No loopholes please – Martin Williams of Mayo Wynne Baxter

Mayo Wynne Baxter Blog ImageNo loopholes please

This is a blog post from Martin Williams of Mayo Wynne Baxter, Founding Partner of

In June 2014 the Government, after an extensive consultation, announced its intention to ban exclusivity clauses in zero hours contracts. In response to the consultation 83% had supported a ban on exclusivity clauses. Also, 71% felt that such a ban would not discourage employers from creating jobs. Respondents to the consultation also felt that the availability of information about such contracts should also be improved, with 42% regarding existing information as “not helpful”.

The Government has now started another consultation to see how any loopholes in the proposed ban can be closed. As the ban on exclusivity clauses relates to contracts which do not guarantee hours one obvious side step an employer could take is to offer just one hour of work per week. The Government does not see this as right and seeks views on the best mechanism to tackle avoidance of the exclusivity ban. It would also like to have feed back on the possible action that an employee could take if they feel wronged.

The key points to be addressed in the consultation about managing contracts are:

What the likelihood of employers avoiding the ban on exclusivity clauses might be and how that might be achieved;
Whether the Government should do more to deal with potential avoidance, how might that be best achieved, and whether to do this alongside the ban or wait for evidence of whether such avoidance is taking place;
How potential avoidance could be dealt with;
Whether there should be consequences for an employer if they circumvent a ban on exclusivity clause and, if so, what those consequences should be ; and
Whether there are any potentially negative or unintended consequences as a result of the wording of the legislation.
The Government wants business representatives and unions to work together to develop sector-specific codes of practice to guide the fair use of zero hours contacts. Exactly how this will be handled in practical terms is no exactly clear. The Government would like these codes to address matters such as:

When zero hours contracts would be appropriate or not;
The rights and responsibilities of the individual and employer and how to calculate accrued benefits such as annual leave;
How work is allocated, what notice of hours is required and how work is cancelled
The Government will also review existing guidance with a view to improving the information available to individuals and employers on using zero hours contracts.

The Business Secretary, Vince Cable, has described these developments as “tightening the screws on rogue employers who try to abuse workers on zero hours contracts.” At the same time he says that “evidence shows that the vast majority of zero hours contracts have been used responsibly by many business for may years.” As with many new laws it is because of the abuse of the system that change is required.

ACAS (the Advisory, Conciliation and Arbitration Service) has welcomed the consultation. They regard exclusivity clauses as a trigger for undermining trust in an employment relationship and regard them as creating insecurities for employees. They are also keen to engage in the process of drafting codes of practice.

The consultation is due to close on 3 November 2014 and so we should not expect and legislation imposing a ban on exclusivity clause until after that point.

By Martin Williams

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