The government has issued two consultation documents dealing with terms in employment contracts as a result of the impact that the coronavirus (COVID-19) pandemic has had on employment levels.

The first seeks views on a proposal to extend the ban on exclusivity clauses in employment contracts to workers whose guaranteed income is less than the Lower Earnings Limit (currently £120 per week).

Having banned exclusivity clauses in zero hours contracts in 2015, the government now intends to extend that ban to low-income workers who are not able to secure the number of hours they would like from their current employer, thereby allowing them to seek additional work elsewhere.

The government’s rationale for the proposal is that because of the pandemic companies cannot always offer enough hours to every worker and if workers on reduced hours could take on additional work, on short hours contracts, businesses would have the flexibility and confidence to retain and hire workers. The flip side to the government’s rationale, however, is to give free rein to employers to use the “flexibility” to reduce hours when and how it suits them leaving employees with even less security or predictability.

It is said that the responses to the consultation will help inform decisions on detailed policy questions such as the appropriate level at which to set the earnings threshold and the appropriate level of hourly wage cap for which an exemption to the ban may be warranted.

The second consultation seeks views on how to make non-compete clauses in contracts of employment enforceable only when the employer provides compensation during the term of the clause, and whether this could be complemented by additional transparency measures and statutory limits on the length of these clauses.

It is also seeking views on an alternative option to make post-termination, non-compete clauses in contracts of employment unenforceable. This would in effect represent a ban on their use. Non-compete clauses are used in contracts of employment to restrict an individual’s ability to work for a competing business, or to establish a competing business for a defined period after they leave.

You can respond to the consultation on exclusivity clauses (which closes on 26 February 2020) here.

You can respond to the consultation on non-compete clauses (which ends on 26 February 2020) here.