The government has announced plans to ban exclusivity clauses in contracts that offer no guarantee of work and to improve transparency of zero hours contracts by increasing the availability of information for employees.

This announcement has been issued following the consultation on the use of zero hours contracts, to which the government received an overwhelming 36,000 responses and 83 per cent were in favour of banning exclusivity clauses.

The government has not yet indicated when the ban is likely to come into force. However, it forms part of the Small Business, Enterprise and Employment Bill, which was published on 25 June 2014. This Bill states that any provision of a zero hours contract which prohibits the worker from working under another contract, or prohibits the worker from doing so without the employer’s consent, is unenforceable against the worker. This will give the worker freedom to seek work with more than one employer.

It has also been announced that the government will:

  • carry out a further consultation on how to prevent employers from evading the ban, for example, by offering employees one hour contracts
  • develop a code of practice on the fair use of zero hours contracts, which is intended to be published by the end of the year; and
  • review existing guidance and improve the information which is available to employers and employees who use zero hour contracts.

The Small Business, Enterprise and Employment Bill contains a number of other employment related provisions, including a new system for enforcing employment tribunal awards and a framework requiring prescribed persons under the whistleblowing legislation to publish details of disclosures made to them. We will report on these changes separately.