Millions of UK workers are subjected to "intolerably poor working lives" where "mistreatment is the norm", according to findings from the Commission on Vulnerable Employment.
The commission, set up by the TUC and involving employers and independent experts, as well as trade unionists, found that two million workers in Britain are "trapped in a continual round of low-paid and insecure work" and face daily exploitation from employers.
Brendan Barber, TUC general secretary and chair of the commission, said: "While this commission expected to find poor treatment, its extent has stunned us all. Worst of all, much of it took place within a legal framework that fails to prevent exploitation."
The commission's report, Hard Work, Hidden Lives, also refers to research by the Organisation for Economic Co-operation and Development that shows the UK has less employment protection than any other advanced economy apart from the US.
Kevin Beeston, Serco chairman and one of the commissioners, said: "During my time on the commission, meeting vulnerable workers and hearing the evidence first hand for myself, I have become increasingly surprised by my own and society's ignorance of these issues."
The commission found that exploitative employment practices were particularly widespread in care homes, hotels and restaurants, cleaning, hairdressing and beauty, construction and security.
The report has made a number of recommendations, including a major awareness programme about employment rights and better funding of employment rights advice.
Meanwhile, a study by academics at the universities of Bradford, Leeds and Kent has used statistics from the 2007 Labour Force Survey and the 2006 Skills Survey to show that, on average, agency workers are paid only two-thirds of permanent workers' wages, receiving around 32 per cent less salary.
Dr Chris Forde, who helped compile the research and works for Leeds University Business School, said: "Our research shows that there is clear cause for concern about the position of agency workers in the UK. They are paid significantly less than directly employed staff and have lower levels of job quality across a range of dimensions."