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Zero hour contracts – exclusivity clauses are to be banned

Today’s announcement by Vince Cable that he is planning to introduce legislation banning exclusivity clauses in zero hour contracts is likely to be welcome by employees, who will now have the freedom to find work with more than one employer.

Exclusivity clauses prevent an employee from working for another employer, even when no work is guaranteed. This clearly benefits the employer, but restricts choice and flexibility for the individual.

The ban will benefit the 125,000 zero hours contract workers estimated to be tied to an exclusivity clause.

So what are zero-hour contracts?

Unlike standard employment contracts, where there is a mutual requirement for the employer to provide work and the employee to work a set number of hours per week, zero-hour contracts enable employers to engage and pay a worker only as an when they are required. There is no mutuality of obligation between the parties. Accordingly, an individual working under such contract would not be guaranteed work and any work offered would not necessarily be on the same days or at the same time each week. By the same token, the worker would not be obligated to accept any work offered.

Where are they used?

The flexible nature of zero-hour contracts, which enables an employer to engage and pay for someone only at the times when there is the necessary demand, means that they are most commonly found in industries where high levels of activity are followed by quieter periods. Examples are in agriculture, tourism and the construction industry where it is commonly acknowledged that there are set seasons which will be busier than others, therefore necessitating a short-term increase in the workforce. Lower-skilled industries such as catering, cleaning, security, and retail also utilise the zero hours contract.

Whilst the flexibility of zero hours can benefit both the employer and employee, the perception is that the employer has the upper hand in that they can decide how much work to provide. The relaxation of exclusivity clauses announced by Vince Cable is intended to redress the balance.

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