According to the report, workers reported physical and verbal abuse and a lack of proper health and safety protection, with the treatment of pregnant workers a particular concern.
While migrant workers were most affected, British agency workers also faced similar mistreatment.
More than eight out of 10 of the 260 workers that gave evidence said that agency workers were treated worse than directly employed workers. Seven out of 10 workers said they thought they were treated badly in factories or by agencies because of their race or nationality.
A fifth of workers claim to have been pushed, kicked or having things thrown at them by line managers; over a third of workers interviewed said they had experienced, or witnessed verbal abuse, often on a daily basis. Workers also reported being refused permission to take toilet breaks, and subsequently urinating or bleeding on themselves at the production line.
A quarter of those interviewed said they had witnessed mistreatment of pregnant workers, such as the instant dismissal of agency workers who had announced they were pregnant. Pregnant women were also forced to continue to undertake work that posed risks to their health and safety, including heavy lifting and extended periods of standing.
Despite finding their experience in the workplace distressing and degrading, nearly one third of workers endured this treatment without complaint both because of fears that their work would be terminated as a result and that it would affect their goal of securing stable employment. These workers also had little knowledge of their rights or how to make complaints.
However, the inquiry also found examples of good practice with firms treating permanent and agency workers of all nationalities with respect. These firms benefited as a result, by being able to attract and retain well-motivated, loyal and increasingly skilled workers.
As a result of the inquiry, the Commission is making a number of recommendations. They include supermarkets improving their auditing of suppliers; processing firms and agencies improving recruitment practices, working environments and the ability of workers to raise issues of concern; and for the Government to provide sufficient resources for the Gangmasters' Licensing Agency to help safeguard the welfare and interests of workers.
The Commission will review action taken over the next 12 months by supermarkets, processing firms and recruitment agencies, and will consider taking enforcement action if necessary.
Based on the findings of the inquiry, the Commission will be making recommendations to the key bodies - supermarkets, agencies, processing firms, government, regulators and unions - to encourage a systemic change in behaviour.
Neil Kinghan, director general of the Equality and Human Rights Commission said: "The Commission's inquiry reveals widespread and significant ill-treatment in the industry. We have heard stories of workers subjected to bullying, violence and being humiliated and degraded by being denied toilet breaks. Some workers feel they have little choice but to put up with these conditions out of economic necessity. Others lack the language skills to understand and assert their rights.
"While most supermarkets are carrying out audits of their suppliers, our evidence shows that these audits are not safeguarding workers and they clearly need to take steps to improve them. The processing firms themselves and the agencies supplying their workers also need to pay more than lip service to ensuring that workers are not subjected to unlawful and unethical treatment.
"We recognise that some retailers and processing firms have taken steps to operate in a way which improves the treatment of workers in the sector. However, there is still a lot that they and others could do. If the situation does not improve over the next 12 months, the Commission will consider using its regulatory powers to enforce change where necessary."
The Association of Labour Providers (ALP) welcomed the Commission's report, saying: "The recommendations merit careful study by government, regulators, supermarkets, labour providers and labour users. The ALP is willing to discuss the issues with the other parties. Some of the recommendations, such as paying workers for travelling time and engaging workers on contracts of employment rather than contracts for services, are not possible unless there is a commitment from retailers and labour users to meet such costs, and past experience suggests that this is unlikely."
Anne Fairweather, head of public policy at the Recruitment and Employment Confederation (REC), added: "It is perfectly possible to use the flexible resource of agency labour without resorting to exploitative practices. Research has regularly shown that the vast majority of temporary staff working across all sectors are well looked after and value the experience and opportunity that temp work provides. The REC provides a lot of support and advice to its members to ensure that they engage workers correctly. It is also important for the hirer to work with the agency to ensure that workers are well managed. REC encourages members and hirers alike to follow all legal requirements when engaging agency workers.
"While we recognise the concerns of the EHRC, its own research has shown that with good management, and good commercial relationships, agency workers can be very well treated. REC will work with the EHRC and other stakeholders to encourage best practice and to ensure that employers only use legitimate labour providers who abide to regulations and Industry Codes of Practice. The REC also calls on the Government enforcement agencies to redouble their efforts to stamp out discriminatory and illegal working environments."
