search services
search news
award winning
CI Accountancy home image

Exclusivity clauses in zero hours contracts

Source: Department for Business, Innovation and Skills | Friday, August 29, 2014

Back in June 2014, the Government announced that it would be taking forward proposals to ban the use of exclusivity clauses in zero hours contracts (ZHCs).  It is now seeking views on how to stop employers potentially avoiding such a ban.

ZHCs do not guarantee any hours and an exclusivity clause in a ZHC is when the employer prevents the worker from working for someone else, even though he himself does not guarantee any hours of work.

A new section 27A will be inserted into the Employment Rights Act 1996, by the Small Business, Enterprise and Employment Bill 2014 (which is currently before Parliament), making exclusivity clauses in ZHCs unenforceable. This will be supplemented by a new section 27B allowing the Secretary of State to make further regulations dealing with anti-avoidance issues.

The consultation therefore seeks views on whether, how and when the power in section 27B should be used – the best mechanism for tackling avoidance of the exclusivity ban in ZHCs if felt necessary, as well as possible routes of redress for the worker.  It has been suggested that it would be relatively simple for an employer to currently avoid an exclusivity ban by, for example, offering contracts that guarantee just one hour of work. 

Specifically, the Government is asking for views on:

  • What the likelihood of employers avoiding a ban on exclusivity clauses might be and how that might be achieved.
  • Whether the Government should do more to deal with potential avoidance, how that might be best achieved, and whether to do this alongside the ban or wait for evidence of whether such avoidance is taking place.
  • How potential avoidance could be dealt with.
  • Whether there should be consequences for an employer if they circumvent a ban on exclusivity clauses and, if so, what those consequences should be.
  • Whether there are any potentially negative or unintended consequences as a result of the wording of the legislation.

As regards further guidance, rather than one overarching code of practice, the consultation envisages industry-led and industry-owned sector-specific codes of practice on the fair use of ZHCs, as the reality of the situation is likely to be different in each business sector.  While it will be up to unions and employer representatives to agree the content of such codes, the consultation suggests that the issues to cover could include:

  • When it is appropriate/not appropriate to use a ZHC.
  • Whether and how to promote clarity, e.g. job adverts and contracts stating the type of contract up front.
  • The rights and responsibilities of the worker and the employer and how to calculate accrued benefits such as annual leave where appropriate.
  • Best practice in allocating work.
  • Recommended practice around notice of hours of work or cancellation of work.

The consultation runs until 3 November 2014.

designed by r//evolution