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Zero Hour Contracts: An exclusivity clause is no longer enforceable

  12th August 2015      
 Company News, Employment

We are delighted to share this article from www.viewhr.co.uk

Following the Government’s consultation and much media attention of zero hour contracts, as of 26 May 2015 exclusivity clauses within zero hour contracts are banned and are no longer enforceable.

So what does this mean for you as an employer? If you engage workers on zero hour contracts, whereby you are not obliged to provide them with a minimum number of hours or, in effect, you can put them on standby while you have little or no work for them, you will no longer be able to prohibit those workers from taking up alternative work elsewhere (they are now free to work for multiple businesses on a zero hour contract!).

This may come as an unwelcomed surprise to some employers who have been able to maintain a trained and known workforce during down times in readiness for an upturn in work. There is now an increased risk that employer’s dependant upon certain zero hour workers could see their skilled workers working for other employers when they need them. This may lead employers to question whether taking these workers on as employees on minimum hour employment contracts (whereby exclusivity clauses are permitted) would actually be more suitable, especially for known skilled and dependable workers in order to secure their workforce. In some cases, this may be the correct approach anyhow as in reality these workers may technically be deemed to be employees. These considerations may be particularly relevant to industries such as care, building or security.

At present, the issue of using minimum hour employment contracts to enable the use of exclusivity clauses has not been addressed by the Government, there is a possibility that this potential avoidance technique could come under fire at a later date. However, for now, it is a potential option for employers.

Whilst it will not be necessary to amend existing zero hour contracts (as the an existing exclusivity clause is no longer enforceable), we would recommend that any future zero hour contracts are issued without an exclusivity clause.

Please get in touch with us if you would like to discuss the employment status of any of your workforce, the contracts under which workers are engaged or you simply need new contracts drafted for your business. You can reach us at gemma@viewHR.co.uk or on 07496 308540 (www.viewhr.co.uk).

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