Labour & European Law Review Weekly Issue 422 03 June 2015
Following a consultation last year, the government last week outlawed the use of exclusivity clauses in zero hours contracts by employers.
Section 153 of the Small Business, Enterprise and Employment Act 2015, which came into force on 26 May, inserts sections 27A and 27B into the Employment Rights Act 1996.
Section 27A states that any provision of a zero hours contract which prohibits a worker from doing work or performing services under another contract or any other arrangement; or prohibits them from doing so without the employer’s consent, is unenforceable. Section 27B gives the government the power to introduce further regulations to deal with other contractual provisions that restrict zero hours workers from working for another employer.
Regulations which would prevent employers from circumventing the ban on exclusivity clauses have not yet been brought into force. This means unions and their members will need to keep a close eye on employers who may seek to avoid the ban by drafting contracts which require zero hours workers commit to being available or those which guarantee a very small number of hours.
‘The ban on exclusivity clauses and the failure to introduce regulations which will prevent employers from circumventing the exclusivity clauses and which would protect zero hours workers who take jobs with other contracts from being subject to a detriment will provide little comfort to the growing numbers of those on zero hours contracts’ Jo Seery of Thompsons Solicitors commented.
National Minimum Wage Penalty Increase
Alongside the provisions banning exclusivity clauses in zero hours contracts. Section 152 of the 2015 Act also amends section 19A of the National Minimum Wage Act, by increasing the penalty that can be imposed on employers who underpay their workers to £20,000 per worker.
In response to a Freedom of Information Act request, the government last week also published details of the expenditure involved in enforcing the minimum wage as well as the number of staff required to enforce it.
In terms of expenditure the budget allocated each financial year to HMRC has risen from £5.6 million in 2005/06 from to £9.2 in 2014/15. In terms of staffing levels, these have increased from 149 in 2008/09 to 181 in 2013/14. These figures compare to the £635,000 owed in arrears by some 210 companies who have failed to pay the NMW since the new scheme came into force on 1 October 2013.
To read more details of the answer to the Freedom of Information Act request, go to: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/430339/bis-foi-2015-07757-national-minimum-wage-expenditure-staffing.pdf