Extension of ban on exclusivity clauses to low income workers

Extension of ban on exclusivity clauses to low income workers

Extension of Ban on Exclusivity Clauses to Low Income Workers

Exclusivity clauses are generally included within contracts to prevent workers doing work under any other contract or to require a worker to request consent before undertaking such additional work.

In 2015, exclusivity clauses were banned for workers on zero-hour contracts with no guaranteed minimum working hours, to allow them to take on additional work and second jobs. The government has now decided to extend the ban on exclusivity clauses to contracts where workers receive weekly income below or equivalent to the Lower Earnings Limit (LEL), which is currently set at £123 a week. It is hoped that this reform will allow low earners a greater degree of flexibility and an opportunity to top up their income. The government also says that the reform will help employers widen their talent pool and recruit, particularly in the retail and hospitality sectors.

Once these provisions are in force, exclusivity clauses will no longer be enforceable against workers earning equal to or less than the LEL. Where an employee breaches an exclusivity clause in their contract, they will be protected from unfair dismissal and workers will be protected from suffering any form of detriment. There will be no qualifying period to claim unfair dismissal and, where a worker has suffered detriment, a Tribunal will have the power to make a declaration and award compensation it considers just and equitable up to an amount equal to the unfair dismissal basic and compensatory award.

Draft regulations making this change have now been laid before parliament. Employers should be aware of this proposed change and consider if this will impact them in practice. 

Contact our experts for further advice

Search our site