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ONS to change how it measures zero-hours contracts

The Office for National Statistics (ONS) is to change the way it measures the number of people on zero-hours contracts after discovering that current figures are based on inaccurate data.

The ONS said it will include some questions on zero-hours contracts in its quarterly business surveys.

It plans to launch a consultation next month with the first results expected to be released early next year.

The current estimate of the number of workers on zero-hours contracts is based on an ad-hoc analysis of employee responses collected in the regular household survey, the Labour Force Survey (LFS). The ONS said the question depends on employees knowing and correctly reporting their terms of employment. 

The furore surrounding zero-hours contracts emerged last month when it was revealed that the contracts were being used by a number of retailers, including Sports Direct.

Glen Watson, director general at the ONS, said: “ONS’s role is to provide reliable statistics that inform debate and improve decision making. We have followed the debate on zero-hours contracts and there is a clear need for better statistics. The best way to gather the information needed is to ask employers rather than individual employees. They are best placed to provide accurate information about the employment terms of their workforce. We plan to add some new questions to one of our business surveys to shed new light on this important issue.” 

The ONS 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. 

However, a survey by the Chartered Institute of Personnel and Development (CIPD) estimated that 1 million people were on such contracts.

Business secretary Vince Cable has ordered a review of zero-hours contracts following growing criticism over their use.

Different sets of figures have emerged about the number of people who are on such contracts. Earlier this week, research by the Recruitment and Employment Confederation found they are used by 27% of companies. Meanwhile, a survey by the CIPD found that 10% of retail workers, about 300,000 people, are employed on zero-hours contracts. Such contracts give no guarantee of regular hours, sick pay or holiday.

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