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Unfair employment clause crackdown will ‘boost pay for millions’

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The government is proposing a crackdown on restrictive and unfair employment contracts which should help boost the pay of millions of workers.

Workers will be given greater freedom to find new or additional employment as the government is set to consult on banning the use of exclusivity contracts.

These exclusivity clauses prevent workers from taking on additional work with other employers. They were already banned for workers on zero hours contracts in 2015.

Business secretary, Alok Sharma, said the measures would apply to a worker whose guaranteed weekly income is below the lower earnings limit – £120 a week.

As such, it would mean 1.8 million low paid workers across the UK could pick up extra work, boosting their incomes during these difficult pandemic times.

Today’s plans also look to reform the use of non-compete clauses, which can prevent people from starting up or joining rival businesses after they leave a position.

Employers wishing to use non-compete clauses would need to pay compensation to workers so they receive a fair settlement if they’re restricted from joining or starting a business.

Sharma said: “We want to ensure every worker has the freedom and flexibility to work in the way they want, where they want – whether that’s topping up their pay packet by taking on additional work, or being able to start their own business with the skills they’ve gained throughout their career.

“Today’s reforms are another step on our path to making sure the UK is the best place in the world to work, start and grow a business as we build back better from the pandemic.”

The government is also seeking views on whether it is necessary to go further and ban non-compete clauses all together.

Andy Chamberlain, director of policy at IPSE (The Association of Independent Professionals and the Self-Employed), said: “It is a welcome step in the right direction that the government is consulting on ways to crack down on restrictive contracts.

“Paring back restrictive contract features such as exclusivity and non-compete clauses should, we hope, help open up opportunities for the self-employed and support them in adapting to these challenging times.”

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