UNEMPLOYED people will have their benefits stopped if they refuse exploitative zero-hours contracts that may not lead to paid work, it was revealed yesterday.

Job-seekers risk losing payments for over three months if they fail to take the contracts, despite there being no guarantee of minimum working hours once they accept the position.

The Public and Commercial Services (PCS) union said the Tories were attempting “to demonise and punish unemployed people.” 

Employment minister Esther McVey outlined the change in a letter to Labour MP Sheila Gilmore in an exchange about benefits sanctions under the universal credit welfare shakeup.

Jobcentre “coaches” would be able to “mandate to zero-hours contracts” if they consider the role is suitable for a claimant, the letter said.

Ms Gilmore said she feared the coercive measures would prevent people from entering into long-term “stable and sustainable” employment. 

PCS general secretary Mark Serwotka said the moves were part of Tory attempts to erode job security.

He said: “Ministers have presided over a massive increase in these exploitative contracts at the same time as millions more people are stuck in low-paid, self-employed, temporary or part-time work.

“Instead of dreaming up new ways to force people into poverty, the government should be creating and encouraging sustainable jobs.”

Last week unions called for action against zero-hours working after a study showed about 1.4 million jobs involve contracts that do not guarantee a minimum number of hours.

TUC general secretary Frances O’Grady said that forcing people into zero-hours contracts “will mean zero job security, poor pay and no way of knowing what they’ll be earning from one day to the next.”

Ms O'Grady also pointed out that welfare penalties for not taking up zero-hours jobs are open to abuse.

She said: “We’ve already seen cases of people losing benefits because they missed a meeting to go to the funeral of a close relative. Under these proposals job-seekers are likely to be penalised for refusing a shift because they have a job interview.”