My Lords, on 26 May this year, the Government commenced the provision introduced by the Small Business, Enterprise and Employment Act 2015 which renders unenforceable the use of exclusivity terms in zero-hours contracts. As a result, individuals can now ignore any exclusivity term in their zero-hours contract. Once these regulations commence, any employer who treats someone on a zero-hours contract unfairly simply for taking a job elsewhere could face an employment tribunal and the possibility of paying compensation.
The use of exclusivity clauses in zero-hours contracts is wrong. No one on this type of contract should be prevented from boosting their income if they want to. While the Government anticipate that only a minority of employers are likely to ignore the ban, I am confident that we all agree that a route of redress is a welcome measure. The regulations before the Committee create a route of redress for an individual on a zero-hours contract who suffers a detriment or is unfairly dismissed as a result of doing work under another contract or arrangement. They allow that individual to make a complaint to an employment tribunal and be awarded compensation if their complaint is upheld.
These regulations have been drafted as a result of the Government’s consultation. A clear majority of 71% of respondents to last summer’s consultation supported redress via an employment tribunal. The regulations create a deterrent for employers, making them think twice about ignoring the law. In addition, we will be laying an order that will ensure that those individuals on zero-hours contracts wishing to make a complaint will benefit from the early conciliation regime. This is in line with other employment protections.
Zero-hours contracts have a place in today’s labour market. For individuals who cannot commit to regular hours, they can provide a pathway into employment. That is why many people, young and old, choose to work in this way. These contracts provide choice and the ability to combine work and other commitments. But the use of exclusivity clauses in these contracts is wrong and that is why Government have banned them. These regulations strengthen that ban, adding another layer of protection for individuals and ensuring that employers cannot simply ignore the law. By creating a route of redress, individuals will have the right to make a complaint to an employment tribunal if they are dismissed or treated unfairly as a result of their employer attempting to demand exclusivity. I commend these regulations to the Committee.