As of Tuesday 26 May 2015, the government prohibited the use of exclusivity clauses in zero-hour contracts via the Small Business, Enterprise and Employment Act 2015.
Exclusivity clauses in zero hour contracts seek to prevent an individual from working for someone else even though that person isn’t guaranteed any hours of work. Further regulations are awaited dealing with the anti-avoidance practices, whilst an increase in the penalty for breach of the national minimum wage and other measures are also due to come into force under the new Act.
Banning exclusivity clauses is unlikely to be the end of the matter as the legislation also creates the power for the government to implement further provisions in relation to zero hour contracts. Following a consultation which ended in March 2015, the Government also promised to introduce new regulations to protect zero hour workers from being subjected to any detriment if they take on work or perform services under other contracts.
This new legislation will open up the prospect of having to defend new employment tribunal claims for employers.
Employers should firstly re-evaluate whether zero hour contracts are the correct type of contracts required for their business needs and if they are consider having their contracts and practices reviewed to ensure compliance with the new legislation.