Non-exclusivity clause

Exclusivity terms are unenforceable if they’re in the contracts of employees or workers whose net average weekly wages don’t exceed the lower earnings limit.

Unenforceable exclusivity clauses

Any exclusivity term in a specified contract which prohibits an employee or worker from doing work or performing services under another contract or arrangement, or which prohibits them from doing so without the employer’s consent, is unenforceable against them. A specified contract is an employment contract or other worker’s contract which is not a zero-hours contract and which entitles the employee/worker to be paid net average weekly wages that do not exceed the lower earnings limit. However, a similar unenforceability provision also applies in relation to those employed or engaged on zero-hours contracts – see our Zero-Hours Contract Clause.

Net average weekly wages

Where the specified contract is a permanent one, average weekly wages are calculated by dividing by 52 the total annual remuneration to which the employee/worker is entitled. Where the specified contract isn’t permanent, average weekly wages are calculated by dividing total remuneration entitlement by the number of weeks during which the contract is expected to continue. Net average weekly wages are then calculated by subtracting all deductions from average weekly wages.

Dismissal and detriment protection

If the reason, or principal reason, for an employee’s dismissal is that they breached an exclusivity term in their specified contract, it will be an automatically unfair dismissal. Employees and workers also have the right not to be subjected to any detriment (such as not being offered further work in the future) for a reason relating to a breach of an exclusivity term in their specified contract. No qualifying period of employment is needed for such employment tribunal claims.

Clause wording

As there are no exclusions to this ban on exclusivity terms in specified contracts, you can, if you wish, insert our Non-Exclusivity Clause into the contracts of relevant low-income employees/workers. Our clause says that, outside their working hours, the employee/worker is free to engage in other work or activity for other employers or to perform services under another contract or under any other arrangement. Whether you insert a clause or not, employees/workers on specified contracts have the freedom to find secondary employment with other employers and you can’t restrict them from doing such other work in their free time. If you do use our clause and the contract subsequently ceases to be a specified one, i.e. because the employee’s/worker’s net average weekly wages increase above the lower earnings limit, our clause would normally still be binding on you unless the individual agrees otherwise. We’ve dealt with this by optionally providing that the clause will cease to have effect in that event. Do bear in mind though that, when it comes to workers, requiring exclusivity can also be an indicator of employee status.