Number of zero-hours contracts falls to three-year low in UK
The number of people in the UK on zero-hours contracts has fallen to its lowest in over three years, according to the Office for National Statistics (ONS). In May, there were an estimated 1.4 million such contracts, down from 1.7 million in the same month the previous year. The figure was the lowest since January 2014. However, despite this fall, the percentage of zero-hours contracts among all employment agreements remains unchanged at 5%. ONS data for the three months to June shows 883,000 people on zero-hours contracts, down from 903,000 for the same period in 2016.

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

This section looks at the latest estimates from the Labour Force Survey (LFS) for the period April to June 2017 and the business survey for May 2017. Estimates from surveys are, due to sampling error, subject to a degree of uncertainty. Where available, an indication of the level of uncertainty is provided in 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 of 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 classes as being on a “zero-hours contract” will be those who:

are employed (have done at least 1 hour of paid work in the week before they were interviewed or reported that they were temporarily away from their job)

report that their working arrangements in their main employment include some form of flexibility

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. This might exclude some people who select another option, such as on-call working, although they have the opportunity to report a “zero-hours contract” as well.

The latest estimate from the LFS shows that 883,000 people reported that they were on a “zero-hours contract” in the period April to June 2017, representing 2.8% of people in employment. This is 2.2% lower than the reported figure from the same period in 2016 (903,000 or 2.9% of people in employment). This fall in the number of people reporting to the LFS that they were on a “zero-hours contract” breaks the upward trend that was observed since 2011. The upward trend that we saw between 2011 and 2016 was likely to have been affected by greater awareness and recognition of the term “zero-hours contract”. Figure 1 shows the number of people in employment on a “zero-hours contract” from 2000 to 2017. Comparisons with 2012 and earlier years are complicated by a large increase between 2012 and 2013 that appeared to be due mainly to increased recognition of “zero-hours contracts”. This change was covered in a previous ONS report published on 30 April 2014.

Figure 1: Number (thousands) of people in employment reporting they are on a zero hours contract, 2000 to 2017 Source: Office for National Statistics Notes: The number of people who are shown as on a zero hours contract at any point in time will be affected by whether people know they are on a zero hours contract and will be affected by how they are aware of the concept. Estimates presented in Figure 1 are non-seasonally adjusted so comparisons of change should be made based on the same period each year. Additionally estimates from surveys are subject to a degree of uncertainty. Download this chart Figure 1: Number (thousands) of people in employment reporting they are on a zero hours contract, 2000 to 2017 Image .csv .xls

When looking at the length of time in current job, the fall in “zero-hours contracts” on the year is driven by a fall in the number of people being in their job for less than 5 years. The fall in the three categories (less than 12 months, 1 year but less than 2 and 2 years but less than 5) comprising people in employment in their job for less than 5 years is only partially offset by increases on the year in the number of people who were in their job over 5 years (5 years but less than 10 years and 10 years or more) (Figure 2).