Updated January 2016.
At the end of August 2014 the Government announced the start of a consultation period on banning exclusivity clauses in zero-hours contracts.
Such exclusivity clauses effectively ban people on zero-hours contracts from taking jobs with other Employers, even if they are offered no hours of work by their ‘first’ employer. Under existing common law a restriction of this type would only be upheld by a court if the Employer had a good reason to justify the clause (as it would be seen as an unreasonable restraint on the individual’s freedom to work).
Zero hour contracts have been in the news continuously for the past few years. In mid-December 2013 the Government announced the start of a consultation period on the use and nature of zero hour contracts, taking views from various stakeholders. As well as highlighting concerns at the use of exclusivity clauses they also had concerns about the apparent lack of transparency of the contracts from both the employer’s and employee’s / worker’s perspective.
The Government’s initial consultation received 36,000 responses. On 25th June 2014 Vince Cable, the Business Secretary, announced his intention to introduce legislation that bans ‘exclusivity’ clauses, allowing everyone working on zero hour contracts the right to work for more than one employer.
Views submitted during the latest consultation helped shape the zero hours contracts section of the Small Business, Enterprise and Employment Bill which is likely to become law in 2015 and ban exclusivity clauses for those earning under a certain amount.
On 26th May 2015 exclusivity clauses in zero hours contracts became illegal
– which means that any clause that stops a worker “doing work or performing services” under another contract (with another employer) or stops the worker from doing so “without the employer’s consent” will be unenforceable by the employer. However, the implications of this change were limited as the worker had no way of complaining if they suffer any ‘detriment’ from an employer trying to enforce this clause. However, the Government have now introduced legislation so workers can complain of any detriment, and this became law on 11th January 2016; but they have not yet indicated when low pay/low hours will be included in the exclusion.
In October 2015 the Government introduced Guidance for Employers on using zero-hours contracts which you can see here.
We are experienced in producing compliant and appropriate zero-hours contracts so if you need advice on how to use these contracts legally, need your existing contracts reviewed, or want a legally compliant zero-hours contract drafted for your business, then please contact me.