Zero Hour contracts’ exclusivity clause terminated

By far the biggest news impacting the temporary workforce this week is the ban on Zero Hours contracts exclusivity. No longer can employers demand that workers are beholden to them and them alone if they’re on a Zero Hours contract.

For too long, these contracts have been stacked in favour of employers. Firms were under no obligation to guarantee contractors work, but could prevent them from accepting shifts elsewhere.

That is like having the cake and eating it. But is everyone happy about the move?

Here’s what the key stakeholders (beyond the contractors themselves) think about the exclusivity ban:

Nick Boles, Minister of Business, Innovation and Skills

You’d think that this move would be celebrated by everyone related to flexible working. Those working to such contracts, as Nick Boles reiterated, now have more options to boost or regulate their income.

Upon confirming the 83% majority who voted for the exclusivity ban, the Minister was quick to relate what it meant to working households.

In line with many of the Conservatives’ election promises, the party is offering help to those prepared to get out there and earn a crust. That the government sees the move as bringing “financial security one step closer for lots of families” is thus no surprise.

The Confederation of British Industry

The CBI, however, were less cock-a-hoop. Whilst they acknowledged that the ban would eradicate an unwanted element from the temporary workforce, they issued caution over further government intervention.

Citing the recent shift towards staffing flexibility as one reason for economic recovery, the CBI are keen to keep it that way.

They have a point. Many firms are excelling at drafting in specialists on an ad hoc basis. Whether it’s IT, accounting or marketing – all showing growth and resilience in the recruitment market – the ability to utilise staff on a ‘pay-as-you-go’ basis is reaping dividends.

Businesses are becoming more streamlined, paying for services only when needed. This is helping them become more competitive and profitable.

For the contractor concerned, they have the opportunity to earn more. The hirer acknowledges the specialist nature of their service and is prepared to pay more for it. As the contractor works on a self-employed basis, they can also take advantage of the associated tax breaks.

The Chartered Institute of Personnel and Development

Two years ago, the CIPD polled workers about their work/life balance. The Institute found that zero-hours contractors were much happier than permies. 65% of those working on an ad hoc basis were happy with their lot compared to 58% of those in permanent employment.

No doubt this additional freedom will only widen that gap. But the CIPD did hint at another development that could manifest itself further down the line.

Gerwyn Davies, the Institute’s labour market adviser, believes that more could be done to compensate zero-hour contractors who turn up for a scheduled shift, only to have it cancelled when they arrive.

As Gerwyn concluded, the success of zero hours contracts is dependent upon the employer and the contractor ‘striking the balance’. Too often, the scales have been tipped in favour of the former. The ban on exclusivity is a huge weight off the shoulders of many in the less financially secure workforce who’ll benefit as a result.

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