Zero tolerance for exclusivity clauses
While initial details of the in-out EU Referendum may have stolen the thunder in the Queen’s Speech, an issue close to the hearts (or maybe pay-packets) of thousands of UK workers was resolved decisively. As of 26 May 2015 ‘exclusivity clauses’ in zero-hour contracts are prohibited.
The HR Dept explains what these are: “A zero-hours contract is where an employer offers someone the opportunity to work for them but does not guarantee that any work will be available over a period of time. Drilling down into the detail, if such a contract contains a provision whereby the person was not allowed to seek concurrent employment elsewhere, then that is an exclusivity clause.”
Zero-hour contracts were a key battleground in the general election campaign, with parties positioning themselves as champions of business, working families or a mixture of both. It is generally recognised that zero-hours contracts are a useful thing to have in the tool box. In the right circumstances they provide desired flexibility for both employers and employees. However, not many would argue that exclusivity clauses did not stack them too much in favour of the employers. This move – in the Small Business, Enterprise and Employment Act 2015 – rights this wrong. With immediate effect such clauses are unenforceable!
So what should employers do? The HR Dept continues: “The Office of National Statistics estimated that there were 1.4 million zero hour contracts in place in January 2014. It is less clear how many of these contain exclusivity clauses with different bodies estimating numbers ranging from 17,000 to 125,000.
First of all check the wording on your contracts. This rule change only concerns exclusivity clauses. So if you don’t have one you don’t need to do anything. If you do, you’ll need to remove it for existing and new staff and bear in mind that it’s already unenforceable. Also think about why it was there, and what planning you will need to do now that you can’t rely on it.”
Local businesses that need help adjusting to this rule change can get in touch with HR Dept.