Ed Miliband
Miliband promised a Labour government would close a legal loophole known as the Swedish derogation Getty

A Labour government would crackdown on "cowboy" employment agencies, according to Ed Miliband.

The party leader has pledged to take action against job agencies which fail to meet new criteria.

"We will not tolerate a zero-zero economy where hundreds of thousands are kept on zero-hours contracts while a tiny privileged minority pay zero tax," Miliband said.

"And nor will we tolerate a world of work that is becoming more brutal because of the way some cowboy employment agencies have been allowed to operate.

"They are undermining dignity at work, driving down standards and creating greater insecurity for families.

The Labour leader said that some rogue employment agencies were undercutting wages and have failed to pay taxes.

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Miliband promised a Labour government would close a "legal loophole" called Swedish derogation.

The Agency Workers Regulations (AWR) means workers get the same basic pay and conditions as comparable employees after a 12-week qualifying period.

The Swedish derogation provides an exemption from this as far as pay is concerned, according to the conciliation service Acas.

The Labour leader also said that he would ban employment agencies from recruiting exclusively from abroad.

The announcement comes after the Office for National Statistics (ONS) said that there were 1.4 million zero-hours contracts in the UK in late 2013.

The research body, more recently, said that there was a 36% increase in the number of temporary agency workers compared with 2009 and a 20% hike compared to last year.

"There has been a huge increase in temporary agency work in recent years. Many employment agencies play their part in supporting businesses, as well as workers, who want flexibility," Miliband added.

"But there is now overwhelming evidence that some are operating in the shadows of our economy and on the margins of law, damaging the basic fabric of British life that hard work should be properly paid.

"Even the industry itself is expressing concern that the number of rogue agencies have increased in recent years."

The plan comes ahead of the 2015 General Election next may.