Exclusivity clauses could be banned in zero hours contracts

Business secretary Vince Cable has launched a Government consultation into zero hours contracts, which could lead to a ban on the use of “exclusivity clauses” that tie workers to a single employer.

Despite some calls for zero hours contracts to be banned, the Department for Business Innovation and Skills (BIS) said it aims to tackle their misuse, following an information gathering exercise announced in June 2013.

“Our research this summer gave us a much needed insight into both the positive and negative aspects of zero hours contracts,” said Cable today. “Our consultation will now focus on tackling the key concerns that were raised, such as exclusivity clauses and how to provide workers with more protection.

“We don’t think that people should be tied exclusively to one employer if it unfairly stops them from boosting their income when they are not getting enough work to earn a living.

“Employers need flexible workforces and people should have the choice in how they work. But this shouldn’t be at the expense of fairness and transparency.”

The Government is seeking views in the consultation on: banning the use of exclusivity clauses in contracts that offer no guarantee of work; issuing guidance on the fair use of exclusivity clauses; encouraging the production of an employer-led code of practice on the fair use of exclusivity clauses; or relying on existing common law redress which enables individuals to challenge exclusivity clauses.

BIS is also looking at the transparency of zero hours contracts and is recommending options for improvement, including the possible introduction of Government-produced model clauses for employment contracts.

Frances O’Grady, TUC general secretary, said: “The growth of zero hours contracts is one of the reasons why so many hard-working people are fearful for their jobs and struggling to make ends meet, in spite of the recovery.

“But, while the Government has identified some of the problems faced by those with zero job security, it is desperately short on solutions to curb the use of these contracts.”

Tim Thomas, head of employment and skills policy at manufacturers’ organisation EEF, said: “Targeting areas such as transparency and contracts that tie workers to a single employer, where it is not justified on competition grounds, will stamp out the bad practice highlighted in recent months, and shine the spotlight back onto the many beneficial flexible working arrangements that exist between employers and their employees.”

Peter Cheese, chief executive of the Chartered Institute of Personnel and Development, said: “When used for the right reasons, with people on these arrangements being managed in the right way, zero hours contracts provide valuable flexibility that works for both parties.

“The right focus should then be on encouraging the right practices and calling out the bad, and we have published guidance designed to increase employers’ understanding of the law in this area and improve the management of these types of working arrangements to ensure workers are granted the rights to which they are entitled. It is important that as many employers as possible respond to this consultation so that we can further increase the evidence base around good practice.”

The consultation closes on 13 March 2014.