Employment Contract Exclusivity Clauses
15th December 2022
In May 2015, exclusivity clauses in employment contracts for zero hours workers, was made illegal. Unfortunately, it has been found that many low paid employees or workers who are not employed on zero hours contracts (perhaps part-time staff) could still be subjected to exclusivity provisions. From 5th December 2022, this will also become unlawful.
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, currently standing at £123.00.
Exclusivity is defined as any contractual term which prohibits a worker from doing work or providing a service under a different contract, without their employer’s consent.
The law states that it is unfair to dismiss an employee if the reason, or principal reason, for the dismissal is a breach in an exclusivity term. The normal 2-year qualifying period for unfair dismissal does not apply. Employees are also protected from any detriment (such as reduced payment rates) due to breaching the exclusivity term &, if an Employment Tribunal finds that a worker suffered a detriment, it could find a “just & equitable” compensation amount is also due on top of any unfair dismissal award.
If you currently operate a payroll that includes employees earning beneath £123.00 per week, £533.00 per month, you may need to tailor your standard contract of employment to remove any references to exclusivity. Failure to do so could lead to an expensive trip through the employment courts.
Disclaimer - All information in this post was correct at time of writing.
