Official statistics to track controversial 'zero hours' employment contracts

The Office for National Statistics is to start asking employers how many people they employ on "zero-hours contracts" following criticism that it has failed to capture this new and controversial hiring trend.

Almost unheard of in the rest of Europe and the United States, the growth of such contracts – which offer no guaranteed work or pay – has been said by some to explain the resilience of the UK's labour market. One in five jobs created in Britain since late 2008 has been on zero-hours.

The Office for National Statistics said yesterday it would launch a consultation next month with a view to publishing more accurate figures on the contracts early in 2014.

The Bank of England's recent decision to link any rise in interest rates to the health of the labour market has only heightened the need for more accurate data. The Business Secretary Vince Cable launched a review into the use of zero-hour contracts in June.

The current estimate of zero-hours contracts is based on an ad hoc analysis of employee responses collected in the regular Labour Force Survey. While this survey is the largest of its kind in the country, its accuracy depends on employees correctly reporting their terms of employment. In practice, many people on zero-hours contacts have simply marked themselves as contract workers.

The Office for National Statistics estimated earlier this month that 250,000 Britons were employed on zero-hours contracts at the end of 2012, an upward revision to its earlier estimate of 200,000.

The Chartered Institute for Personnel and Development however reckons 3 to 4 per cent of Britons are on the contracts, equivalent to 1 million people.