Business secretary Vince Cable will not ban zero hours contracts because they offer a “welcome flexibility” to some employees.
Cable said that although there has been some evidence of abuse of these types of contacts they still have a place in the employment market.
However he has launched a 12 week consultation investigating whether or not to ban companies from using “exclusivity contracts”, which offer no guarantee of a job and also stop employees working for other companies.
Cable said: “A growing number of employers and individuals are using zero hour contracts. While for many people they offer a welcome flexibility to accommodate child care or top up monthly earnings, for others there has been evidence of abuse. We believe they have a place in today’s labour market and are not proposing to ban them outright.
“But we also want to make sure that people are getting a fair deal. Our consultation will focus on tackling the key concerns that were raised, such as exclusivity clauses and how to provide workers with more protection. Employers need flexible workforces and people should have the choice in how they work. But this shouldn’t be at the expense of fairness.”
Retailers including Sports Direct have been under fire for using zero hour contracts this year. The Mike Ashley-owned business employs 90% of its staff on zero hours contracts.