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Restrictions on exclusivity clauses in zero hours contracts

In its response to the Government’s consultation on zero hours employment contracts, the Institute of Directors has highlighted the important flexibility these contracts create, enabling businesses to provide services that would not otherwise be commercially viable.

Drawing on polling of its membership, the IoD backed heavy restriction of exclusivity clauses in zero hours contracts, but did not recommend an outright ban.

Zero hours contracts are used by a small minority of IoD members, and then only for a very limited number of workers. Very few IoD members incorporate an exclusivity clause into their contracts - only 16 out of over 1,000 directors in a recent survey. Reasons for using these clauses included protecting intellectual property or investment in training, suggesting that individuals involved were often relatively senior.

Outside of IoD membership, there are legitimate concerns about abuse of exclusivity clauses for low-paid workers, preventing them from supplementing their income with other work.

There may be unintended consequences of an outright ban, so the IoD suggests the Government allow the use of an exclusivity clause only where it is a proportionate means of achieving a legitimate aim. The IoD would expect this to be in a very limited number of cases.

 

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