New figures released by the Office of National Statistics (ONS) have revealed that nearly one million UK workers are on zero-hours contracts. Stats for the final quarter of 2016 show that the number of zero-hours workers rose by 13% compared to the same quarter 12 months previously.

However, ONS analysis reveals that zero hours contracts are in decline. A small increase of 0.8% in Q2 of 2016 is significantly lower than the 7.7% increase during the same quarter of 2015. Experts believe this is due to a combination of factors.

Record zero hour contracts

The Rise of Zero-Hours Contracts

Zero-hours contracts became popular following the 2009 recession. Employers sought to cut costs and with unemployment levels high, job applicants could not afford to be picky. Since then, the number of workers on zero-hours contracts has risen sharply.

This type of contract is mostly found in the low-paid sector and is commonly used by businesses operating in hospitality and retail. Workers on zero-hours contracts are not guaranteed a minimum number of hours, but they are required to be flexible.

Exploitative Working Practice

Many believe this type of contract to be exploitative. Workers have no job security and they are not guaranteed any income, which makes it impossible to take on long-term debt such as a mortgage. There is also evidence to suggest that workers on zero-hours contracts are paid significantly less than workers in comparable jobs.

The Unite union has urged the UK government to outlaw the practice of zero-hours contracts. It says the government should follow the example set by New Zealand, where workers’ welfare is prioritised.

The Sports Direct Controversy

Sports direct zero hour contract

Zero-hours contracts hit the headlines following the Sports Direct controversy. Since then, many well-known companies have scrapped these contracts and given their employees the chance to move on to different contracts with guaranteed working hours. The controversy surrounding ‘hire and fire’ zero-hours contracts has also contributed to their decline in the last six months.

Companies that use zero-hours contracts suffered a lot of negative PR in the media, causing many big name firms to rethink their hiring practices. Following revelations that 90% of the Sport Direct workforce were on zero-hours contracts and forced to work in conditions described as a “gulag”, the company has since given all casual retail employees the opportunity to stick with their existing zero-hours contract or move on to a different contract with a minimum number of hours; Mike Ashley later apologised for the “serious shortcomings” at the company’s Shirebrook warehouse.

Zero-Hours Contracts are Beneficial for Some Workers

It isn’t all bad news. Workers on zero-hours contracts do have some rights, including an entitlement to annual leave. In some cases, zero-hours contracts can actually be beneficial since workers are not obliged to work set hours. For students, parents, and anyone else who needs flexibility, a zero-hours contract is better than a standard contract of employment.

For everyone else, however, the news that zero-hours contracts could be on the way out is cause for celebration. What do you think? Are Zero hours contracts good or bad?