United Kingdom: Consultation launched on extending ban on exclusivity clauses in employment contracts

In brief

The government has launched a consultation proposing to extend the ban on exclusivity clauses in zero-hours contracts, to contracts of workers who earn less than the Lower Earnings Limit (currently GBP 120 a week). The consultation closes on 26 February 2021.


Contents

Key takeaways

The intention of the proposal is to allow low-income workers who are not able to secure the number of hours they would like from their current employer to seek additional work elsewhere. A similar consultation was undertaken in 2014 when the government decided to ban exclusivity clauses in zero-hours contracts but not in employment contracts more broadly. However, it is revisiting the proposal in light of the impact of COVID-19 which has meant that some companies are not in a position to offer all their employees as many hours as they would like, which has a greater impact on lower paid and vulnerable workers who are more likely to have lost their jobs or been furloughed. The government also believes that the change could give businesses the flexibility and confidence they need to retain and hire. 

The consultation seeks views on whether:

  • the current rights of redress available to zero-hour workers for failing to comply with an exclusivity clause, namely the right not to be unfairly dismissed or subjected to a detriment, should be extended to workers earning less than the Lower Earnings Limit; and
  • an hourly wage cap should be set at an appropriate level (GBP 20, GBP 22 or GBP 29 an hour) to ensure that businesses can protect their interests where they employ well-paid individuals who only work a few hours a week. The level of cap would be reviewed regularly to ensure the level remains relevant.

Consultation

Please click here to view the consultation document.

Contact Information
Rachel Farr
Knowledge Lawyer
London
rachel.farr@bakermckenzie.com
Mandy Li
Knowledge Lawyer
London
mandy.li@bakermckenzie.com

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