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Exclusivity clauses chopped as stance toughens on ‘abusive’ zero-hours contracts

27 May 2015

The government has delivered one of its General Election pledges – the use of exclusivity clauses in zero-hours contracts is now banned.

The clauses which permitted employers to prohibit staff from working on other contracts whilst offering no guarantee of work had been labelled ‘abusive’ in the party’s manifesto.

The new rules, prescribed by the Small Business, Enterprise and Employment Act 2015, will come as welcome relief to the estimated 125,000 workers currently working with the constraints of exclusivity clauses.

Although the new legislation does not expressly deal with anti-avoidance of the ban or extend to protect employees on low-income contracts (so called ‘prescribed contracts’), these aspects were considered by the previous coalition government in their March 2015 consultation paper.

Further regulation is likely to follow and employers will need to be alert to the changes or face potential financial penalties against their businesses and compensation awards in favour of exploited staff.

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