Workers on zero-hours contracts will be given new protections to prevent them from being exploited, the Business Secretary, Vince Cable, will announce on Monday.
Under plans to be put out to public consultation later this year most companies will no longer be able to demand that employees work exclusively for them – unless they provide agreed minimum hours.
At the same time the Government will attempt to tackle abuses of zero-hours contracts where employers are able to drastically reduce the hours of employees who fall out of favour.
But Mr Cable’s aides were unable to say how the new safeguards would work in practice or what legislation would be needed to enforce them. They also ruled out a direct ban on the use of zero-hours contracts, saying they could provide useful flexibility for employers and workers alike.
The Office for National Statistics has estimated that around 250,000 workers are on such contracts – under which they have no guarantee of how much work they will be given each week. But the Chartered Institute of Personnel and Development puts the figure at closer to a million, while a recent union survey suggested the arrangements could affect as many as 5.5 million people. Mr Cable ordered an internal review by his Department for Business and Skills earlier this year, which revealed that the contracts were “much more widely used than we had previously thought”.
Mr Cable will announce the plans in his speech to the Liberal Democrat conference. He will say: “It is clear that there are abuses in the system, especially around the issue of exclusivity which some employers are demanding from workers on these contracts.
“We will proceed to issue a consultation, which will explore how to tackle any abuses in the system, particularly around exclusivity.”
The consultation is expected to conclude in the new year and aides said that it could result in legislation in next May’s Queen’s Speech.
Mr Cable will also announce that he intends to legislate to make it easier to prosecute fraudulent or reckless directors.