HR Expert: Extension of the prohibition on exclusivity clauses
A client of mine has an events business. As the amount and size of events varies each month, my client finds it easiest to use a combination of casual, zero hours employees and contracts with few guaranteed hours, for those employees who also have regular responsibilities within the business.

In order to ensure the people they have trained remain available, they are considering introducing an ‘exclusivity clause’, which prevents the staff from working elsewhere. This way, they will be free for my client when they need them. I imagine this is not right for the casual staff, but what about those who are guaranteed at least a few hours?

You are right in that exclusivity clauses cannot be used for zero hours workers. This has been law since 2015, and means that should such a clause be in a contract, it would not be enforceable, and any employees dismissed for failing to comply with the clause, or worker who suffers a detriment as a result, would be able to bring a claim against their employer. This is a ‘day one’ right, therefore employees are not required to have two years’ service at the time of dismissal, as it would be an automatically unfair dismissal.

Practically for your client this this means they are not able to ‘reserve’ zero hours staff, just in case they need them, by preventing them from taking on work elsewhere. One of the biggest benefits of a zero-hour contract is that employers are not bound to give a minimum number of hours. As this may result in none, or few, hours being given each week, this prohibition puts a little more balance into the relationship between employer and worker (or employee).

At present, this ban only applies to zero hours contracts, employed on which can be either employees or workers. However, in May 2022, the government confirmed its intention to extend this protection to include contracts which guarantee hours that earn the individual less than the lower earnings limit, which for 2022/23 is £123 (for example, an adult over 23 on the National Living Wage would fall within this if their contract guaranteed 12 hours or less work each week).

The effect of this ban on your client would be that those with regular duties, on limited guaranteed hours, will be able to pursue other work elsewhere, on top of the hours they already work for your client. It is worth your client therefore considering how much this would affect their business, should it happen, and if there is scope to guarantee more hours to these employees, so that they do not need to look elsewhere for hours.

There is no timeframe yet for when this will become law, however your clients are advised now to think how they might manage their staffing when it does.


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