What does the government’s ban on exclusivity clauses for low-paid workers mean for the future of employment?
The government has recently published the response to its December 2020 consultation on the use of ‘exclusivity clauses’ – pledging to ban their use for low earners.
Exclusivity clauses are a type of restrictive covenant that prevent workers from undertaking additional work with another employer. There is general agreement that, when well-drafted and enforceable, they can protect legitimate business interests. However, they can be unfair when they prevent low-income workers from attaining additional work to increase their income.
Ultimately, the strength of the UK labour market lies in flexibility and fairness in law and practice for both parties.
What do employers think of the proposals?
The CBI agrees with the proposal to ban them from employment contracts with a guaranteed weekly income below or equivalent to the Lower Earnings Limit - currently £123 a week.
In practice, the current use of exclusivity clauses is low – where restrictive clauses do exist, this is typically for practical reasons, such as to e
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