The cost-of-living crisis means that many lower paid staff are looking to take second jobs to make ends meet. Up until recently if there was an exclusivity clause in their contract the staff member would have needed your consent to take on additional work. Due to a recent change in the law, you are no longer able to enforce exclusivity terms in contracts where the member of staff’s earnings do not exceed the lower earnings limit, (currently set at £123 a week). It is anticipated that the new Regulations will impact around 1.5 million lower income workers.
The new legislation replicates the provisions of 2015 legislation which had made exclusivity terms in zero-hour contracts unenforceable.
Effects of the change
The new Regulations mean that:
- Exclusivity clauses in pre-existing contracts for lower paid workers are void and unenforceable.
- Exclusivity clauses in new contracts will be void and unenforceable unless the worker earns above the lower earnings limit.
- If you dismiss an employee who earns less than the lower earnings limit for breaching an exclusivity clause that dismissal will be automatically unfair. The employee will be able to bring a claim for unfair dismissal against you. This will apply to all employees even those who have worked for you for less than 2 years.
- Lower income workers or employees will now have protection from any detrimental treatment they receive if they breach exclusivity terms in their contract.
You should review contracts of low-income workers and update where necessary.
The Regulations which also set out how the net weekly wage is calculated can be found here
Please contact Amanda Trewhella for further details.
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.