The government is currently seeking views on a very specific proposal to ban the use of exclusivity clauses in contracts where the workers' guaranteed weekly income is less than the Lower Earnings Limit, currently £120 per week.
The rationale behind the proposal is to make sure that those low-income workers can seek additional income elsewhere, where their current employer can't provide them the number of hours of work that they would like.
What is an exclusivity clause? This type of clause attempts to control a worker's outside activities during employment. The clause can prohibit the worker from working for anyone else in any capacity while they are employed by their current employer.
While the purpose behind the consultation is logical, this could have huge impacts for employers if the ban is approved. Many employers have been forced to cut or reduce hours for their workers due to the pandemic so the ban could capture those workers, who ordinarily wouldn't fall under the remit of such ban.
The consultation throws up many questions. What happens to contracts that currently contain an exclusivity clause? Does the clause become void and simply fall away? Or does the employer have to consult with all affected workers? Will there be an obligation on the employer to ensure the affected workers understand the purpose of the ban?
Can employers still ensure that these workers don't go and work for a competitor? It is very unlikely that employers will be best pleased about having to inform their workers they can work for other organisations. Those businesses where highly confidential information, technology or intellectual property is at the heart of what they do will be conscious of their workers going to work for someone else (potentially a competitor) simultaneously. Consideration would need to be given to the current confidentiality provisions in the workers contracts.
It will be interesting to see the consultation unfold and any reforms made will undoubtedly affect employers who use exclusivity clauses now and those workers who are on a low income but would appreciate the ability to take on new work to increase their earnings.
The consultation closes at 11:45pm on 26 February 2021.
The intention is to allow low-income workers who are not able to secure the number of hours they would like from their current employer to seek additional work elsewhere.