Ban on exclusivity clauses in zero hours contracts now in force
Zero hours contracts have received a lot of media attention recently, they are still controversial and attracting headlines.
A recap: a straightforward zero hours contract is one in which an employer doesn’t have to offer a minimum amount of work and an employee doesn’t have to accept work offered.
Employers have been criticised for preventing those on zero hours contracts from working for anyone else (exclusivity clauses) or for penalising them for not being available for work.
Before the election, the government proposed reform, including a ban on exclusivity clauses. Its position was that zero hours contracts fulfilled a useful purpose in allowing companies and employees to work flexibly, but exclusivity with no guarantee of work was unfair on employees.
Anti-avoidance proposals were also put forward – to stop employers getting around any ban by (for example) engaging workers on contracts guaranteeing work even if the guarantee amounted to only an hour a week.
The latest: as from 26 May 2015, exclusivity clauses in zero hours contracts have been banned. This means that a provision with in the contract, which prohibits the worker from working elsewhere (with or without the employer’s consent) is now unenforceable. This applies to all contracts under which there is “no certainty” to the worker that work will be made available by the employer.
If you use zero hours contacts you do not need to amend the contract but you should bear in mind that you can no longer enforce this particular provision, the contract should be read as though that clause is not incorporated within it. There are always ways around this exclusivity clause. As the new legislation only relates to contracts where there is “no certainty” of work, some employers may simply include a contractual provision for a minimum number of hours and so there is no longer “no certainty” of work and will then still be able to enforce an exclusivity clause.
Currently the new legislation cannot be used to its full effect as the anti-avoidance measures have not yet been implemented, but we imagine it will not be long until this happens. Exactly what these measures will consist of is not yet clear, but could include financial penalties for employers and the right for an employee to make an Employment Tribunal claim.
Whatever happens next, it is worth remembering that workers on zero hours contracts still have protection under employment legislation:
- they are entitled to the national minimum wage
- they have a right to holiday
- they are protected against discrimination
- and depending on how the contract operates, they may be employees, with access to the widest range of employment rights
Zero hours contracts are likely to continue to be used widely, especially in sectors where work is unpredictable or fluctuating, and to be in demand from those in the workforce who want flexibility.
For more information and advice on zero hours contracts, contact the employment team on 020 7822 4000 or email email@example.com.