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‘Exclusivity clauses’ ban will be extended to cover more individuals

There are changes ahead for ‘low paid’ workers rights, with an exclusivity clauses ban coming into force on 5th December 2022.

Do any of the employees in your business have net average weekly wages that do not exceed the Lower Earnings Limit?

If so, it’s important to be aware that there will soon be a ban on ‘exclusivity clauses’ for those employees as new regulations are coming into force on 5th December 2022.

By widening the ban on exclusivity clauses and removing red tape, Government will give lowest paid workers the choice to work multiple jobs if they wish. 

If you are getting a sense of déjà vu, similar protections have been in place for employees on zero hours contracts for some time, irrespective of the amount they earn.

So, what do you need to know about the new regulations for ‘low paid’ employees?

Who is a 'low paid' worker?

‘Low paid’ employees are those working under contracts which entitle them to net average weekly wages that do not exceed the Lower Earnings Limit (currently £123 a week). The regulations specify how net average weekly wages are to be calculated.

What will the exclusivity clauses ban prevent?

The new regulations will prevent businesses from requiring that ‘low paid’ employees work exclusively for them.

The change in the law will mean that any provisions in a ‘low paid’ employee’s contract which prohibits them from doing work or performing services under another contract or arrangement, or which prohibits them from doing so without your consent will be unenforceable.

This will apply to current contracts for ‘low paid’ employees as well as those which are entered into after the change in the law comes into force.

The idea behind the change is to “increase workers’ ability to boost their income by ensuring they can take on additional work where desired”.

It’s important to be aware that under the new regulations, it’s automatically unfair to dismiss an employee if the reason or principal reason for the dismissal is that they breached an exclusivity term.

Employees will also be protected from being subjected to a detriment for that reason. There will be no minimum length of service needed for an employee to bring these claims.

What should I do now?

If you have ‘low paid’ employees in your business or think that you might, you should contact us to discuss your situation as you may need to update the contracts for these employees to reflect the change in the law.

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