Employees on zero hours contracts will have the freedom to find work with more than one employer after Business Secretary Vince Cable announced plans to ban exclusivity clauses.
Exclusivity clauses prevent an individual from working for another employer, even when no work is guaranteed. The use of exclusivity clauses in zero hours contracts undermines choice and flexibility for the individuals concerned.
The ban, set to benefit the 125,000 zero hours contract workers estimated to be tied to an exclusivity clause, is part of a bid to clamp down on abuses in the workplace by less scrupulous employers. It will allow workers to look for additional work to boost their income.
Business Secretary Vince Cable said: “Zero hours contracts have a place in today’s labour market. 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.
“But it has become clear that some unscrupulous employers abuse the flexibility that these contracts offer to the detriment of their workers. Today (25 June 2014), we are legislating to clamp down on abuses to ensure people get a fair deal.
“Last December (2013), I launched a consultation into this issue. Following overwhelming evidence we are now banning the use of exclusivity in zero hours contracts and committing to increase the availability of information for employees on these contracts. We will also work with unions and business to develop a best practice code of conduct aimed at employers who wish to use zero hours contracts as part of their workforce.”
This action follows a government consultation into zero hours contracts which received over 36,000 responses. 83% were in favour of banning exclusivity clauses in zero hours contacts.
The Business Secretary also announced that 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
Tim Thomas, Head of Employment Policy at EEF, the manufacturers’ organisation, said: “Zero hours contracts occupy an important space in the labour market where, properly used, they provide flexible employment in job roles where open-ended contracts are unsuitable.
“For manufacturers where skills are in scarce supply, zero hours contracts can help employers to tap into specialist skills when they are needed, such as drawing on the experience of older workers.
“The way forward set out in the Small Business, Enterprise and Employment Bill treads a fine line between supporting the majority of workers who want to continue to work on their zero hours contracts and limiting their use where they are neither necessary nor appropriate.”
The ban will be part of the Small Business, Enterprise and Employment Bill, which is being introduced to Parliament today (25 June 2014).
Commenting on the news that the government plans to stop the use of exclusivity contracts – which prevent workers on zero-hours contracts from working for more than one employer, TUC General Secretary Frances O’Grady said: “The ban is welcome news but it’s not nearly enough to really tackle the problem. A lack of certainty is the real issue. Far too many employees have no idea from one week to the next just how many hours they’ll be working or more importantly how much money they’ll earn. This makes managing household budgets stressful and organising childcare very difficult indeed.
“The one change that would really make a difference would be for employers to have to guarantee their staff a minimum number of paid hours each week. And as the economy continues to grow that would give many zero-hours workers struggling to get by a much-needed pay rise.”