This week the Exclusivity Terms for Zero Hours Workers (Unenforceability and Redress) Regulations 2022 (SI 2022/1145) were passed. They apply to England, Scotland and Wales, and will legally come into force on 5 December 2022.   The title of the Regulations is perhaps misleading as they are not really about zero hours contracts...

 

Since May 2015, exclusivity terms have been unenforceable in zero hours employment contracts. The problem which has arisen is that many low paid employees or workers are not employed on zero hours contracts (but perhaps a permanent part-time contract) and they could still be subject to exclusivity provisions.  

With the aim of ensuring that these low-income workers are also not restricted by exclusivity terms, the Regulations now extend the protection to all employees and workers working under contracts which entitle them to net average weekly wages that do not exceed the lower earnings limit.

 

The Regulations replicate the rights of zero-hours workers set out in section 27A of the Employment Rights Act 1996 and the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations (SI 2015/2021). They make unenforceable exclusivity terms in an employment contract or other worker's contract which is not a zero hours contract and entitles the worker to be paid net average weekly wages that do not exceed the lower earnings limit (currently £123 a week). In the same way as for zero hours contracts, exclusivity terms are defined as any contractual term which prohibits a worker from doing work or performing services under another contract or arrangement, or which prohibits a worker from doing so without their employer's consent. The Regulations specify how net average weekly wages are to be calculated.

 

Under the Regulations, it is automatically unfair to dismiss an employee if the reason or principal reason for the dismissal is that the employee breached an exclusivity term, and there is no qualifying period of employment to bring this claim. In addition, workers are protected from detriment if they breach an exclusivity term in their contract. Where an Employment Tribunal finds that a worker has suffered a detriment, it may make a declaration and award such compensation as it considers just and equitable up to an amount equal to the unfair dismissal basic and compensatory award.