Employers are to be banned from preventing staff on zero-hours contracts seeking extra work elsewhere. The Business Secretary Vince Cable says "unscrupulous" firms have abused the flexibility offered by zero hours contracts.
"For many workers this is a perfectly sensible arrangement", he said. " But a lot of people on the contracts aren't sure what their rights are and we want to make them [zero hour contracts] more transparent so people know what their rights are."
The ban will benefit an estimated 125,000 zero-hours contract workers tied to exclusivity clauses and will allow workers to look for additional work to boost their income, according to the Business Department.
Preventing employers from insisting that their zero-hours staff are only allowed to work for them will be good news for some employees, but the government needs to go much further if the widespread abuse of these kind of contracts is to be stamped out, says the Trades Union Congress (TUC).
Commenting on the government plan to end the use of exclusivity contracts, the TUC General Secretary Frances O’Grady said: “The ban is welcome news but it’s not nearly enough to really tackle the problem. A lack of certainty is the real issue. Far too many employees have no idea from one week to the next just how many hours they’ll be working or more importantly how much money they’ll earn. This makes managing household budgets stressful and organising childcare very difficult indeed.
“The one change that would really make a difference would be for employers to have to guarantee their staff a minimum number of paid hours each week. And as the economy continues to grow that would give many zero-hours workers struggling to get by a much-needed pay rise.”
Chuka Umunna, the Shadow Business Secretary, said the contracts have become widely accepted as normal. "Zero-hours contracts, which were once a niche and marginal concept, have become the norm in parts of our economy as families have been hit by the cost-of-living crisis," he said.
The Institute of Directors said it liked the contracts because they helped ensure a "flexible work market," but added that "flexibility must work for both staff and business," and exclusivity clauses should be banned.