Exclusivity clauses in zero-hour contracts gets the thumbs down from today.

New rules came into force on 26th May 2015 making exclusivity clauses in zero-hour contracts unenforceable against a worker. Up to now, employers were allowed to prevent those who have signed up to a zero- hour contracts working for other employers.

The new law is part of the Small Business, Enterprise and Employment Act 2015 which was championed by Vince Cable, the previous business secretary. It means any provision of a zero-hours contract which “prohibits someone from doing work or performing services under another contract, or from doing so without the employer’s consent”, is unenforceable against the worker.

The new provisions only protect the worker from the contractual consequences of ignoring the exclusivity clause (such as a claim for damages for breach of contract or an injunction against the employee). It does not actually ban an employer from declining to offer further work because, for example, they are unhappy the worker is working for someone else.

A reminder of what a zero-hour contract entails.

Unlike standard employment contracts, where there is a mutual requirement for the employer to provide work and the employee to work a set number of hours per week, zero-hour contracts enable employers to engage and pay a worker only as an when they are required. There is no mutuality of obligation between the parties. Accordingly, an individual working under such contract would not be guaranteed work and any work offered would not necessarily be on the same days or at the same time each week. The Office for National Statistics (ONS) estimated that companies in the UK used 1.8 million zero-hours contracts in August 2014.

The coalition government believed that using exclusivity clauses in zero -hours contracts when work was not guaranteed was wrong as it meant that when individuals have not been offered any work under their contract, they were also prevented from looking for work elsewhere to help boost their income if they so wished. They argued such clauses, therefore, undermined the choice and flexibility for workers.

However, employers may be able to get round the new law, if employers decide to guarantee the worker a small limited number of hours of work per week, therefore satisfying a certain minimum level of weekly income. Although secondary legislation was planned to establish a minimum income level below which exclusivity clauses will be unenforceable, together with a new right to protection from employers who act detrimentally to those who take jobs under other contracts, no such legislation is yet in place. As such, there are no anti-avoidance measures for those employers who will try to circumvent the new law.

By Philip Landau