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UK – Ban on exclusive zero-hours contracts announced

25 June 2014

Workers on zero-hours contracts will have the freedom to work with more than one employer following plans to ban exclusivity clauses announced by Business Secretary Vince Cable.

Exclusivity clauses prevent an individual from working for another employer, even when no work is guaranteed. It is widely believed that the use of exclusivity clauses in zero-hours contracts undermines choice and flexibility for the individuals concerned.

The ban, set to benefit the estimated 125,000 zero-hours contract workers tied to an exclusivity clause, is part of a bid to clamp down on abuses in the workplace by less scrupulous employers. It will allow workers to look for additional work to boost their income.

Mr Cable commented: “Zero-hours contracts have a place in today’s labour market. They offer valuable flexible working opportunities for students, older people, and other people looking to top up their income and find work that suits their personal circumstances.”

“But it has become clear that some unscrupulous employers abuse the flexibility that these contracts offer to the detriment of their workers. Today (25 June 2014), we are legislating to clamp down on abuses to ensure people get a fair deal.”

He continued: “Last December (2013), I launched a consultation into this issue. Following overwhelming evidence we are now banning the use of exclusivity in zero-hours contracts and committing to increase the availability of information for employees on these contracts. We will also work with unions and business to develop a best practice code of conduct aimed at employers who wish to use zero-hours contracts as part of their workforce.”

This action follows a government consultation into zero-hours contracts which received over 36,000 responses. The majority (83%) were in favour of banning exclusivity clauses in zero-hours contacts.

Mr Cable also announced that the government will:

  • consult further on how to prevent rogue employers evading the exclusivity ban, for example through offering one hour fixed contracts
  • work with business representatives and unions to develop a code of practice on the fair use of zero-hours contracts by the end of the year (2014)
  • work with stakeholders to review existing guidance and improve information available to employees and employers on using these contracts

Tim Thomas, Head of Employment Policy at manufacturers’ organisation EEF, said: “Zero-hours contracts occupy an important space in the labour market where, properly used, they provide flexible employment in job roles where open-ended contracts are unsuitable. For manufacturers, where skills are in scarce supply, zero-hours contracts can help employers to tap into specialist skills when they are needed, such as drawing on the experience of older workers.”

“The way forward set out in the Small Business, Enterprise and Employment Bill treads a fine line between supporting the majority of workers who want to continue to work on their zero-hours contracts and limiting their use where they are neither necessary nor appropriate,” Mr Thomas concluded.

The ban will be part of the Small Business, Enterprise and Employment Bill, which is being introduced to Parliament today (25 June 2014).

Following the announcement, Samantha Hurley, Head of External Relations at APSCo, commented: “APSCo fully supports the Business Secretary’s announcement that the Government will remove the use of exclusivity clauses in zero-hour contracts. We have always supported attempts to prevent exploitation of vulnerable workers and today’s announcement will curb the worst and most exploitative behaviour by less scrupulous employers.

“APSCo also welcomes the Government’s decision not to take more drastic action on this issue which would have negatively impacted some sectors, such as teaching, where workers often want the flexibility zero-hours contracts provide,” she added.

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