New rules to stop employers from preventing staff on zero hours contracts from working for another employer at the same time came into effect today.
The new provisions, passed into law in March as part of the Small Business, Enterprise and Employment Bill driven by former Minister for Business, Innovation and Skills, Vince Cable, place a ban on the use of exclusivity clauses that stop staff working elsewhere whilst offering no guaranteed work themselves.
The new regulation is seen as a significant step in improving the treatment of low-paid workers in the UK, but it remains unclear the extent to which employers will be affected. Kirsty Ayre, an employment Partner at Irwin Mitchell, said:
“It is difficult to know at this stage how much of a difference these new rules will make. Employers can still include clauses requiring workers on such contracts to be available for work if required, which may have a similar impact to an exclusivity clause. Employers do however need to check the terms of any zero-hours contracts they are using and if they contain exclusivity clauses, they need to be removed.”
Many employers may be concerned at the appearance that they are now more vulnerable to employees working with industry competitors, increasing the risks to confidentiality and intellectual property. Ayre continues:
“Employers may as a result of these new laws find that that they are at risk of an employee working for a competitor. If this is the case, they should take action by either putting them on a different type of contract, or beefing up the confidentiality and IP provisions and restrictive covenants.”
One group who appear likely to benefit from today are recruitment agencies. The outlawing of exclusivity clauses could lead to the creation of larger pools of more flexible workers who are no longer preventing from seeking agency work. The new rules are an attempt by the government to curb the abuse of workers on such contracts whilst recognising the need for employers to have workforce flexibility. Speaking in August last year, Mr Cable, who lost his seat as the Liberal Democrat member for Twickenham in May, said:
“The evidence shows that the vast majority of zero hours contracts have been used responsibly by many businesses for many years but we know some abuse does take place.”
The nature of zero hours contracts became a prominent topic in the build up to the General Election in May and is specifically mentioned in almost all of the national parties manifestos.
James Marsh is an HR consultant and currently leads the editorial team at HRreview.
An avid HR blogger and tweeter on HR and management issues, James has worked as an HR manager, consultant, in-house recruiter and trainer and has expertise in both management strategy and HR policies and processes. He has a BA from the University of Nottingham in American Studies, a Masters in Human Resource Management from the University of Westminster and is a member of the Chartered Institute of Personnel and Development (CIPD).
James is also the regular chairperson of HRreview's series of webinars that discuss and debate the latest HR trends and issues, InsideHR.