Cable urges workers to make his zero-hours crackdown watertight

Workers on controversial zero-hours contracts will be asked to identify potential ways unscrupulous employers could exploit new rules that will ban the use of “exclusivity” clauses.

The Government is set to make illegal the clauses that give workers no guaranteed fixed hours while banning them from taking other work, but ministers are concerned some companies could find loopholes to keep workers disadvantaged.

Issues have already been raised that employers could maintain the ban on working elsewhere, while offering staff derisory one- or two-hour contracts instead.

Zero-hours contracts, used by a wide range of companies, including Sports Direct, McDonald’s, Cineworld, Burger King franchisees and Wetherspoons, give staff no set hours, leaving workers not knowing how much money they will make each week.

The launch of the consultation will also ask business leaders and workers what penalties should be issued for anyone caught breaching the rules, with proposals from civil fines to criminal sanctions.

Business Secretary Vince Cable said: “We are tightening the screws on rogue employers who try to abuse workers on zero-hour contracts. We are looking closely at any potential loopholes that could arise from a ban, to ensure that these are closed off and no one can get round the new law. We are also ensuring there is access to justice for workers treated unfairly.”

However, critics say the Government’s plans do not go far enough. Labour leader Ed Miliband has called for staff who work regularly for the same employer for over a year to be given a fixed-hours contract, get compensation for shifts cancelled at short notice and be able to request a fixed-hours contract after six months of continuous employment.

The issue has shot up the political agenda over the past year, forcing the Office for National Statistics to reassess the way it calculates the number of workers on zero-hours contracts. Most recent estimates put this at 622,000, compared with just 250,000 estimated a year ago.

Some campaigners have called for the contracts to be banned, though Mr Cable has ruled that out, claiming the contracts can be beneficial for students and workers looking for flexibility.

Ministers will also hold talks with business representatives and unions to develop sector-specific codes of practice to help guide the fair usage of the contractsthat are used in various areas, including retail, hospitality, construction and the care sector.

Billionaire Mike Ashley’s Sports Direct could be one of the first companies to fall foul of the new laws after it was recently revealed his retail empire used moonlighting clauses for its 20,000 staff on zero-hours contracts. The clauses ban staff from working for competitors and they can only get a second job if they seek permission.

An employment tribunal is due later this year with a former staff member accusing the company of abusing the contracts.

Shadow business secretary Chuka Umunna said: “We have seen a rising tide of insecurity in the workplace since David Cameron came to office, with his Government watering down the rights at work of every working person in this country. “So it is unsurprising the Government has put forward the minimum it thought it could get away with to deal with exploitative zero-hours contracts.”