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Government bans exclusivity clauses and increases penalty for breach of NMW regulations

Government bans exclusivity clauses and increases penalty for breach of NMW regulations

BY Margaret Anne Soderqvist-Clark
Employment Law & HR
BG Purple

A number of new rules which were set out in the Small Business, Enterprise and Employment Act 2015 have come into force. Although the act was passed in March (prior to the General Election) most of the employment provisions were scheduled to come into force on 26th May. 

The most publicised change is that the new law bans the use of exclusivity clauses in zero hours contracts. The Secretary of State has also been given new powers to introduce further regulations in relation to zero hours contracts. Given that further regulation of zero hours contracts was part of the Conservatives’ election manifesto, this provision may well be utilised in the future to bring further changes in this area. 

Other changes brought into force include an increase to the maximum penalty for breach of the NMW regulations, which will now be capped at £20,000 in respect of each underpaid worker. The law also included a provision for the Secretary of State to make regulations protecting NHS whistleblowers from HR in recruitment after having made a protected disclosure. 

Any clients who are concerned about the use of zero hours contracts or NMW issues should contact their legal manager to chat through these issues.

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