Britain has too many poorly performing workplaces where employees are often badly treated, underpaid, overworked and ignored, a major report states today.

The Smith Institute, a left-wing think-tank founded in memory of the late Labour leader John Smith, said the "long tail of broken workplaces is holding back the recovery and costing the nation billions in lost income and welfare benefits to those in work".

The report, written by Ed Sweeney, the former Chairman of the Advisory Conciliation and Arbitration Service, is the product of a nine-month inquiry on behalf of the think-tank into the world of work, involving research, interviews, discussion events around the country and opinion polling.

It calls for a fresh approach to improving employment practices centred on the idea of "workplace citizenship" with employees having a greater say, new employment rights and support for fair pay.

Its recommendations include:

l a five-year plan to increase the national minimum wage towards 60 per cent of median earnings with tougher penalties for non-payment of the minimum wage;

l a right to request extra leave after five years of employment;

l rights to information on executive pay and low pay;

l an extension of free childcare for working parents and 'use it or lose it' parental leave;

l reform of the regulations on consulting workers to strengthen employee voice and

l mandatory living wage contracts in all public procurement.

"It's time governments woke up to the fact that far too many of Britain's workplaces are broken," declared Mr Sweeney.

"The gap between the rest and the best is widening.

"The evidence shows that across all types of jobs, large numbers of workers are feeling insecure, ignored, mismanaged and are long overdue a pay rise.

"Tackling these long-running weaknesses is a win-win-win for employers, employees and government. However, the recovery is being held back by the failure to improve our productivity, which is well behind our major competitors. To do that we are going to have to invest in our workforce, reward and treat people fairly and give employees more of say over their work," he added.

Chuka Umunna MP, Labour's Shadow Business Secretary, said: "This report is right to highlight the problems of low pay and insecurity in the UK.

"In the last four years the Tory-led Government has attacked people's rights at work and we've seen a rising tide of insecurity with more than 1.3m people working part-time because they cannot find full-time work, while zero-hours contracts are fast becoming the norm in parts of our economy."

He added the report set out important issues that any future government would have to address, which was why he had asked for further work to examine the "changed nature of work in 21st century Britain and the path to a more productive economy".

TUC General Secretary Frances O'Grady said: "Most people spend a large part of their lives at work, yet politicians have had little to say about the workplace in recent years.

"But this has to change. We will not have the growth we need without workplaces that are both productive and fair.

"With so many facing stagnant pay and too many new jobs made insecure through zero-hours contracts, agency working or low value self-employment we won't fix the economy without fixing the workplace.

"That is why this report is so welcome," she added.