Zero-Hours Contracts and Exclusivity

Sep 01, 2015
There has been much in the press over the last year surrounding the use of zero-hours contracts. 

It is widely recognised that there is a need for zero-hours contracts in today’s employment market, given the need for employers to have flexibility in structuring their workforce (especially in circumstances where there is an uncertain level of work or staff are likely to be required to meet demand at short notice). Whilst this is the case, there has been much concern over the possible ‘abuse’ of these types of contract, for example, when employers seek to impose an exclusive working relationship on a worker when they are under no obligation to provide them with any work. 

What is a Zero-Hours Contract?
A zero-hours contract is a form of casual contract under which a worker undertakes to perform work for an employer but is not guaranteed any number of hours. Under a zero-hours contract an employer is under no obligation to provide any minimum number of working hours to the worker.

What is an Exclusivity Clause?
An exclusivity clause is a clause in a worker’s employment contract under which they agree not to work for any other employer or agree not to work for any other employer without their employer’s consent.. In circumstances where an employer is under no duty to give that worker any working hours these clauses have been considered unfair towards employees. 

What is the Current Position?
Following a consultation in 2013, the government has now legislated to ban the use of exclusivity clauses in zero-hours contracts. Under the first commencement order of the Small Business, Enterprise and Employment Act 2015 which came into force on 26 May 2015, any term in a worker’s contract which seeks to prohibit a worker from working for another employer with or without consent will be unenforceable. 

There remains concern that employers will seek to avoid this legislation by offering workers one hour of work and imposing exclusivity clauses or by refusing to provide work to employees who work for other employers. However, the commencement order has given the Secretary of State wide-ranging powers to introduce anti-avoidance measures in the coming months to stop employers circumventing the ban on exclusivity clauses - it is expected that penalties will be introduced for employers who take any such steps. Watch this space! 

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