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15th January 2016

Exclusivity in Zero Hours Contracts

Zero hours contracts have been the subject of much debate in the media recently, particularly in relation to the way in which workers do not know, from one week to the next, how many hours they will be able to work.

Another concern relates to clauses in such contracts which prevent casual workers from finding alternative work during the term of their contracts, even if they are not guaranteed to work any hours. These are known as “exclusivity clauses”.

Introduction of a ban on exclusivity clauses

In May 2015, legislation came into force which stated that any clauses in zero hours contracts that prohibited a worker from working for another employer would be unenforceable.

This was a major step in the protection of the rights of workers, and helped to bring security to workers on zero hours contract who could now undertake work for more than one employer without being in breach of contract. This applied to both workers and employees. However, it was clear that more was needed to tackle any attempts by some employers to circumvent this ban.

Following the introduction of the ban, if an employee was dismissed for working for another employer, and they did not have two years’ service, they would have no redress in the Employment Tribunal. A claim for unfair dismissal can only be brought by employee with two years’ continuous service, unless the reason for their dismissal is an automatically unfair one, where employees do not need to show that the reason for the dismissal does not apply, or the procedure was unfair.

Automatically unfair reasons for dismissal include, for example, where an employee is dismissed because of whistle-blowing, or because of reasons relating to pregnancy or maternity leave.

Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015

Finally, on 11th January 2016, some real protection came into force for workers on zero hours contracts by way of the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015.

These Regulations provide that any dismissal of an employee on a zero hours contract is automatically unfair, if the reason for the dismissal is that the employee breached an exclusivity clause which prevented them from working for another employer. There is no qualifying period for an employee to be able to bring a claim for unfair dismissal in these circumstances, so the employees do not need to have been employed for two continuous years. This claim can be pursued from the very beginning of an employee’s contract.

The Regulations also make it unlawful for a worker to be subjected to any detriment by their employer if they work for another employer in breach of an exclusivity clause preventing them from doing so. This right not to be subjected to a detriment applies to workers, and not just employees.

It is clear that this legislation is intended to provide additional protection for workers on zero hours contracts, and in the main, it seems to accomplish this aim. However, it is worth noting that the right to claim automatic unfair dismissal if an employee is dismissed because they breach an exclusivity clause is only available to “employees”, and not “workers”.

In practice, many casual workers may not be able to demonstrate that they are workers if, for example, there is no obligation on their employer to provide them with work, or if work is offered, there is no obligation on the worker to accept it. So, whilst employees on zero hours contracts are protected from being dismissed here, those who are not employees, but genuine “workers” instead, would not have the same level of protection.

Notwithstanding this, workers will still have the protection that exclusivity clauses in zero hours contracts will be unenforceable, as introduced in May 2015.

It will be interesting to see if there are any further protections introduced for workers, and it is likely that additional protections will be introduced in the future.

*All information is correct at the time of publishing. Use of this material is subject to your acceptance of our terms and conditions.

Anthony Fox

Napthens LLP – Employment Law Specialist

Anthony is one of our Employment Law Specialists from Napthens Solicitors. Read more

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