Many workers have previously been prevented from taking a second job or having an outside income by their employment contract, which usually seeks to protect an employer’s business interests.
This might include clauses that protect confidential information or knowledge of customer and supplier contracts.
Now the Government plans to remove exclusivity clauses in contracts for low-income workers following the publication of its responses to an earlier consultation.
Under the exclusivity terms for workers legislation, which will be introduced “in due course”, employers will no longer be able to enforce such clauses against low-income workers.
These clauses were previously banned from being included in zero-hours contracts in 2015, with the same aim of maximising opportunities for individuals to find additional work and apply their skills to drive economic recovery
Guaranteed weekly income
Exclusivity terms are any contractual term that stops a worker from doing work elsewhere, or which stops a worker from getting work elsewhere without the first employer’s permission.
The Government says workers on contracts with a guaranteed weekly income on or below the Lower Earnings Limit (LEL) of £123 a week will be protected from exclusivity clauses.
It says the reforms will ensure around 1.5 million low-paid workers will have more flexibility available to them, such as those working on multiple short-term contracts, students working part-time or people with caring responsibilities.
Wider talent pool
The Government says the laws will also be beneficial to businesses, by plugging crucial staffing gaps by giving employers access to recruits from a wider talent pool.
In addition, the regulations that protect workers who are dismissed or subjected to a detriment for breaching an exclusivity clause will also be reformed, so that employees are protected from unfair dismissal and workers against any detrimental action.
The unfair dismissal protection will apply immediately with no qualifying period of service, and it will be automatically unfair for employees to be dismissed for a reason relating to a breach of an exclusivity term.
Employers will need to review their contracts to consider the fact that exclusivity clauses will need to be amended, once this legislation is introduced, to ensure they only apply to those earning above the LEL.
Employers may also have to update policies and procedures and can still require staff to tell them if they are working elsewhere. Similarly, employers should work out the average weekly earnings of all employees, so they know to whom the new rules apply.
Need advice on exclusivity legislation and employment matters? Contact our team today.