Zero-Hours Contracts: Just the Tip of the Iceberg

New analysis from the British Trade Union Congress (TUC) reveals that zero-hours contracts are only the beginning of a wider crisis in low-paid and insecure work across the UK.

Scale of Insecure and Low-Paid Work

In addition to the 700,000 workers on zero-hours contracts, a further 820,000 employees report being underemployed on between 0 and 19 hours per week.

Underemployment and Pay Disparities

Workers on short-hours contracts (fewer than 20 hours a week) earn an average of £8.40 per hour, compared to £13.20 per hour for all employees. This significant gap highlights how limited hours drastically reduce take-home pay.

National Insurance Loopholes

Employers can exploit short-hours contracts—which may guarantee as little as one hour per week—to avoid paying National Insurance contributions. Under current rules, contributions begin only after an employee works more than 18 hours weekly.

Gender and Sectoral Impact

Women make up nearly 71.5% of underemployed short-hours workers, demonstrating a pronounced gender imbalance. Sector data shows:

• Retail: 29% employed in supermarkets, shops, warehouses and garages (~250,000 people)
• Education: 16%
• Accommodation & Food Services: 14%
• Health & Social Care: 12%

Impact on Public Finances and Productivity

The rise in insecure, low-paid work has increased taxpayer burden through subsidised tax credits and dragged down productivity. Bogus self-employment now accounts for nearly one-third of net job growth since 2010, with average self-employed earnings falling by 22% since 2008/09.

TUC Response

Frances O’Grady, TUC General Secretary, stated: “Zero-hours contracts are just the tip of the iceberg when it comes to low-paid, insecure work. Without more decent jobs, people will continue to survive off scraps of work and UK productivity will continue to tank.”

Support from the Workers of England Union

The Workers of England Union supports the formation of the English Trades Union Congress (ETUC), alongside the Scottish Trades Union Council (STUC) and Wales Trades Union Congress (WTUC), to strengthen collective bargaining and protect workers against insecure contracts.

Related Articles

• Zero-Hours Contracts: Just the Tip of the Iceberg
• Insecure Work & Underemployment in the UK
• The Rise of Bogus Self-Employment