Exclusivity Clauses and Zero Hours Contracts

September 2014
How do Zero Hours Contracts work?

Zero hours contracts are designed for use where the employer wishes to appoint a worker on an ‘ad hoc’ basis and provides that the employer is not required to provide the worker with a minimum amount (or indeed any) work and will only pay the worker for the work that he or she actually carries out. The worker is, however, required to be flexible and available to work as and when the employer needs him or her, often at very short notice.

Zero hour contracts are ideal for use where the employer needs flexibility in order to deal with fluctuating demand or seasonal working.

Small Business, Enterprise and Employment Bill and Exclusivity Clauses.

There has been a lot of bad press around zero hours contracts, mainly in relation to big companies using them for their core workforce and so short-circuiting employment rights legislation.

In response to this, the Government has stated its intention to take action against the exploitation of workers through the use of zero hours contracts. In the Small Business, Enterprise and Employment Bill, it imposes a specific limitation on the use of zero hours contracts: namely, a ban on exclusivity clauses. Exclusivity clauses are where employers restrict workers on zero hours contracts from being able to take work elsewhere, even though the employer does not guarantee any hours of work. The Government estimates that 125,000 workers in the UK are on zero hours contracts containing exclusivity clauses.

Essentially, this draft legislation provides that any provision in a zero hours contract that prohibits the worker from doing any work under another contract or under "any other arrangement" is unenforceable.

The Government is now consulting on exclusivity clauses in zero hours contracts, inviting views on whether or not employers are likely to seek to avoid the ban on exclusivity clauses and whether or not workers and employees need additional protection.

The Simply-docs Zero Hours Contract.

The Simply-docs zero hours contract does not contain an exclusivity clause and so changes do not need to be made in anticipation of these proposed changes but, as with all our documents, we shall keep this under review. A zero hours policy will be added to the Simply-docs suite of documents over the next two weeks.

The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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