The Small Business, Enterprise and Employment (SBEE) Bill which is currently progressing through Parliament, contains provisions that will mean that exclusivity clauses in zero-hours contracts will be unenforceable. The Government noted that employers might try to circumvent the ban by introducing one-hour contracts that provide little security to workers but stop them working elsewhere. Following consultation it has now published its response on this key concern. The Government has stated that it is to take action to ban such terms in contracts that do not guarantee any hours via the SBEE Bill. This means people will be free to look for work elsewhere and boost their income if they so wish. It will also introduce legislation:

  • To create a new protection from detriment for zero-hours contract workers who take jobs under other contracts or arrangements with the right to seek redress from an employment tribunal. If their complaint is upheld they may receive compensation as determined by the Tribunal, and employers could be subject to civil penalties in circumstances where there are aggravating features related to the breach of the worker’s employment rights
  • To establish a minimum income level below which exclusivity clauses will be unenforceable
  • That means that those individuals who receive a basic pay rate not below £20 for each hour worked under the contract, will be exempted from the prohibition on exclusivity terms.

With regard to information, advice and guidance, the Government will continue to encourage business representatives and unions to develop sectoral codes of practice on the fair use of zero hours contracts. The Government also plans to work with interested parties to review existing guidance and improve information available to individuals and employers on using these contracts. This will be taken forward once the detail of the SBEE Bill has been finalised. In addition, the issues raised as part of this consultation will be considered in the review on employment status, which is currently underway, so that the concerns around zero hours contracts can be considered alongside all types of contract.