The government has recently announced plans to widen the ban on exclusivity clauses in employment contracts to cover low-paid workers, giving them the choice to work multiple jobs if they wish.
The Ban on Exclusivity Clauses
Exclusivity clauses in employment contracts prevent workers from taking on additional work with other employers, thus requiring a worker to work exclusively for the business with which it has contracted. Since 2015, the use of exclusivity clauses has been banned for workers on zero-hours contracts, where employers are not obliged to provide any minimum working hours and the worker is not obliged to accept any work offered.
The new proposals will widen the ban on exclusivity clauses further to include contracts where the guaranteed weekly income of the worker is on or below the Lower Earnings Limit of £123 a week. The government estimates that presently 1.5 million workers in the UK will benefit from this change, allowing them to boost their income and choose to work multiple jobs. The proposals, however, should also benefit employers by widening the talent pool available to employers struggling to fill vacancies, especially in the retail and hospitality industries. Legislation for the reforms is expected to be laid before Parliament later in 2022.
What Does This Mean For Employers?
Employers should be aware of how this will impact them and put measures in place to ensure they are prepared. This might include reviewing existing contracts to identify whether exclusivity clauses are currently in place for workers on or below the lower earnings limit. For some cases, it may be required for the employee’s role and job sector to be assessed. Employers may want to introduce restrictive covenants for employees who intend to work for a competitor or if there are concerns about the sharing of confidential information or trade secrets.
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