With effect from 26th May, the use of ‘exclusivity clauses’ in zero hour contracts has become unlawful. Last year, the Government announced a review of the use of exclusivity clauses in zero hours contracts following criticism of treatment of zero hours workers.
‘Exclusivity clauses’ prevented workers from working for other businesses whilst engaged under a zero hour contract. Effectively this meant that a worker could be contracted to a company without the guarantee of any work but at the same time prevented from working for another company. They have been widely criticised in the media for exploiting zero hour workers, many of whom are low income workers, earning the minimum wage.
The ‘Small Business, Enterprise and Employment Act 2015’ now makes it unlawful for employers to include an exclusivity clause in a zero hour contract. As such, workers on zero hour contracts are now free to work for multiple employers.
Any exclusivity clauses in existing zero hour contracts will be deemed unlawful and therefore unenforceable.
An estimated 125,000 workers in the UK are predicted to benefit from this ban. Employers will now need to review their arrangements with zero hours workers as existing exclusivity clauses will no longer be enforceable, and should not be included in new zero hours contracts. Workers can be awarded compensation in the Employment Tribunal if they suffer a detriment because they have undertaken work for another employer.