• 26 MAY 15
    Understanding the new zero hours exclusivity ban

    Understanding the new zero hours exclusivity ban

    From today, exclusivity clauses in zero-hours contracts will be unenforceable, as part of the Small Business, Enterprise and Employment Act 2015. The new rules will stop employers from preventing hourly staff from working for another employer.

    WHN’s employment law specialist, Michael Shroot explains why this is an important change in the law for North West business owners.

    What are zero hour contracts?

    Zero hour contracts are those that were aimed to allow employers flexibility in recruiting staff as and when required for the needs of the business.  The employees are not contracted to set hours and are paid in respect of the hours worked.  In other countries there is some regulation in the use of the contracts but in this country there has been no legal definition of what amounts to a zero hours contract.

    Why has there been so much controversy?

    For some time Unions have condemned the zero-hours contract and called for it to be abolished, because they deem it as an exploitation of workers’ rights. However employers have maintained that the contracts are a vital tool for businesses responding to fluctuating workloads, and can give employees more control over their work-life balance.

    While zero hours contracts worked well for some businesses, they did leave some workers exposed to poor practice, such as no sick or holiday pay, and employers cancelling shifts at short notice.

    Further abuse of the system resulted in some employers taking advantage of zero hours contracts by imposing “exclusivity clauses” which kept a workforce ready for use but prevented the employees working elsewhere.  This impacted workers considerably because they were prohibited from being able to seek alternative work due to being contractually tied through clauses in their contracts.

    The new rules

    This ‘exclusivity’ was seen as unfair. The new S.27A Employment Rights Act provides that the provision of a zero-hours contract which prohibits the worker from doing work, or performing services under another contract or under any other arrangement, or prohibits him or her from doing so without the employer’s consent, is unenforceable against the worker.

    The ban will push business owners to tackle examples of poor practice but will allow the continuation of using a flexible labour market.

    If you are a business owner and concerned about your current contractual agreements, please contact Michael Shroot on 0161 761 4611 or email michael.shroot@whnsolicitors.co.uk