Penalties for zero hours contract exclusivity clauses come into force

Under a zero hours contact, the employer does not guarantee to provide a minimum number of hours' work. Some employers have used exclusivity clauses to prevent those engaged under such an agreement from working for another organisation, or to prohibit workers from doing so without the employer's consent.
Zero hour contracts are not banned but the use of exclusivity clauses is and, from today, can attract a penalty at tribunal

Workers now have the right to make an employment tribunal claim where their employer punishes them for breaching an exclusivity clause in a zero hours contract.

Under a zero hours contact, the employer does not guarantee to provide a minimum number of hours’ work.

Some employers have used exclusivity clauses to prevent those engaged under such an agreement from working for another organisation, or to prohibit workers from doing so without the employer’s consent.

Exclusivity clauses in zero hours contracts have been prohibited since May 2015, but workers have not, until now, had the power to enforce the ban.

From 11 January 2016, legislation gives workers working under a zero hours contract the right to complain to an employment tribunal where they are dismissed or suffer a detriment for working for another employer or asking their employer for permission to do so.

Although exclusivity clauses have been unenforceable since May 2015, until now employers could punish individuals engaged under a zero hours contract who work elsewhere, for example by failing to offer them further work, as there was no penalty for avoiding the ban.

Bar Huberman, employment law editor at XpertHR said: “The lack, until today, of any penalty created a gap in the law as, while workers were not required to abide by an exclusivity clause in their contract, they had no redress where the employer treated them unfavourably for working elsewhere.”

The response to the consultation on banning exclusivity clauses, published in March 2015, states: “There was broad agreement on ensuring consequences for employers who side stepped the exclusivity ban were put in place.”

Where a worker makes a successful claim, an award of compensation may follow. The new Regulations give employment tribunals discretion over the amount of compensation to award in a detriment claim, as the amount of the compensation should be such that the tribunal considers to be “just and equitable”, subject to various factors and limitations.

Government guidance on exclusivity clauses

“An employer must allow the individual to take work elsewhere in order to earn an income if they themselves do not offer sufficient hours.

“If an employer includes an exclusivity clause in a zero hours contract, the individual cannot be bound by it, the law states the individual can ignore it.

“An employer must not attempt to avoid the exclusivity ban by, for example, stipulating that the individual must seek their permission to look for or accept work elsewhere.”

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