The UK Government is consulting about the use of zero-hours contracts (under which employers do not guarantee employees any work, but call on employees as required, and only pay them for the hours they work).  Many UK retail businesses in particular use contracts of this type to save money.

One of the problems with zero-hours contracts is that they often contain "exclusivity" clauses, under which the employee is not allowed to take up any other work - this means that they are available whenever the employer wants them.

The Government would now like to make these clauses unenforceable, as they are generally regarded as being highly detrimental to employees (as the employees then have no way of supplementing their income).

One area of concern with the proposed ban is that it can be easily avoided by offering contracts with at least one hour of guaranteed work - so the Government now seeks views on measures to prevent employers getting around the ban in that and other ways.

Any mechanism decided on following the consultation will likely be implemented by the Government via secondary legislation. 

Some commentators think the Government has resisted calls from an earlier consultation for more stringent controls on zero-hour contracts by only legislating for a ban on exclusivity clauses. However, the fact the Government has started consultation for possible secondary legislation before the main Bill has completed its process through the Houses of Parliament, suggests there may be a lot more change to come for zero-hours contracts.

The ban on exclusivity clauses would not of itself make a great deal of difference to UK employers and overseas companies wishing to employ people in the UK, as the ban would be easy to get around, but the possible anti-avoidance regulations may have a much larger impact. 

For more information, please call Charles Pallot ( or +44 1392 33 3906)