There's nothing to fear from the rise of zero-hours contracts. Here's why

 
Guy Bentley
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In 2013, the number of employees on zero-hours contracts reached 582,935, more than double the number estimated by the government last August, according to revised figures from the Office for National Statistics (ONS).

The number of people on zero-hours contracts has tripled since the coalition government took office in 2010. To many, this development in the UK's labour market is not a welcome one.

On Sunday, shadow business secretary Chuka Umunna, claimed that a "rising tide of insecurity" in the labour market was turning a "once niche element of the labour market into the norm."

Umunna said on Sunday:

Labour would tighten up the rules to outlaw zero-hours contracts where they exploit people and turn around the rising tide of insecurity we've seen under the Tory-led government.

Zero-hours contracts have been a constant source of controversy over recent years.

However, the fear over the rise of zero-hours contracts may be largely misplaced, when one takes into account the state of the UK economy in recent years and the changes that have transformed the world of work to cater to a variety of lifestyles and circumstances.

A zero-hours contract does not oblige the employer to provide any work for the employee or oblige the employee to accept work that is offered. There are no guaranteed hours set for work. An employee must be available to work as and when required and is paid only for the hours worked.

Over the past several years companies have, to say the least, faced a risky economic climate. Employers are only able to create jobs when they are certain hours and finance exist to provide them.

Firms have often lacked the certainty to offer contracts with guaranteed hours. However, zero-hours contracts have give firms flexibility in uncertain times.

In many ways, arrangements such as zero-hours contracts have acted as an employment stabiliser.

It would also be incorrect to assume that everyone working on a zero-hours contract wants more hours. Students and parents can be particular beneficiaries of the flexibility zero-hours contracts provide.

In November, the Chartered Institute of Personnel and Development (CIPD) revealed a survey that found employees on zero-hours contracts were equally satisfied with their jobs as other employees.

47 per cent of people employed on a zero-hours basis were satisfied having no minimum working time set, as opposed to 27 per cent who were dissatisfied.

People without a specified number of hours actually reported a better work life balance, according to the CIPD. It would also be a mistake to believe that the growth of these contracts prior to the coalition, was due to an especially flexible labour market.

Between 2008 and 2010 Britain fell from a mediocre 17th in the world ranking of labour market flexibility to a dismal 35th, according to the World Bank.

With unemployment still running at 7.2 per cent, zero-hours contracts provide a necessary tool in keeping levels of joblessness down at a time when many other European countries with less flexible labour markets have seen staggering levels of unemployment.