Use of exclusivity clauses in zero hour contracts banned
On Tuesday certain employment provisions of the Small Business, Enterprise and Employment Act 2015 came into force. Among those now in force, is the provision which makes the use of exclusivity clauses in zero hour contracts unenforceable. The legislation also now provides a statutory definition of a zero hour contract.
A zero hour contract is traditionally used for casual working, it does not guarantee the worker any work and pays a worker only for the work that they have actually carried out. Although zero hour contracts have attracted negative publicity, particularly in the lead up to the recent General Election, they do provide an aspect of flexibility for both an employer and employee. These contacts have been commonly used by employers in the care, retail and hospitality industries. Many employers expect workers to be available for work when or if they are asked to work. This new ban on the use of exclusivity clauses means that employers cannot prohibit workers from doing work or performing services under another contract or under any other arrangement, or prohibit workers from doing so without an employer’s consent.
The new legislation could be criticised for lacking any real teeth in terms of enforcement provisions and for not dealing with anti-avoidance practices. However, this will not be end the end of the matter. Notably, the legislation also creates the power for the Government to implement further provisions in relation to zero hour contracts. Following a consultation which ended in March 2015, the Government also promised to introduce new regulations to protect zero hour workers from being subjected to any detriment if they take on work or perform services under other contracts. So it is clear that this area is still under ongoing review.
As more measures are introduced it will be interesting to see how many employees take steps to enforce their new rights in the face of a breach by their employer. It is possible that, despite the publicity this issue has attracted, many will either be unaware of their rights or put off lodging a claim as a result of costly Tribunal fees.
Nonetheless, as a result of this ban of exclusivity clauses, employers should now re-evaluate whether zero hour contracts are the correct type of contracts required for their business needs or; at least consider having contracts and practices reviewed to ensure compliance with the new legislation.