Zero Hours Contracts: The exclusivity clause consultation

28 August 2014

The Department for Business, Innovation and Skills has launched a consultation on the Small Business, Enterprise and Employment Bill. The consultation seeks to find loopholes in clause 139 of the Zero Hours Contracts (ZHC) section of the bill: the proposed ban on exclusivity clauses. Exclusivity clauses in ZHCs aim to prevent employees from obtaining work elsewhere.

The consultation, intended to pre-empt employers getting round the ban, will end on 3 November. Business secretary Vince Cable said “We are looking closely at any potential loopholes that could arise from a ban, to ensure that these are closed off and no one can get round the new law. We are also ensuring there is access to justice for workers treated unfairly”.

However, in their new book Re-regulating Zero Hours Contracts Zoe Adams and Simon Deakin show that exclusivity clauses are a non-issue, and the focus on them is obscuring deeper issues of exploitation within ZHCs. Exclusivity clauses are only featured in a small minority of ZHCs, and are arguably unenforceable.

So while the ban appears to be a government crackdown on abuses of ZHCs, the ban will do little to improve the employment rights of those on the contracts.

The authors say, “The issue of exclusivity clauses is therefore something of a red herring. Changing the law to make such clauses unenforceable is probably unnecessary, and regulating them through a code of practice could well be counter-productive, as it might lend an air of legitimacy to certain versions of these clauses, deemed by a code to be ‘reasonable.’”

An estimated 622,000 workers are currently on one or more ZHCs according to the ONS, with 13% of employers making use of the contracts. While ZHC workers will usually have “employee” status, the precariousness of the work is likely to mean that they will not be granted many rights and protections, including against unfair dismissal, and the right to a written statement of terms and conditions.

To read more on Zero Hours Contracts, a blog by Zoe Adams and Simon Deakin can be read here.

The full publication Re-regulating Zero Hours Contracts, including analysis of the exclusivity clause ban, is available now.