Employees on zero-hour contracts would have an automatic right to a fixed-term contract after 12 months with a company under Labour Party proposals to be announced by leader Ed Miliband today.

The package of proposals, reported by the BBC, also includes giving workers the right to compensation if shifts are cancelled at short notice and the right to request a contract with a “minimum amount of work” after six months with an employer.

Staff would be free to work for other employers and would not be obliged to be available outside contracted hours. And they would be able to demand “clarity” from their employer about their employment status, terms and conditions.

According to the broadcaster, Miliband will say in a speech later today that Labour is determined to ban the “worst abuses of the system”.

“It has left too many people not knowing how they will make ends meet from one week to the next, and unable to plan for the future.”

He will say the contracts can offer “short-term flexibility for employers and employees” but that most employers don’t use them because they are “incompatible with building a loyal, skilled and productive workforce”.

The proposals are based on recommendations from Norman Pickavance, former HR director at supermarket group Morrisons, who was asked by the party to review zero-hours contracts.