New rules banning exclusivity clauses in zero hours contracts came into effect today
Former business secretary Vince Cable may be at home writing his memoirs or on a beach somewhere drowning his sorrows after losing his seat in the general election. He will surely find some solace, however, in that legislation he proposed during the last government around zero hours contracts came into force today.
Employers who do not guarantee employees any hours of work but still contractually prevent them from working for another employer could now face the courts under a provision in the Small Business, Enterprise and Employment Act.
Previously, employers were not prohibited from seeking exclusivity from an individual as this was considered a contractual matter between the employer and individual. However, it is now a legal offence to deny employees the opportunity to work elsewhere if you aren't guaranteeing them regular work.
“Exclusivity clauses in zero hours contracts prevent people from boosting their income when they have no guarantee of work,” said Nick Boles, minister of state for the Department of Business, Innovation and Skills. “Banning these clauses will give working people the freedom to take other work opportunities and more control over their work hours and income. It brings financial security one step closer for lots of families.”
However, a leading employment lawyer has questioned whether the new legislation will have the desired impact. “It is difficult to know at this stage how much of a difference these new rules will make,” said Kirsty Ayre, employment partner at Irwin Mitchell. “Employers can still include clauses requiring workers on such contracts to be available for work if required, which may have a similar impact to an exclusivity clause.”
Ayre added that the new law presents some dangers to employers who are currently using zero hours contracts. “Employers may as a result of these new laws find that that they are at risk of an employee working for a competitor," she said. "If this is the case, they should take action by either putting them on a different type of contract or beefing up the confidentiality and IP provisions and restrictive covenants."
Either way, it’s clear employers will need to keep their wits about them when it comes to operating zero hours contracts.