Spotlight on Zero-Hours Contracts and Exclusivity Clauses

26 June 2014

This week the media spotlight has been shining, once again, on zero-hours contracts and in particular the government’s announcement that exclusivity clauses are to be banned.

This week the media spotlight has been shining, once again, on zero-hours contracts and in particular the government’s announcement that exclusivity clauses are to be banned.

Zero-hours contracts have been in the public spotlight for some months now and have sparked considerable debate across the political spectrum. In 2012, it was estimated that around 250,000 individuals* were on zero-hours contracts - a figure which is widely believed to be lower than the reality. However, in contrast, the Chartered Institute of Personnel and Development estimates the number is more likely to be around one million.

It is generally accepted that the increase in use of these contracts over recent years has been as a direct response to economic pressures on employers. In the main, individuals on zero-hours contracts have tended to work across the economy with a particular focus on public services and in distribution, accommodation and food services industries.

This week’s announcement follows the findings of the 2013 Government consultation on the use of zero-hours contracts. The announcement states that the Government will ban the use of exclusivity clauses and increase the availability of information on zero-hours contracts for employees.

What this means in practice is that employees on zero-hours contracts will have the freedom to find work with more than one employer. Employers can no longer enforce any exclusivity clauses which:

  • prohibit the employee from doing work or performing services under another contract, or under any other arrangement, or
  • prohibit the employee from working elsewhere/under another contract without the employer’s consent.

The Government has also pledged to work with unions and business to develop best practice and a code of conduct aimed at employers who wish to use zero-hours contracts.

In addition to banning exclusivity clauses, the Business Secretary, Vince Cable, also announced that the Government will:

  • issue a further consultation on how to prevent ‘rogue employers’ evading the exclusivity ban by, for example, offering one-hour fixed contracts
  • work with business representatives and unions to develop a code of practice on the fair use of zero-hours contracts by the end of 2014, and
  • work with stakeholders to review existing guidance and improve information available to employees and employers on using these contracts.

The Government’s announcement was in the unusual form of a statement of the consultation’s outcome and a link to a press release. This may be partly due to the extremely high number of responses, over 36,000, of which 35,000 were as a result of a campaign run by 38 Degrees. By way of contrast, a consultation on what could be said to be a more controversial topic – the introduction of employment tribunal and EAT fees got fewer than 150 responses.

The ban is a part of the Small Business, Enterprise and Employment Bill, which was introduced to Parliament on 25 June 2014.

*source: The Office for National Statistics.


News
Categories
Archives
Filter by author
Request a callback