David Cameron has lambasted Sports Direct’s “appalling practices” following the admission by the company’s founder that workers have been paid less than the minimum wage.

His comments – which came after Mike Ashley confirmed the findings of a Guardian investigation in front of a parliamentary select committee – were made as Cameron also rejected calls to ban all zero-hours contracts, which are widely used in the retail industry and do not guarantee employees any work.

At prime minister’s questions, Cameron said: “On the issue of Sports Direct and the appalling practice of not paying the minimum wage: I absolutely abhor it and this government has done more than any previous government to crack down on the non-payment.

“We have levied almost 5,000 penalties since 2010, we continue to name and shame eligible employers when the investigation has been closed, something that didn’t happen before.”

He added: “We are going after unscrupulous employers and making sure that people get the deal that they deserve”.

The remarks came as Jeremy Corbyn said he had met workers and discussed the “shocking behaviour” at Sports Direct, including “non-payment of the minimum wage, a culture of intimidation and fear, on top of the insecurity and exploitation of zero-hours contracts”.

The Labour leader also described Ashley, who owns 55% of Sports Direct, as a boss who “would make Scrooge look like a good employer”. He also called for an outright ban on zero-hours contracts, which many of Sports Direct’s 20,000 workers are on.

Cameron insisted some workers want to have the option of a zero-hours contract and stressed he had already banned those that tie employees to one company exclusively.

He said: “We legislated in the last parliament to stop exclusive zero-hours contracts but we followed the conclusions of our consultation that said that we shouldn’t go further than that, and that for some people they want to have the choice of those contracts.”

Sports Direct is facing a multimillion-pound bill in fines and back pay after Ashley admitted to the business, innovation and skills committee on Tuesday that his business had broken the law by failing to pay staff the national minimum wage. HM Revenue & Customs, which polices minimum wage abuses, is investigating the company and is in talks with its full-time staff about a deal to top up any wage shortfall with back pay.

In December, an undercover Guardian investigation revealed that Sports Direct warehouse staff were required to go through searches at the end of each shift, during which their time was unpaid, and they also suffered deductions from their wage packets for clocking in for a shift just one minute late. The practices contributed to many staff being paid an effective rate of about £6.50 an hour against the then statutory rate of £6.70, which potentially saved the company millions of pounds a year at the expense of some of the poorest workers in the UK.

Corbyn also highlighted pro-Brexit ministers’ statements on “reducing the burden” on employers of EU protection for workers. He said Cameron should distance himself from comments by the employment minister, Priti Patel, that workers’ rights in EU law were a “burden”.

“It shows we must strengthen and not weaken workers’ rights, especially when there are criminal activities involved,” said Corbyn, citing Patel, who said last month the UK could “halve the burdens” on employers by leaving the EU.

“Does [Patel] speak on behalf of the government when she promises to reduce the burden, as she describes them, of employment legislation?” Corbyn asked, also referring to the justice secretary, Michael Gove, who said he “could not guarantee every person could keep their job” after a leave vote.

Gove appeared “equally relaxed about employment rights”, Corbyn said. “Can’t [Cameron] do something about that?”

Cameron said the EU’s underpinning of workers’ rights was one of the reasons many people would vote to stay in, but said the UK went over and above the rights demanded by the EU, on flexible working, maternity leave and shared parental leave, and more annual leave.