On 26 May 2015 rules banning exclusivity clauses in zero-hours contracts came into force. This means that any provision in a zero-hours contract which prohibits the employee from working elsewhere will be unenforceable.
It has been a topic that has been in the headlines frequently during the course of the last year. Yet there has been up until now no actual statutory definition of what a zero hours contract even was. At least for the purpose of the ban, a zero hours contract has been defined as a contract of employment or a worker’s contract under which a worker undertakes to perform work when that work is offered by an employer, but there is no certainty of work being provided.
Taking that into account, there appears to be an easy way to avoid the ban if so desired. Simply creating a contract that provides for some work no matter how small an amount of work, would mean that the contract would no longer be a zero hours contract. There would be ‘certainty’ even though this might be that only a couple of hours’ work will be provided.
Whether there would be many employers that would consider it necessary to get around the ban in this way is doubtful as is whether the loophole will continue to exist in the long-term.
Prior to the General Election the draft Zero Hours Workers (Exclusivity Terms) Regulations 2015 outlined proposals for anti-avoidance on the basis that exclusivity clauses would be unenforceable in contracts under which a worker worked less than a set number of hours each week or earned less than a set amount each week. However, neither the number of hours nor the minimum income levels were specified.
The Department for Business, Innovation and Skills has been reported as calling the ban the ‘first step’. The suggestion that there are further steps expected might mean that the anti-avoidance provisions will be brought into force in the near future regardless of the reaction to the ban.
However, there is also the prospect of further regulations to clarify what specific claims an individual may bring where their employer ignores the ban. Strangely there appears to be no provision for that at present.
Another pre-election idea was that there should be both general and sector-specific codes of practice to help guide the fair use of zero hours contracts.
Which of these provisions will come into force next may dictate how zero hours contracts are viewed going forward.