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13/03/2015
Government response to consultation on exclusivity ban in zero hours contracts
Subject: Employment/Contracts of employment/Zero hours contracts
Source: Source: GOV.UK

The Government has published its Response to the ‘Banning Exclusivity Clauses: Tackling Avoidance’ Consultation. As a result of the consultation, the Government has inserted a clause in the Small Business, Enterprise and Employment Bill that will ban the use of exclusivity terms in zero hours contracts. The Bill is currently passing through Parliament.

The legislation will allow the government to make regulations to deal with avoidance of the exclusivity ban, widen the scope of who should be protected by the exclusivity ban, and provide routes of redress for the individual.

The Regulations will include the right for zero hours workers to not suffer detriment on the grounds that the worker has done work or performed services under another contract or arrangement. If the worker’s complaint is upheld by an Employment Tribunal, they may receive compensation as determined by the Tribunal. Employers could also be subject to civil penalties under the Employment Tribunals Act 1996 in circumstances where the worker’s rights have been breached and there are aggravating features.

The prohibition will extend to all contracts of employment or worker’s contracts under which the individual is not guaranteed a certain level of weekly income. This level of weekly income, below which an employer could not demand exclusivity, would be set by multiplying the agreed number of hours by the adult national minimum wage (NMW) rate, currently £6.50. There will be an exception to this if the rate of pay for each hour worked under the contract is at least £20.

In addition, the Government has announced a review of employment status. The Government’s view is that knowing what rights a worker is entitled to relies on them and the employer knowing what their employment status is; at present this is complicated, with a final decision only available when a case is heard in an Employment Tribunal. The review will consider the entire employment status framework and present options to Ministers this Spring on how the landscape could be clarified, increasing transparency for employers and individuals.

 



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