Zero-hours contracts – exclusivity ban now in force

The new government has finally implemented the long-heralded ban on exclusivity clauses in zero-hours contracts. This has been a hot topic for many months, with all of the major political parties including plans to tackle the widespread use of such contracts in their election manifestos.

Section 153 of the Small Business, Enterprise and Employment Act 2015 had already been drafted by the previous coalition government and was brought into force on 26 May 2015. This provides that any provision in a zero-hours contract which prohibits a worker from working elsewhere, whether with or without the employer’s consent, is unenforceable. This applies to all contracts which depend on the employer making work available to the worker, where there is “no certainty” that any such work will actually be provided.

This is a significant step towards tackling the perceived abuse of such contracts by employers, particularly for low-paid workers. However, an obvious flaw is the ability of employers to avoid the ban by providing a limited amount of “certainty” about the work to be provided - such as by guaranteeing only a couple of hours’ work per week. There is also nothing to stop employers from penalising workers who also have jobs elsewhere – for example, by offering them less work as a result or even dismissing them.

As we have previously reported, the coalition government carried out consultation on this issue and published draft anti-avoidance regulations in March. These new provisions included an extension of the ban to low-income contracts and a new route for workers to bring tribunal claims if they suffer a detriment due to taking jobs under other contracts. However, these draft regulations have not been brought into force at the same time as the general ban on exclusivity clauses.

This means that, at present, there is nothing to stop employers from trying to avoid the new rules through tactics such as providing only a minimal amount of guaranteed work. The government has not given any indication as to when the anti-avoidance regulations may be finalised and brought into force.

The Conservatives, in their election manifesto, said they would take “further steps” to eradicate abuses such as exclusivity in zero-hours contracts, although without saying what those steps might be. So, we may or may not have more legislation on this topic in the near future. Meanwhile, it is worth noting that there is a question over whether zero-hours contracts are always such a bad thing. Our own Helen Samuel recently reported in City AM on the benefits of these types of flexible contracts for high-flying professionals. The debate will no doubt continue, but the situation is (as ever) rather more complex than our politicians tend to make out…