Following our previous blog on the claims faced by Sports Direct from workers on zero hours contracts, the Government has announced measures planned to tackle attempts to avoid the planned exclusivity ban.
The Small Business, Enterprise and Employment Bill – which is still progressing through Parliament – contains proposed provisions which mean that employers could not require workers on zero hours contracts to work exclusively for them. The Government launched a consultation in August 2014 amid concerns that employers may seek to find ways to avoid this ban on exclusivity clauses. Of those who responded to the consultation, 46% thought this would be ‘very likely’ to happen and 37% thought it ‘likely’. The main ways it was considered this might be done were guaranteeing a small number of hours each week, such as a ‘one hour’ contract, or by restricting or refusing work to those who take up new jobs or are not always available.
The Government has now published draft regulations which aim to counter such avoidance. The proposed measures are as follows:
- Introduce the definition of a ‘prescribed contract’ as a contract which does not guarantee a specified minimum income.
- The minimum income will be defined with reference to the national minimum wage.
- There will be an exception where the hourly rate of pay is £20 or above
- Introduce provisions to protect employees from being subjected to detrimental treatment for having other jobs.
The rules will apply to any contract which does not guarantee such hours which allow an employee to earn at least the minimum prescribed rate. Exclusivity clauses in such contracts will be unenforceable. They will be able to make claims to the Employment Tribunal if they do suffer a detriment. The Tribunal will be able to award compensation or impose civil penalties on employers where there are aggravating features.
The Bill is intended to complete the legislative process by 30th March 2015 when Parliament dissolves. Although it remains to be seen when the relevant sections will come into force, and whether the draft regulations will also be implemented, it may be prudent for employers who employ workers on zero hours contracts – or similar contracts which do not guarantee specified hours – to begin to consider the possible implications.
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