Government bans exclusivity clauses on zero-hour contracts

Business secretary Vince Cable announced this morning (25 June) that employees on zero-hour contracts would now have the freedom to work for more than one employer, and that exclusivity clauses would be banned.

Though recognising the necessity of zero-hour contracts in industries with unpredictable trading levels, the government aims to tackle abuse by employers, and will also ensure no one evades the ban by offering one-hour fixed contracts for example.

“Zero-hour contracts have a place in today’s labour market. They offer valuable flexible working opportunities for students, older people and other people looking to top up their income and find work that suits their personal circumstances.

“But it has become clear that some unscrupulous employers abuse the flexibility that these contracts offer to the detriment of their workers. Today, we are legislating to clamp down on abuses to ensure people get a fair deal.

“We will also work with unions and business to develop a best practice code of conduct aimed at employers who wish to use zero-hour contracts as part of their workforce,” Cable said.

Mixed reactions​

The British Hospitality Association (BHA) said the ban would not affect its members, but the code of practice could increase red tape.

Martin Couchman OBE, BHA deputy chief executive, told BigHospitality: “The provisions on zero hours contracts included in today’s Small Business, Enterprise and Employment Bill, which relate to the banning of exclusivity clauses, will have little or no impact on our hotel, restaurant and catering business members, where we have found no evidence that these clauses are being used.

“We will be keen to ensure that the code of practice on the fair use of zero hours contracts, to be developed over the rest of the year, does not create red tape burdens which could damage the ability of employers to offer, and workers to accept flexible contracts, which are necessary for the hospitality industry.”

Flexibility​

The Association of Licensed Multiple Retailers (ALMR) appreciated the government’s ‘light touch regulation’ and the retention of flexibility for business.

“Mr Cable has listened to our concerns and heeded our call for balanced and proportionate action to tackle abuses of these arrangements. For many working in licensed retail, temporary and casual contracts offer a flexible method of working, particularly for those combining work with study,” said strategic affairs director Kate Nicholls.

“It is crucial that pubs, clubs and restaurants retain the flexibility to invest in their staff and drive growth. We are glad that the Government has decided against imposing costly bureaucracy and regulation which would have stifled our sector’s fantastic track record of job creation.”

Zero-hour contracts are used in an estimated 36 per cent of hospitality firms. The ban is set to benefit the 125,000 zero-hour contract workers believed to be tied to an exclusivity clause.

The government’s consultation into zero-hour, which launched in January 2014, received over 36,000 responses, with 83 per cent of respondents in favour of banning exclusivity clauses.