Exclusivity clauses for low paid workers

Exclusivity clauses are now banned in contracts for low paid workers.

Exclusivity clauses are terms which prevent an employee from taking up work elsewhere or require an employee to ask permission before working for another business.

These clauses have been unenforceable in zero hours contracts since 2015. From December 2022, they are also banned in contracts for low paid workers. ‘Low paid’ here means workers and employees whose net average weekly wage does not exceed the lower earnings limit, which is currently £123 per week.

If an employer dismisses an employee for breaching an exclusivity clause, the dismissal will be automatically unfair. There is no requirement for 2 years’ continuous service to bring that claim. An employee can also bring a detriment claim if they are treated badly because they breached an exclusivity clause. Employment tribunals can award an amount equivalent to unfair dismissal compensation in such detriment claims.

Employers must now ensure that they do not use exclusivity clause in zero hours or low paid contracts.