Zero hours contracts and exclusivity clauses

Zero hours contracts are those where the employer does not guarantee to provide the worker with any work and pays the worker only for work actually carried out. The Government estimates that some 125,000 employees are on such contracts.

Some employers argue that they are an important tool to enable a business to maintain flexibility to deal with fluctuations in demand whereas some employee groups claim that businesses use them to avoid giving workers the status of 'employee' and eligibility for the full range of employment rights.

The Business Secretary, Vince Cable, has announced that employers hiring workers on zero hours contracts will no longer be able to compel staff to work exclusively for them. These 'exclusivity clauses' will not be permitted in contracts and will therefore give workers the freedom to take employment elsewhere. The ban on exclusivity clauses will be contained in the Small Business, Enterprise and Employment Bill.

The Government considers zero hours contracts have a place in the labour market but that the use of these contracts needs tightening up to protect employees from employers who misuse the contracts.

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