs from the ONS business survey and “zero-hours contracts” from the LFS. Where there are differences in the distributions, this will be partly due to how people are classified in the two surveys. In the LFS people are self-classified to an industry. Businesses are allocated to the industry where most of their employees work.

This means that many local authorities are classified to Education (section P of the SIC), while their employees will cover other areas such as social work (section Q), public administration (section O) and recreation (section R). Similarly, employment agencies are classified to Administration & Support Services (Section N), while people employed by them, but placed at another employer, may give a different answer in the LFS. The distribution may also be affected by the business survey including second jobs.

Figure 5: Proportion of workers on “zero-hour contracts” by industry

Figure 5: Proportion of workers on “zero-hour contracts” by industry
Source: Office for National Statistics

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* LFS data not available, for quality reasons, due to small sample sizes

Other measures

The recent report from the CIPD, based on their 2013 Labour Market Outlook Survey (which sampled 1,000 employers), suggested that 23% of organisations have at least one person on a “zero-hours contract” (defined as a contract with no minimum contracted hours). The CIPD surveys also estimated that where businesses use “zero-hour contracts”, around 19% of the workforce were employed on them. On that basis, CIPD estimated that around 1 million people, or about 3% of the UK workforce, were on “zero-hours contracts”.
The difference between the ONS business survey and CIPD estimates may partly be explained by differences in the sample selected. Nearly two thirds of the organisations in the CIPD sample had employment of 250 or more compared with a third of the ONS sample. Information from the ONS survey indicates that larger companies (250 or more employees) are more likely to use NGHCs, with nearly half using them compared with one in eight of smaller businesses. However, when they do use them, smaller businesses have a larger proportion of their workforce on NGHCs compared to larger businesses.

 

5. What is the experience of people employed on “zero-hours contracts”?

Whilst the ONS business survey provides a measure of the number of employee contracts that do not guarantee hours, the LFS can provide information about the type of people who report that their primary employment is on a “zero-hours contracts”. 

Who are they?

Looking at the type of people who report that they are employed on a “zero-hours contract”, compared to other people in employment who are not on a “zero-hours contract”, shows that there are differences in their characteristics (Figures 6 and 7). For October to December 2013:

  • women make up a bigger proportion of those reporting working on “zero-hours contracts” (55%) compared with those employed who are not on “zero-hours contracts” (46%)

  • 18% of people on “zero-hours contracts” are in full-time education compared to 3% of those employed who are not on “zero-hours contracts”

  • 64% of people on “zero-hours contracts” reported that they worked part time, compared with a quarter (27%) of those employed who are not on “zero-hours contracts”

  • people who report being on a “zero-hours contract” are more likely to be younger or older. 36% of people on “zero-hours contracts” are aged 16 to 24 and 7% are aged 65 and over (compared with 12% and 4% respectively for those employed who are not on “zero-hours contracts”).

These patterns may partly reflect the groups most likely to find the flexibility of “zero-hours contracts” an advantage. For example, young people who combine flexible working with their studies or people working beyond state pension age.

Figure 6: Proportion of people in employment by gender, full-time education and part-time employment

Figure 6: Proportion of people in employment by gender, full-time education and part-time employment
Source: Office for National Statistics

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Figure 7: Proportion of people in employment by age

Figure 7: Proportion of people in employment by age
Source: Office for National Statistics

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Hours worked and flexibility

The majority of people on “zero-hours contracts” (64%) reported that they worked part time, compared with a quarter (27%) of others in employment. This means that the average usual weekly hours worked in their main job by someone on a “zero-hours contract” is lower, at 25 hours per week, compared to 37 hours for those employed but not on a “zero-hours contract”.

In October to December 2013, 16% of people on “zero-hours contracts” worked no hours in the week before their LFS interview compared with 11% of people not employed on “zero-hours contracts”.

Comparing usual hours worked with actual hours worked in the reference week, Chart 8 shows the differences between actual and usual hours worked for people on “zero-hours contracts” and those not employed on “zero-hours contracts”. For October to December 2013:

  • 42% of people on “zero-hours contracts” worked their usual hours in the week before the LFS interview compared with 58% of employed people not on “zero-hours contracts”;

  • 41% of people on “zero-hours contracts” worked less than their usual hours in the week before the LFS interview compared with 31% of employed people not on “zero-hours contracts”;

  • 18% of people on “zero-hours contracts” worked more than their usual hours in the week before the LFS interview compared with 11% of employed people not on “zero-hours contracts”.

Figure 8: Actual hours minus usual hours, October to December 2013

Figure 8: Actual hours minus usual hours, October to December 2013
Source: Office for National Statistics

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About a third (35%) of people on “zero-hours contracts” want more hours compared to 12% of those not on “zero-hours contracts”. Looking in more detail, 11% of people on “zero-hours contracts” would like a different job with more hours and 14% are actively looking for another job. For people not on “zero-hours contracts”, these rates are 2% and 3% respectively (the remainder would like more hours in their current job or an additional job). More people on “zero-hours contracts” want more hours than those not on “zero-hours contracts”, though this could be linked to a higher proportion of “zero-hours contract” jobs being part-time.

Figure 9: Looking for more hours, October to December 2013

Figure 9: Looking for more hours, October to December 2013
Source: Office for National Statistics

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Other sources

As well as surveying employers, CIPD also carry out a survey of employees, identifying those on “zero-hours contracts” by asking if they have no minimum contracted hours in their primary employment. Where there are comparable figures, results from the CIPD survey are similar to those from the LFS and show that:

  • Those employed on “zero-hours contracts” typically work on average 24 hours a week (compared with 25 from the LFS);

  • 38% of those employed on “zero-hours contracts” would like to work more hours (compared with 35% from LFS);

  • 24% of those employed on “zero-hours contracts” are looking for another job (compared with 14% from the LFS).

The CIPD survey also asks employees directly about their experience of working on a “zero-hours contract”, including their levels of satisfaction which show that 47% of those employed on “zero-hours contracts” are satisfied with having no minimum contracted hours compared with 27% being dissatisfied.

6. Conclusions

There is no legal definition of “zero-hours contracts” and there are a number of different definitions and perceptions relating to this concept. The common element to most of the definitions relates to the lack of a guaranteed minimum number of hours of work. This is the definition used by the ONS in its survey of businesses. This includes, but is not exclusively, “zero-hours contracts” and will include some other contract types that do not guarantee a minimum number of hours. However, this will give different results to the LFS measure of people in employment, as the perceptions of employees and employers will differ.

The provisional ONS estimate from businesses indicates that for January to February 2014, there were 1.4 million employee contracts that do not guarantee a minimum number of hours, that provided work in the reference period of the fortnight beginning 20 January 2014. This is higher than the LFS estimate of 583,000 for the number of people in whose primary employment is on a “zero-hours contracts” for October to December 2013. The difference between the two estimates will partly be due to employees being able to have more than one contract (including people who supplement their primary employment with a NGHC), employers being more aware of the contractual arrangements of their employees as well as the differing perceptions of the two groups.

From the ONS survey of businesses, and in addition to those that provided work in the reference period, there are also 1.3 million employee contracts that do not guarantee a minimum number of hours, that did not provide work in the survey reference period of the fortnight beginning 20 January 2014. These contracts are more difficult to analyse, as we do not currently have many more details about them. Overall, this will probably include some people that need to be added to the official 1.4 million estimate but this needs to be investigated in more detail, and ONS will undertake further research in this area and report later in 2014.

Looking at the LFS data shows that the characteristics of people on “zero-hours contracts” are different from people not employed on “zero-hours contracts”. People on “zero-hours contracts” are more likely to be women, in full-time education, young (aged 16-24) or older (aged 65 and over). These patterns may partly reflect the groups most likely to find the flexibility of “zero-hours contracts” an advantage. For example, young people who combine flexible working with their studies or people working beyond state pension age.

Nearly two thirds of people on “zero-hours contracts” are part-time compared with around a quarter of people not on “zero-hours contracts”. While more people on “zero-hours contracts” want more hours (around a third) when compared to people not on “zero-hours contracts” this may be linked to the higher incidence of part-time working.

Around 14% of people on “zero-hours contracts” are looking for another job, more than for people not on “zero-hours contracts”, but indicates that most people on “zero-hours contracts” are currently content to stay with their job which is the same conclusion drawn from the CIPD data.

As for next steps, the combination of the employer, and employee, based estimates has proved highly valuable in providing a more complete picture of people on NGHCs or “zero-hours contracts”. The ONS will carry out further analysis of the data collected as part of the business survey, specifically in getting more details about those who did not work in the fortnight reference period. It will report on this later in 2014. ONS also plans to conduct a further survey to businesses, similar to the one carried out in February, during summer 2014 and will report by end 2014.

 

Annex 1 – Measures of uncertainty

We can calculate the level of uncertainty (also called “sampling variability”) around a survey estimate by exploring how that estimate would change if we were to draw many survey samples for the same time period instead of just one. This allows us to define a range around the estimate (known as a “confidence interval”) and to state how likely it is in practice that the real value that the survey is trying to measure lies within that range. Confidence intervals are typically set up so that we can be 95% sure that the true value lies within the range – in which case we refer to a “95% confidence interval”.

Labour Force Survey

The estimate of 583,000 people employed on “zero-hour contracts” has a 95% confidence interval of ±61,000, which means the true figure is likely to lie between 522,000 and 645,000.

ONS business survey

The estimate of 1.4 million employee contracts that do not guarantee hours where work was provided in the reference period of the fortnight starting 20 January 2014 has a 95% confidence interval of ±240,000, which means the true figure is likely to lie between 1.2 million and 1.7 million.

The standard errors by broad industry groups are shown in Table 1:3

Table 1: Employee contracts that do not guarantee minimum hours which provided work in the reference period of the fortnight beginning 20 January 2014

Millions

95 % confidence intervals
Central estimate Lower Upper
TOTAL 1.42 1.18 1.66
A- E Production plus Ag. Fish and Mining 0.04 0.01 0.08
F Construction 0.05 0.02 0.07
G Wholesale and Retail 0.14 0.01 0.27
I Accommodation and Food  0.37 0.28 0.46
J-M Information, Finance,  Professional 0.03 0.00 0.05
N Admin and support services 0.36 0.22 0.50
O Public admin 0.01 0.00 0.02
P Education 0.07 0.02 0.12
Q Health and Social work  0.19 0.13 0.26
RS+H Transport, Arts, Other  0.16 0.09 0.22

Table source: Office for National Statistics

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Background notes

  1. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

Content from the Office for National Statistics.
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