There is a sparsity of good news around now, least of all for low-income workers. New regulations, coming into force today (5 December 2022), whilst not heralding a new prosperous dawn for such workers, will release them from exclusivity terms which may have been limiting their income source. Admittedly, we are not in the happiest of times when the best news is not that lower-paid workers are being paid more but that they are free to work more hours!

Exclusivity terms 

These are contractual terms which prevent workers from having second jobs or require an employer's permission before taking another job. For permanent, salaried employees, exclusivity terms are a generally acceptable part of a contract to ensure the employee fulfils their contractual obligations. Contrast that with a zero hours worker, who has no guarantee of work or a low-paid worker on a permanent contract with limited hours and minimum pay. Exclusivity terms mean these workers are unable to supplement their income so as ensure their living costs are met.

Exclusivity terms and zero hours workers 

Since May 2015, exclusivity terms for zero hours workers have been unenforceable in contracts. These were introduced at the height of public worry and suspicion of zero hours contracts in the workplace. There have since then been calls for this ban to be extended out to other low-paid workers and the Government has, seven years on, responded.

Exclusivity Terms for Zero Hours Workers (Unenforceability and Redress) Regulations 2022

These Regulations complete the job started in 2015:

• Regulation 3(1) - Exclusivity terms are unenforceable in 'specified contracts'.
• Regulation 3(2) - A specified contract is a contract of employment or other worker’s contract which is not a zero hour contract and entitles a worker to be paid under that contract, net average weekly wages that do not exceed the lower earnings limit (currently £123 per week).
• Regulation 7(1) - If the reason or principal reason a worker is dismissed is because they breached an exclusivity clause, this will be automatically unfair - no two years continuous service required.
• Regulation 7(2) - A worker is protected from any detriment should they breach an exclusivity clause.
• Regulation 9 - A tribunal may award compensation or make a declaration if it finds a worker has suffered a detriment.

What does this mean?

For those of you who came to our employment law update back in October, you will have heard us discuss how employers can reach out to all staff as the cost of living crisis really bites. Acknowledging that two jobs are a reality for some staff will be a necessity. With that in mind, we would advise the following on the back of these new regulations:

• Check your contracts and ensure exclusivity terms are removed for lower-paid workers and given the energy and food costs, you might want to consider removing it for staff on hourly rates below the real Living Wage (£10.90 per hour outside London) even though that goes beyond the scope of the new ban. The changes will in practice only impact terms of employment for part-time workers working a relatively small number of hours per week or the youngest members of the workforce paid at lower rates of the national minimum wage.
• Try to avoid a workplace where staff feel the need to hide other jobs - you may want to consider how you create an environment where staff with second jobs know they can be honest about them but equally understand that whilst at your workplace you need them to fulfil their contractual obligations.
• If second jobs for staff creates an issue within the workplace - are you able to increase their hourly rate so that it brings them above the threshold? However, be mindful that if their rate improves their take-home pay only marginally they will be in a similar position and most likely continue second jobs secretly.
• Remember that the 48-hour weekly limit under the Working Time Regulations 1998 applies to all work done regardless of the employer. For staff who have not signed an opt-out letter, you will need to monitor those hours if you are aware of supplementary work.

If you would like to discuss this further and how it impacts your organisation, please do contact Matthew Wort.