Government Bans Exclusivity Clauses in Zero Hours Contracts

May 27, 2015

Government Bans Exclusivity Clauses in Zero Hours Contracts

The first commencement order made under the Small Business, Enterprise and Employment Act 2015, which received the Royal Assent on 26 March 2015, has banned exclusivity clauses in zero hours contracts with effect from 26 May 2015.

Specifically, Section 153 of the Act inserts a new section 27A into the Employment Rights Act 1996 that renders unenforceable any provision in a zero hours contract that prohibits a worker from doing work or performing services under another contract or under any other arrangement, or any provision that prohibits the worker from doing so without the employer’s consent.

Further proposed measures (included in The Draft Zero Hours Workers (Exclusivity Terms) Regulations 2015) intended to prevent employers sidestepping the ban are expected to follow.

In addition, from 26 May 2015, the financial penalty payable for failing to pay the National Minimum Wage is set at 100 per cent of the arrears owed to each worker to whom the notice of underpayment relates, subject to a maximum of £20,000 per worker.