United Kingdom: Draft law banning exclusivity clauses in low-income worker contracts

In brief

Draft regulations that extend the ban on exclusivity clauses in employment contracts from those on zero-hours contracts to include those earning on or less than GBP 123 per week have been laid before Parliament.


Key takeaways

  • The draft Exclusivity Terms for Zero Hours Workers (Unenforceability and Redress) Regulations 2022 will prohibit exclusivity clauses in the employment contracts of workers who earn less than the lower earnings limit for National Insurance purposes (currently GBP 123 per week).
  • Once passed, they make any contractual term unenforceable that prohibits a worker from doing work or any other services under another contract or arrangement without the consent of the first employer. If an individual to whom the Regulations apply has such a clause in their contract, they will be protected from unfair dismissal with no qualifying period of service (employees) and detriment (workers). Unfair dismissal claims will be capped at the usual basic and compensatory award limits, and compensation in detriment cases will be subject to the same cap.
  • The Regulations will come into force 28 days from when they are made, but the precise date is not yet known.

For advice or to discuss what this means for you and your business, please contact your usual Baker McKenzie contact.

Contact Information

Copyright © 2023 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.