BIS intends to speak to a variety of affected groups, including industry bodies representing sectors where the contracts are in use and trade unions, though the aim of the investigation is only to gather information – at this stage.
Business secretary Vince Cable said: “In the last decade, there has been a steady rise in the number of zero hour contracts. For some these can be the right sort of employment contract, giving workers a choice of working patterns. However, for a contract that is now more widely used, we know relatively little about its effect on employers and employees.
“There has been anecdotal evidence of abuse by certain employers – including in the public sector – of some vulnerable workers at the margins of the labour market.
“While it’s important our workforce remains flexible, it is equally important that it is treated fairly. This is why I have asked my officials to undertake some work to better understand how this type of contract is working in practice today.”
Frances O’Grady, TUC general secretary, welcomed the government’s efforts but urged it to introduce regulation of the zero-hour contracts, she said: “With the tough times set to continue, now is the perfect time for the government to be reviewing – and hopefully regulating – the increasing use of these exploitative contracts.
“The government must get tough with those employers who want to get workers on the cheap and encourage them to start employing people on proper contracts with decent wages.”