How to simply a very complicated issue…
The first thing to note is that zero-hour contracts (and the employers that use them) are not all bad – they can work in a practical & sensible way for both employer & the worker.
It’s also fair to say that not all reports are accurate: I can’t remember the exact figure (is it millions of people?) reportedly on zero-hour contracts, but even if these people have documents that purport to form a contract of this nature, they often won’t be – the courts will & do determine the real nature of any employment relationship, so the thousands of staff working regularly at Sports Direct are probably not on zero-hours contracts, despite any claims (including those produced by the National Statistics & the media) to the contrary.
The next thing to consider is just what is a zero-hours contract. Conveniently, this has been explained in the legislation that this thread asks about: the
Small Business, Enterprise and Employment Act 2015, specifically
section 153, which adds a new section 27A to the Employment Rights Act.
Anyone that’s taken any interest in this matter will know that the parties to the coalition government are more than happy to shout about this legislation, and how they "outlawed exclusivity clauses in zero-hours contracts". What they don’t mention is
section 164 of the Act - the actual commencement date of the legislation. In the case of these exclusivity clauses, there is no commencement date, and there can’t be one until 40 days after a new parliament is convened! So they’re not illegal yet.
The legislation does seem quite unambiguous though: (once it’s in force) you cannot prevent a worker from working for someone else – and with no exceptions, that could include working for a competitor.
Law is never that easy though! The SBEE Act is the first time any parliament has actually defined a zero-hours contract; prior to this, it’s been left to the courts to do. One of the things the courts have found (in at least some cases) is that zero-hours contracts are not any form of permanent employment, but actually individual contracts, each standing alone & independent of the others. On current reading of the case law & legislation, that leaves open the possible question of when a contract ends, and a new one starts – relevant particularly for Labour’s plans for these.
It could theoretically be argued that if a worker is offered work for next Monday – Friday, by Saturday the contract is over. If a new offer of work for the following week was then made, same hours/days, would this be a new contract, or a continuation of the previous one? If the offer was made (and, importantly, accepted) during the earlier working week, the continuous employment would be more settled. But if there is a gap (no matter how brief), it’s possible that a new period of a contract is started – unless subsequent legislation addresses this, which will be very difficult to form.
So, exclusivity clauses will be unlawful in accordance with Section 27A, Employment Rights Act 1996 – when the legislation receives a commencement date. It will apply to current as well as future contracts, and will make no allowance for competitors.
There is currently nothing to prevent employers including such a clause, but they would be wise not to expect to be able to rely upon it longer-term.
Speculating on the formation of the next government, there is likely to be some advancements in this area of law… but anyone’s guess what that might be.
Karl Limpert
