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Zero-Hour contracts – Exclusivity clause now officially outlawed

On Tuesday, the provision of the Small Business, Enterprise and Employment Act 2015 making the use of exclusivity clauses in zero-hour contracts unenforceable came into force.  The legislation now also provides a statutory definition of a zero-hour contract.

We have now all heard of zero-hour contracts, as they attracted a lot of negative publicity, particularly in the lead up to the recent General Election.  There is however no doubt that they provide an aspect of flexibility for both an employer and employee.  They however highlighted an inequality of bargaining, when such a contract provided that even though an employer was not able to provide any hours to an employee, the employee could not work for somebody else.  This left the employee in a particularly precarious situation, where they were effectively prevented from making a living.  The ban on the use of exclusivity clauses means that employers can no longer prohibit workers from working for another employer or prohibit workers from doing so without an employer’s consent.

The new legislation has already been criticised for lacking any real teeth in terms of enforcement provisions and for not dealing with anti-avoidance practices.  There are however early indications that the Government is planning further legislation on this topic, including the introduction of new regulations protecting zero-hour workers from being subjected to any detriment if they take on work or perform services under other contracts.

If you are an employer, it is now important to ensure that you are compliant with the new legislation, so you may consider reviewing your zero-hour contracts.  It may also be a good time to re-assess whether, in light of the changes, zero-hour contracts are the correct type of contracts for your business.  If you need any assistance, please do not hesitate to contact us.

Please feel free to contact us on 0191 282 2880 for a no obligation chat or email us if you require further advice.

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