Zero Hours Contracts: Tackling Avoidance of Exclusivity Ban

The Government has published the results of its consultation on Banning Exclusivity Clauses: Tackling Avoidance and has published draft Regulations containing anti-avoidance measures.

Views expressed during the consultation were that it would be easy for employers to avoid a ban on exclusivity clauses in zero hours contracts, either by offering a very low number of guaranteed hours (so they were no longer a zero hours contract) or by offering no work or fewer hours to those who undertook work elsewhere.

The draft Zero Hours Workers (Exclusivity Terms) Regulations 2015 allow workers who are subjected to a detriment as a result of working elsewhere to bring a tribunal claim and receive compensation. Employment tribunals will also be able to issue financial penalties of up to £5,000 against employers who breach the exclusivity ban. 

The Regulations also extend the exclusivity ban to low income contracts, meaning that exclusivity clauses will be unenforceable in contracts under which a worker works less than a set number of hours each week or earns less than a set amount each week (both thresholds have yet to be specified). The level of weekly income below which exclusivity clauses will be unenforceable will be set by multiplying the number of hours worked by the national minimum wage. 

The government still intends that business and union representatives should work together to develop sector-specific codes of practice to help guide the fair use of zero hours contracts. It has also pledged to review and improve existing guidance.

The government's response and draft Regulations can be viewed here.