Three key facts about the ban on exclusivity clauses in zero hours contracts

Zero hours contracts continue to be a newsworthy and contentious employment issue. At the end of last month, a change to the law on exclusivity clauses took effect. Clio Springer explains the implications for employers, and what still needs to be done to give the new law teeth.

1. Exclusivity clauses in zero hours contracts are unenforceable

From 26 May 2015, a clause in a zero hours contract that prohibits the worker from working under another contract, or that requires the worker to get the employer’s consent first, is unenforceable.

Banning exclusivity clauses in zero hours contracts was a coalition Government promise, and they continued to be a Conservative party manifesto commitment.

The Small Business, Enterprise and Employment Act 2015 introduced new provisions effectively banning exclusivity clauses in zero hours contracts.

2. We may see tribunal claims as a result of the ban

Until further regulations come into effect, workers have no real power to assert the ban.

However, the new Act enables further provisions to be introduced, to support the ban and prevent zero hours workers from being restricted by contractual clauses from doing other work.

Proposals for draft Regulations suggested before the general election included a right for zero hours workers not to suffer a detriment for carrying out work under another contract and to go to an employment tribunal and claim compensation if they do. A detriment might include being disciplined.

Assuming the new Government brings this right into force, employers that try to prevent a zero hours worker from working somewhere else, by taking action against him or her, may find themselves liable for compensation.

3. The ban may not apply if a certain level of income is guaranteed

During the public consultation about zero hours contracts, concerns were raised about employers attempting to avoid the ban on exclusivity clauses by setting up agreements with minimal guaranteed hours (so that they would not fall within the definition of a zero hours contract).

Under the proposed draft Regulations, the prohibition on exclusivity clauses will apply to zero hours contracts where the worker is not guaranteed a certain level of weekly income, unless the rate of pay for each hour worked under the contract is at least a certain amount.

That suggested amount is £20.