Avoiding exclusivity clauses
Labour & European Law Review Weekly Issue 411 18 March 2015
Following a consultation last year, the government has published draft regulations tackling avoidance of exclusivity clauses by employers in zero-hours contracts for low paid workers.
The “Banning Exclusivity Clauses: Tackling Avoidance” consultation asked respondents to comment on the order-making power in the zero-hours provision in the Small Business, Enterprise and Employment Bill, focusing specifically on:
- The likelihood of employers avoiding a ban on exclusivity clauses and how that might be achieved
- Whether the Government should do more to deal with potential avoidance, how that might be best achieved, and whether to do this alongside the ban or wait for evidence of whether it is happening
- Whether there should be consequences for an employer if they circumvent a ban on exclusivity clauses and, if so, what those consequences should be.
Of the 74 responses received, 83 per cent replied that it was “likely” or “very likely” that employers would seek to avoid a ban on exclusivity clauses. The majority considered employers would avoid the ban either by offering a minimal number of guaranteed hours per week, or by restricting the person’s work opportunities because they had not made themselves available in the past or had taken on another job. An overwhelming 90 per cent said that the government should do more to deal with potential avoidance by employers of a ban on these clauses. Of those who thought the government should do more now, 81 per cent said it should be through legislation.
In order to ensure that employers do not get round a ban by setting a small number of guaranteed hours, 81 per cent of respondents said the government should use its order-making power in the Bill to set an hours threshold where less than a certain number of hours were guaranteed with 41 per cent advocating an income threshold. The vast majority of respondents (87 per cent) also said there should be consequences for employers who restrict an individual’s work opportunities simply because they have taken work elsewhere.
The government has published draft regulations outlining government proposals to tackle avoidance of the exclusivity ban covering individuals who are paid an hourly basic rate of less than £20. These will be considered during the passage of the Bill, which is currently going through the House of Lords.
Jo Seery from Thompsons Solicitors commented: “The regulations are likely to have limited effect on the abuse of exclusivity clauses since they will only apply to zero-hour workers who meet a certain income threshold (still to be worked out) and will be dependent on zero-hours workers paying a fee to bring complaints of abuses to an Employment Tribunal.”
To read the government response to the consultation, click here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/410114/BIS-15-59-zero-hours-contracts-government-response-to-the-banning-exclusivity-clauses-tackling-avoidance-consultation.pdf
To read Thompsons’s response, click here: http://www.thompsonstradeunionlaw.co.uk/information-and-resources/zero-hours-contracts-consultation.htm