BEIS consultation on measures to extend the ban on exclusivity clauses in contracts of employment – Law Society response

The proposals

The Department for Business, Energy & Industrial Strategy (BEIS) asked for views on a specific proposal to extend the ban on exclusivity clauses beyond zero-hours contracts, to contracts where the workers’ guaranteed weekly income is less than the lower earnings limit, currently £120 a week.

The intention is to allow low-income workers who are not able to secure the number of hours they would like from their current employer to seek additional work elsewhere.

Read about the government consultation

Our view

As a broad policy measure, we support the government’s ambition, though we feel that there is a better way to help low-paid workers who are unfairly stopped from working elsewhere.

We question how much impact the government’s proposal will have, as we are not aware of the wide use of exclusivity clauses for those jobs that pay below the lower earnings limit.

This proposal is based on extending the policy introduced in 2014 that bans the use of exclusivity clauses in zero-hour contracts. We supported that policy, though also note that since its introduction we are unaware of a single claim being brought in relation to it.

There is also an unfairness built into the proposal. If enacted, a person who earns £119 a week cannot be subject to an exclusivity clause, while their colleague who earns £121 a week can be, even though the difference in income is immaterial.

This would disproportionately affect part-time workers in particular, who tend to be female and low-paid.

If the government wants to achieve its policy aim of helping those on low wages to have opportunities to progress, it needs to:

  • educate employers as to when exclusivity clauses should be used, and
  • empower workers to be able to question the necessity of any exclusivity clauses they are subject to

The government should allow workers who have irresolvable disputes over the use of exclusivity clauses to be able to access legal aid.

This is unlikely to have an impact on the legal aid budget as, in our experience, there will not be more than a handful of such disputes.

Any claims for legal aid would have to satisfy the financial need and merits test, which would ensure that only those who are low-paid and have a valid claim would be able to access funding.

Introducing such a policy would send a powerful message to exploitative or negligent employers that low-paid workers will be able to enforce their legal rights. It would also give confidence to those subject to exclusivity clauses that the terms of these are fair.

Next steps

The results of the consultation are being analysed by the government. It is possible that reforms will be included in a new Employment Rights Act.

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