Exclusivity clauses in zero hours contracts are unlawful as from today.  This change, which was a key feature of the employment law reforms contained in the Small Business, Enterprise and Employment Act 2015, comes into force 2 months after the Act was passed on 26 March this year.

Under the new law, any clause in a zero hours contract which prohibits a worker from "doing work or performing services" under another contract, or prohibits him or her from doing so "without the employer’s consent", will now be unenforceable by the employer.  As of today the implications of this change are limited as a worker cannot claim detriment from an employer trying to enforce such a clause. However, there is further scope under the Act for the Government to add this protection for zero hours workers.  For example, draft rules, which were attached to the coalition government's response to its public consultation on the exclusivity ban earlier this year, have not yet been brought into force. These included a new right not to suffer any detriment should the workers take a job under other contracts and an extension of the scope of the exclusivity ban to workers on very low weekly pay/working hours.

Until these anti-avoidance measures are in place, the ban will not create any meaningful protection for zero hours workers. Our view, however, is that it will only be a matter of time before this protection is introduced. Therefore those employers who operate zero hours contracts may wish to remove any offending clauses from their contracts in anticipation of this. In addition, employers will have to bear in mind that the availability of some workers may not be the same as before, no doubt necessitating a larger pool of workers.

One of the problems, which emerged from the consultation, is the need to improve information, advice and guidance in relation to zero hours workers.  The government in its response to the consultation, pledged to review and improve existing guidance available to employers and workers. Such guidance would help to correct the confusion which often surrounds the rights of zero hours workers, particularly in relation to working time and holiday pay.

Also in force today are the following employment-related provisions:

  • Increase in the penalty which can be imposed on an employer who pays less than the National Minimum Wage; the maximum penalty is now £20,000 per worker, rather per employer; and
  • Provision giving power for the Secretary of State to make regulations to prevent discrimination by NHS employers against job applicants on the grounds that they appear to be NHS whistleblowers.