The Office for National Statistics estimates that 250,000 individuals were on zero-hours contracts in 2012, a figure widely believed to be lower than the reality. In contrast, the Chartered Institute of Personnel and Development estimates the number at around one million.

It is generally accepted that their use has risen over recent years in response to economic pressures on employers, and that individuals on zero-hours contracts work across the economy with a particular focus on public services and in distribution, accommodation and food services industries (see box "Why use zero-hours contracts?").

Banning zero-hours contracts is not an option being considered by the consultation, despite calls for such a ban from some trade unions. Instead, the proposals range from "do nothing" on the one hand, to limited regulation on the other, with guidance, model clauses and the better provision of information between.

It appears that the government is open to feedback and is concerned to target any intervention carefully.

Exclusivity. The consultation asks whether the government should limit the use of exclusivity clauses in contracts. These clauses tie a worker to one employer even when there is no work available.

The consultation acknowledges that only a small number of zero-hours workers, according to recent data, are prevented from working for another employer under exclusivity clauses. It also recognises that, in some instances, exclusivity is justified (for example, where zero-hours workers are entrusted with confidential information).

However, it is concerned that some employers are using exclusivity clauses unjustifiably and the consequence for the worker, where no work is available, is particularly difficult.

The consultation proposes a range of options, including an outright ban on exclusivity, issuing government guidance on the fair use of exclusivity clauses or issuing an employer-led code of practice on the use of such clauses. Alternatively, it seeks views on doing nothing and relying on existing common law legal constraints.

Whether a ban on exclusivity is even legally practical is itself open to debate. As the consultation observes, there is no legal definition of a zero-hours contract. So any new regulation would first have to provide a definition of such a contract, bringing with it the risk of unintended and undesirable consequences; for example, putting up barriers to other forms of flexible work.

Transparency. Information gathering by the government points towards a general lack of understanding, among both workers and employers, about the nature of a zero-hours contract, including the employment status of the workers and their entitlements.

The consultation proposes several options to improve transparency, including better government information, advice, guidance and model clauses (standard template zero-hours contract clauses to be used by employers on a voluntary basis), as well as an employer-led code of practice on the fair use of zero-hours contracts.

National minimum wage. The consultation reports allegations of abuse of the National Minimum Wage Regulations 1999 (SI 1999/584) in relation to zero-hours contracts in the care sector, particularly around the non-payment of travel time. The consultation is examining ways to tackle these abuses and to strengthen enforcement of the rules. Since the consultation was published, the government has announced that employers that fail to pay workers the minimum wage will face increased fines under new regulations due to come into force in February 2014 (draft National Minimum Wage (Variation of Financial Penalty) Regulations 2014).

With an election on the horizon, it is worth noting that Ed Miliband has stated that the Labour Party, should it win the next election, would seek to act on zero-hours contracts, including banning exclusivity and the practice of requiring workers to be on-call without any guarantee of work. It has also proposed a code of practice for employers.

Given that all political parties appear committed to taking some action over zero-hours contracts, employers should expect some change; whether it is banning the unjustifiable use of exclusivity clauses or pressure to sign up to a new code of practice.

In the meantime, organisations using zero-hours contracts are advised to review the transparency of their zero-hours arrangements, including whether there is clarity around the terms and consequences of the contracts, as well as ensuring that zero-hours workers' employment status and entitlements are correctly understood by all managers involved (for further information on employment law issues around zero-hours contracts, see Briefing "Zero-hours contracts: where do employers stand?"). Where exclusivity clauses are in use, employers should review whether they are justified in the circumstances.