Vince Cable scraps exclusivity clauses in zero hours contracts

Vince Cable, Business Secretary at the launch of the joint government and UK automotive industry's automotive strategyVince Cable has introduced a Bill which will ban zero hours contracts that prevent people from looking for other work. These “exclusivity” contracts are particularly unjust. It’s one thing to not offer work in a particular week. It’s quite another to prevent an employee doing another job to supplement their income.

He spoke about this and other things that he had done to encourage fairness in the workplace in this video including increasing the Minimum Wage, enforcing it and curbing high executive pay, which is also available

here on You Tube

The Huffington Post reports on his comments:

He said: “It has become clear that some unscrupulous employers abuse the flexibility that these contracts offer to the detriment of their workers. Today, we are legislating to clamp down on abuses to ensure people get a fair deal.

“Last December, I launched a consultation into this issue. Following overwhelming evidence we are now banning the use of exclusivity in zero-hours contracts and committing to increase the availability of information for employees on these contracts.
“We will also work with unions and business to develop a best practice code of conduct aimed at employers who wish to use zero-hours contracts as part of their workforce.”

The ban will benefit 125,000 zero-hours contract workers estimated to be tied to an exclusivity clause and will allow workers to look for additional work to boost their income, said the business Department.

 

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15 Comments

  • Richard Dean 25th Jun '14 - 1:24pm

    Quite right. Exclusivity is a benefit to employers, and so if agreed needs to be paid for. Getting it free is theft.

  • Stephen Hesketh 25th Jun '14 - 1:26pm

    Sound Lib Dem principles put into practice and explained clearly! Fairer Economy, Stronger Society.

  • Will those employers who insist on “exclusive” zero hour contracts be taken to court for failing to pay the minimum wage?

    By definition these contracts are for full-time employement and hence such employers need to guarantee to these employees either at least sufficient annual hours for them to be paid the minimum wage or for their annual income to be made up to the minimum wage if insufficient hours are reasonably offered.

  • Helen Tedcastle 25th Jun '14 - 1:33pm

    More good work from Vince Cable. I can see why the right-wing of the Tory Party dislike him and are always sniping – he’s a heavy-weight who stands up to them and their barmy neo-con ideology.

  • Good. More of this please.

    Exclusivity was the worst abuse within the system, now I think there needs to be a move to make sure that employers aren’t using these contracts to replace a traditionally contracted worker with cheaper, less regulated labour that sidesteps the rules.

    The idea where employees would have the right to ask for a permanent position with guaranteed hours after a certain time is worth looking at. Employers who can justify the need for a long term position that simply can’t guarantee steady weekly hours wouldn’t be harmed, and the examples I’ve seen lately where a single permanent contract gets replaced with multiple zero-hours contracts would be avoided.

  • Eddie Sammon 25th Jun '14 - 6:53pm

    Good move by Vince. I also looked to see if he is going to crack down on the loophole which would be exclusivity on one hour contracts and it looks like he is too:

    “Cable said he would consult further on how to prevent rogue employers evading the exclusivity ban, for example through offering one-hour fixed contracts.”

    http://www.theguardian.com/uk-news/2014/jun/25/vince-cable-moves-against-zero-hours-contracts

    I also think we need to help the self-esteem of employees and employers by changing the name of zero-hours contracts to self-employed workers. Many self-employed people are on “zero hours” contracts and just do the work when customers phone them up at short notice.

  • Philip Rolle 25th Jun '14 - 11:10pm

    In the event of a disagreement, it should be for a court to determine whether a term of a contract is enforceable – not the government.

  • Here we go again !

    Last year, Labour put forward a vote which all LD MPs voted against, including Dr Cable !

    Here’s the detail :

    The majority of MPs voted against a consultation and call for evidence on the use of zero hours contracts.

    That this House
    notes the marked rise in the use of zero hours contracts with recent estimates that as many as a million employees are employed on them and that they are used in over a quarter of workplaces, contributing to growing insecurity for families across the UK; and
    therefore calls on the Government to initiate a full consultation and formal call for evidence on the use of zero hours contracts and on proposals to prevent abuses by employers of such contracts, for example, by stopping employees on zero hours contracts being required to work exclusively for one employer, stopping the use of contracts that require zero hour workers to be available on the off-chance they are needed but with no guarantee of work, banning the use of zero hours contracts where employees are in practice working regular hours and putting in place a code of practice on the use of zero hours contracts.

    http://www.publicwhip.org.uk/division.php?date=2013-10-16&number=101&display=allvotes&sort=vote

  • Martin Lowe 26th Jun '14 - 8:09am

    @Eddie

    They should definitely close the loophole on exclusive one-hour contracts.

    I’d suggest that it should only be the case that you can offer exclusive contracts if offering full-time equivalent compensation – if a company wants to prevent someone from having more than one job then it has to pay the full amount of one job.

  • Eddie Sammon 26th Jun '14 - 8:19am

    Yes Martin, that sounds like it makes sense. I was thinking banning exclusivity on all part-time contracts. I’ve not thought about it a lot, I just know simplistically tackling zero hours contracts and nothing else isn’t going to crack it. If a customer phoned up a business and said “sign this exclusive contract with no guarantee for pay” they would get told to p*ss off.

  • @Martin – You’ve grasped the real problem and the resolution: It isn’t the actual hours offered or even worked but the exclusivity and ‘commitment’ being demanded, which has a price. The exclusivity also impacts normal employment contracts: if the contract demands no working for a competitor etc. for n months after leaving then n months is the amount of pay the employer has to pay out if they wish to enforce this clause. So focusing on exclusivity would most probably result in a better law than simply focusing on the hours clause.

  • There is a big difference between not allowing someone to work anywhere else at all and not allowing them to take their training etc. to a competitor.

  • @Richard – The difference is that one form of exclusivity prevents concurrent employments, the other can effectively bar someone for gaining work in the same sector ie. a potential competitor, for a period of time after leaving employment. Both forms of exclusivity can apply to both zero hours and normal employment contracts. The point at issue is what is the minimum value of an ‘exclusivity’ clause? I suggest that for the period of exclusivity a person’s income should not fall below the greater of their salary or the minimum wage.

    As you can see by focusing on exclusivity we have very simply totally side stepped the issue of zero, one, two, n hour contracts, leaving little room for loop holes based around hours.

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