New Regulations Ban Exclusivity Clauses for Low-Income Workers

New regulations extending the ban on exclusivity clauses in employment contracts to low-income workers earning no more than the lower earnings limit came into force on 5 December 2022.

Contract of employment document

New Regulations Banning Exclusivity Clauses

The new regulations replicate the rights of zero-hours workers set out in section 27A of the Employment Rights Act 1996 and the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations (SI 2015/2021) and make unenforceable exclusivity terms in an employment contract or other worker’s contract which is not a zero-hour contract and entitles the worker to be paid net average weekly wages that do not exceed the lower earnings limit (currently £123 a week).

In the same way as for zero hours contracts, exclusivity terms are defined as any contractual term which prohibits a worker from doing work or performing services under another contract or arrangement, or which prohibits a worker from doing so without their employer’s consent. The regulations specify how net average weekly wages are to be calculated.

Under the regulations, it is automatically unfair to dismiss an employee if the reason or principal reason for the dismissal is that the employee breached an exclusivity term, and there is no qualifying period of employment to bring this claim. In addition, workers are protected from detriment if they breach an exclusivity term in their contract.

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The specialist employment law team at Employment Law Services (ELS) LTD have extensive experience in advising UK Employers on their legal obligations to ensure compliance.  If you have any queries about your legal obligations you can call us on 0800 612 4772, Contact Us via our website or Book a Free Consultation online.

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