Workers on zero-hours contracts will be able to work for more than one employer under new rules but unions say the measures are insufficient.
Business secretary Vince Cable told the BBC that “unscrupulous” firms had abused the flexibility offered by the contracts.
But he said that the contracts shouldn’t be banned, which campaign groups have urged.
But Cable said they had a place in the labour market and created opportunities for students and older people.
“For many workers this is a perfectly sensible arrangement. But a lot of people on the contracts aren’t sure what their rights are and we want to make them [zero hour contracts] more transparent so people know what their rights are,” Cable said.
Cable also revealed the Government is opening a consultation on how to stop rogue employers evading the ban through measures such as offering one-hour fixed contracts.
The Office for National Statistics recently estimated that employers held 1.4 million contracts with workers that did not guarantee a minimum number of hours. Many retailers, including Sports Direct, have used or are still using zero hours contracts.
Zero hours contracts have caused controversy because they do not offer workers guaranteed work and it can mean that they can be called into work at any time without notice.
The new rules will give a boost to the income of 125,000 workers signed up to the contracts and tied into an exclusivity clause. Some 83% of the 36,000 responses to its consultation on zero contract hours were in favour of a total ban.
But Unite union assistant general secretary Steve Turner said: “Zero hours contracts are a zero sum game for workers struggling to get by. The only winner is the employer.”
Shadow business secretary Chuka Umunna added: “Under David Cameron’s Government we’ve seen a rising tide of insecurity.
Zero hours contracts, which were once a niche and marginal concept, have become the norm in parts of our economy as families have been hit by the cost-of-living crisis.
“The Government has watered down people’s rights at work and have failed to match Labour’s plans to outlaw zero hours contracts where they exploit people.
“Labour will ensure that people at work get a fair deal and proper protections so they are not forced to be available around the clock, are paid if shifts are cancelled at short notice and are able to demand a full contract if, in practice, they are working regular hours”.
TUC general secretary Frances O’Grady said: “The ban [on employers stopping staff seeking extra work] is welcome news but it’s not nearly enough to really tackle the problem.
“A lack of certainty is the real issue. Far too many employees have no idea from one week to the next just how many hours they’ll be working or more importantly how much money they’ll earn.
“This makes managing households budgets stressful and organising childcare very difficult indeed.
“The one change that would really make a difference would be for employers to have to guarantee their staff a minimum number of paid hours each week”.
But British Chambers of Commerce director general John Longworth said: “Zero hours contracts are vital for a successful jobs market, but they must be fair and work for all parties”.