Clampdown on zero hours contracts: What you need to know

Employers will no longer be able to force employers on zero hours contracts to sign exclusivity clauses under plans announced this week by business secretary Vince Cable.

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

The action follows a government consultation, launched in December last year, into zero hours contracts which received over 36,000 responses. 83 per cent were in favour of banning exclusivity clauses in zero hours contacts.

Exclusivity clauses prevent an individual from working for another employer, even when no work is guaranteed, which Mr Cable says undermines choice and flexibility for the individuals concerned.

However, the good news for employers is that Mr Cable still believes that zero hours contracts “have a place in today’s labour market” because they offer valuable flexible working opportunities for students, older people and other people looking to top up their income and find work that suits their personal circumstances.

The Business Secretary has now announced the government will:

• Consult further on how to prevent rogue employers evading the exclusivity ban, for example through offering 1 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 the year (2014)
• Work with stakeholders to review existing guidance and improve information available to employees and employers on using these contracts

In summary, employers should take encouragement that the government has reaffirmed its view that zero hours contracts have place in the employment market, but take care to ensure they don’t fall foul of the law on exclusivity agreements.

If you require more information on the use of zero hours contracts, or any other employment law matter, please contact the Employment team on 01772 258321