IoD warns Labour that without zero-hour contracts job creation will suffer

As Labour MP Chuku Umunna holds a summit on zero-hour contracts today, business group the Institute of Directors (IoD) has slammed claims that those on these flexible jobs early £6 less per hour than other workers.

Alexander Ehmann, head of employment policy at the IoD, says:

Claims that employees without guaranteed hours are paid less for each hour worked do not stack up. Looking at the average figure doesn’t give us any useful guidance. The hourly wage for these employees, who make up less than 1% of the workforce, is lower on average because they work typically in entry-level roles, often in low-paid sectors such as retail and hospitality.

I have made this point to the Shadow Business Secretary at the summit today. He has acknowledged that these contracts can help workers who need to be flexible with their hours, as well as employers who need to manage peaks and troughs in the workload. I hope to convince him that banning them would make it harder for employers to take on staff, meaning fewer hours of work for those who need them.

The majority of IoD members run small or medium-sized companies. Ten per cent of them use ‘zero-hour contracts’. Those that do, use them for about ten per cent of their staff. For these employers, the flexibility allows them to create jobs that would otherwise be too risky while the recovery is still delicate.