Exclusivity ban in zero hours contracts
In June this year the government announced a ban on the use of exclusivity clauses in zero-hours contracts, which restrict workers from working for other businesses.
A new section 27A will be inserted into the Employment Rights Act 1996 (via the Small Business, Enterprise and Employment Bill 2014-15) making exclusivity clauses unenforceable where the zero hours contract prohibits the worker from working for another employer, or from doing so without the employer’s consent.
The Secretary of State will have the power to make further regulations dealing with anti-avoidance issues.
It is not yet known when the Bill will come into force but it is unlikely to be before 6 November 2014.
Consultation on anti-avoidance
The government has recognised the need to regulate against anti-avoidance; a ban might not be sufficient to prevent a minority group of rogue employers attempting to get around the ban on restricting worker activities.
The government therefore wants to close any possible loopholes to protect workers on zero hours contracts, and has therefore launched a consultation for views on how to stop employers potentially sidestepping such a ban. The aim of the consultation is to seek the views of employers, unions and individuals to help identify the potential loopholes, and to establish what redress workers should have including penalties and remedies should be introduced. Views will also be invited on whether there are any potentially negative or unintended consequences as a result of the wording of the legislation.
Proposed Codes of practice for zero hours contracts
The government has also proposed that business representatives and the unions work together to develop industry-led/owned sector-specific codes of practice. It is not clear how and when these codes would be developed. The codes are expected to cover:
- when zero hours contracts should be used and how to identify them to job applicants and workers;
- rights and responsibilities of the individual and the employer. This will include how to calculate accrued benefits such as annual leave; and
- allocating work and notice of hours of work or cancellation of work.
The closing date for responses to the consultation is 3 November 2014. The responses are expected to help shape how the Secretary of State will use its powers to make secondary legislation to manage anti-avoidance.
Replying to the consultation
You can reply to this consultation online at https://bisgovuk.citizenspace.com/lm/banning-exclusivity-clauses-avoidance. The consultation response form is available electronically on the consultation page: https://www.gov.uk/government/consultations/zero-hours-employment-contracts-exclusivity-clause-ban-avoidance (until the consultation closes). Alternatively, we would be happy to submit a response on your behalf and if so, please telephone us to discuss this further.
For more details about these changes please contact:
+44 (0) 1604 871143
This update is for general guidance only and does not constitute definitive advice.