Exclusivity Terms for Zero Hours Workers (Unenforceability and Redress) Regulations 2022

Lord Jones Excerpts

Tuesday 25th October 2022 Grand Committee

[Baroness Janke (LD)]

I thank the noble Baroness for her presentation. As she said, exclusivity terms were banned for zero-hours contracts in 2015 through the Small Business, Enterprise and Employment Act. It enabled workers unable to work enough hours for one employer to work for another. It seems outrageous that employers were able to impose exclusivity terms on an employee who was not receiving enough pay to live on and to dismiss them for doing so. However, this protection was not extended at the time to contracts with employees on very low pay. This statutory instrument extends the protection to employees earning as little as £123 a week, meaning that if they are not given sufficient hours by one employer, they are able to seek additional work elsewhere, and if they are in any way discriminated against or any kind of action is taken against them, as the noble Baroness explained, they have legal redress.

In supporting this long-overdue change, we should remember the nearly 2 million people who are on in-work benefit because they are not paid enough to live on, many of whom are on zero-hours contracts. While the flexibility of zero-hours contracts is welcome to some who are not dependent on them for main income, such as students, many on zero-hours contracts are dependent on unreliable and often short-term work without the employment rights of permanent contracts such as sick pay, holiday entitlement, pension contributions or security of employment. Employers using these contracts can dismiss workers for sickness or even pregnancy.

Although we welcome this change, which will be of great importance to the very lowest-paid workers, we should appreciate that the low pay, poor conditions and lack of employment rights of zero-hours workers are not acceptable, and that for the 2 million low-paid workers on benefits, low pay and unreliable employment lead to deep insecurity and anxiety for the poorest families. The current economic crisis hits these people hardest, and I hope the Government will take the needs of this group of people, many of whom have families and children, very seriously indeed.

[Lord Jones (Lab)]

My Lords, I thank the Minister for her pithy and informative introduction. I wish to look briefly at Part 4 of the regulations, which is very important. Could the Minister enlarge on Regulation 7(3), which states:

“The reason is that the worker breached an exclusivity term of their specified contract”?


Then there is Regulation 8, “Complaints to employment tribunals”. Regarding such complaints, will the Minister indicate the approximate annual number of tribunals dealt with? Is there a specific statistic that tells us the percentage of claims that succeed and fail? Are those statistics available for us in this debate? I think they should be.

Lastly, does the Minister have any insight into the promptness of payment of awarded compensation? How speedily is financial justice enacted? Again, I thank her for her introduction.

[Baroness Blake of Leeds (Lab)]

I add my thanks to the Minister for a very full explanation of the material in front of us. It is important for all of us to focus on the context in which this discussion takes place and recognise the terrible state that too many families are having to live in, with insecurity and low wages against a backdrop of soaring prices. We have heard how this SI brings the situation in line with the work that has been done on zero-hours contracts in the past. I acknowledge the comments that the noble Baroness, Lady Janke, made about how difficult it is to imagine that we are in this position today.

We welcome any step, however modest, to tackle the problems we are facing in the country’s labour market—as we have heard, the measure before us is modest. In welcoming what we have in front of us, we have to acknowledge that it is a sad indictment of our current labour market that the principle of someone being able to take another job alongside a low-paid job is being championed as a major step forward towards a fairer labour market. I ask us all: can we not do better? Surely hard-working people deserve the right to more predictable contracts; we should keep that at the front of our minds.

It is disappointing that a threshold of the national minimum wage or national living wage has not been adopted, which would have extended support to many more workers than the lower earnings limit. The fact that the Government still actively chose to use the lowest reasonable income-based threshold tells us that there is still far more to do in this area, and that is compounded when we look at the implications for those claiming universal credit.

What assurances can the Minister give those earning above the current lower earnings level of £123 per week but below the universal credit threshold of £332 per week about the exclusivity clauses that remain in their contracts? What steps will be taken to protect those who may earn below the lower earnings limit but may not be covered by the regulations because they are classed as self-employed? I am talking not about those who are genuinely unemployed but those working in the gig economy, who are often placed on highly restrictive contracts that do not offer the genuine freedom that self-employment provides. As I say, this is crucial, given that the precarious nature of work at this moment in time is at the front of people’s minds. Much more must be done to create stable and secure employment across the piece. I am sure that all of us know too many heartbreaking stories of how people have suffered under this regime.