Government to widen ban on exclusivity clauses for lowest paid workers

The government today (9 May) set out plans to widen the ban on exclusivity clauses, which restrict staff from working for multiple employers, to contracts where the guaranteed weekly income is on or below the Lower Earnings Limit of £123 a week.

The government said this will benefit an estimated 1.5 million lowest paid workers, offering them the flexibility to boost their income through extra work if they choose.

“We are creating a high skilled, high productivity labour market that supports workers by removing unnecessary red tape, helping the British people boost their incomes and keep more of what they earn,” Business Minister Paul Scully said.

“By extending the ban on exclusivity clauses, we are putting more control into the hands of the lowest paid, giving them the freedom to decide who they work for and how often, including the option to top up their pay packet if they wish.”

The government said the reforms will give workers more flexibility over when and where they work to best suit their personal circumstances such as childcare or study, including the option of working multiple short-hours contracts.

Businesses are also expected to benefit, it added, by widening the talent pool of job applicants to those who may have been prevented from applying for roles due to an exclusivity clause with another employer. It will help businesses to fill vacancies in key sectors like retail and hospitality, the government claimed.

The government expects the reforms to particularly benefit gig economy workers, younger people, or those from disadvantaged backgrounds facing barriers to entering the labour market.

In 2015, exclusivity clauses were banned for workers on zero hours contracts, where employers are not obliged to provide any minimum working hours and the worker is not obliged to accept any work offered. The change provided more workers with the option to take on additional work, with the number of people on zero hours contracts having a second job rising.

Legislation for these reforms will be laid before Parliament later this year. The proposals follow the conclusion of a consultation launched by government in December 2020, which sought views on extending the ban on exclusivity clauses beyond zero hours contracts.