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Zero Hour Contracts.

Date: 30/06/2014 | Corporate, Employment & HR

The UK Business Secretary, Vince Cable, announced last week that there was to be a ban on the use of exclusivity clauses in zero hour contracts. 

An exclusivity clause prevents an individual from working for another employer, even when no work is guaranteed to be provided to that worker.  

The ban on exclusivity clauses will mean that employees on zero hour contracts will have the freedom to find work with more than one employer.  This will allow such workers to look for additional work to supplement their income. Indeed the view of the Business Secretary is that the use of exclusivity clauses in zero hour contracts undermines choice and flexibility for the individuals concerned.

For the purposes of the ban, a zero hour contract is defined in the legislation as a contract of employment or other worker’s contract under which:

  • the undertaking to do or perform work or services is an undertaking to do so conditionally on the employer making work or services available to the worker, and there is no certainty that any such work or services will be made available to the worker.
  • At present there is estimated to be up to 125,000 zero hour contract workers in the UK who are tied to an exclusivity clause. 
  • Importantly the Business Secretary also announced plans for a further consultation on how to prevent unscrupulous employers seeking to evade the exclusivity ban, for example by offering 1 hour fixed contracts. 

There is a proposal to develop a code of practice on the fair use of zero hour contracts. This will be prepared once the government has had an opportunity to consult with business representatives and unions and it is hoped that the code of practice will be made available by the end of 2014.

If you believe the ban on exclusivity clauses will have an impact on your business and you would like to receive advice about this, please do not hesitate to contact Davidson Chalmers’ Employment Team, who will be happy to provide their advice and assistance.

Further Information.

Davidson Chalmers are specialists in employment law, providing clients with a first-rate, cost-effective and personal service. If you would like further details about these changes to UK employment law then please contact the Davidson Chalmers’ Employment Team, who will be happy to provide their advice and assistance.

The matter in this publication is based on our current understanding of the law.  The information provides only an overview of the law in force at the date hereof and has been produced for general information purposes only. Professional advice should always be sought before taking any action in reliance of the information. Accordingly, Davidson Chalmers LLP does not take any responsibility for losses incurred by any person through acting or failing to act on the basis of anything contained in this publication. 

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