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Zero-hours exclusivity ban could affect high-cost consultancy deals

Posted: 18th June 2015   In: Business Employment

The ban on exclusivity clauses in zero-hours contracts could have an unexpected impact on non-compete clauses involving high cost consultancy work.

The ban on the exclusivity clauses came into effect on 26 May under the Small Business, Enterprise and Employment Act.

It’s designed to stop employers being able to prevent employees on zero-hours contracts from working elsewhere, even if that employer has no work to offer them at the time. The measure is mainly aimed at the 125,000 employees on such contracts who the government fear are at risk of being exploited.

However, the move could also affect companies who engage highly-paid consultants on contracts with non-compete clauses, preventing them offering their services to rival clients. Such clauses may now turn out to be unenforceable, except perhaps where the consultant is operating as a business.

It means great care should be taken with such contracts to avoid the risk of inadvertently breaking the law.

The government is now planning further regulations to prevent unscrupulous employers from trying to get round the zero-hours exclusivity ban.

We shall keep clients informed of developments.

Please contact John Carter if you would like more information about the issues raised in this article or any aspect of employment law.